Police are investigating Peterborough City Council after it emerged that a council-owned college building valued at £4.6 million was sold for just £1, amid concerns that the transaction and subsequent payments were unlawful. Cambridgeshire Police confirmed that three people have been arrested on suspicion of misconduct in a public office.
The case centres on the John Mansfield Centre (JMC), a building occupied by City College Peterborough, which was transferred to the City College Peterborough Foundation (CCPF), a registered charity, in 2020. A newly published council cabinet report states that officers are “concerned” the disposal breached legal requirements and that associated financial arrangements were improper.
Council Paid Rent Without Written Lease
Following the sale, Peterborough City Council continued to occupy the building and paid nearly £800,000 in rent to the charity. However, the cabinet report says there is “no evidence of any written lease or agreement for lease” governing the council’s occupation of the site.
After the transfer in February 2020, the council began paying monthly rent of £17,010, which rose to £29,010 by February 2021. The report warns that the absence of a formal lease creates serious uncertainty over the terms of occupation and potential liabilities that may have accrued.
Additional payments of almost £300,000 linked to maintenance and related costs were also made. The council now considers those payments to have been unlawful.
Approval Process Described as Fundamentally Flawed
The decision to transfer the JMC was approved in September 2019 through a delegated authority process. However, the report concludes that the delegated authority form used was “fundamentally flawed” and that the decision was taken by an officer who was not explicitly authorised to do so.
Local authorities are permitted to dispose of land for less than market value without central government consent only if the value does not exceed £2 million. The JMC had a book value of £4.6 million, and the report says there is no evidence that consent was sought from the secretary of state.
The document also states that the form incorrectly claimed the foundation had been established specifically to manage the JMC, despite the charity having been set up in 2013 for broader purposes.
Council Unable to Reclaim College Building
The council, which still owns City College Peterborough as an institution, says it cannot foresee being able to buy back the building. It must now negotiate with the foundation, as there is legal uncertainty over the college’s ongoing occupation of the site.
The report recommends that the council’s monitoring officer continues to explore all possible legal avenues to seek redress in relation to what is described as the unlawful disposal of the property.
Council Cites Governance Reforms Since 2022
Mohammed Jamil, Peterborough City Council’s Labour cabinet member for finance, said the publication of the report demonstrated a commitment to transparency and accountability.
He said the council has undertaken significant reforms since 2022 to strengthen governance and financial oversight, adding that further recommendations will be put before cabinet to reinforce decision-making processes.
Jamil said the council’s statutory officers had acted in line with their duty to report wrongdoing where it is identified and that the authority fully supports that approach.
College Seeks to Protect Learners and Staff
City College Peterborough principal Tasha Dalton said the report relates to a historical matter and stressed that the priority is to minimise disruption for learners, supported individuals and staff.
The City College Peterborough Foundation has been contacted for comment.
Growing Scrutiny of Council Asset Sales
The case comes amid increased scrutiny of local authority asset disposals across the UK, following a series of high-profile governance failures and financial mismanagement cases. Councils are under growing pressure from regulators and government to demonstrate transparency, ensure value for money, and comply strictly with legal requirements when handling public assets.
