Purpose

That the Deputy Mayor
for Housing confirm whether the recommendations of the LGSCO will
be complied with in full, and if not, to provide reasons for
declining to comply with any recommendations.

Decision

Please
Note:  This decision
was Called-In under Rule 12 of Part 4D of the Council’s
Constitution.  The Call-In was
considered by the Overview Select Committee at its meeting on 2
February 2026 where it was withdrawn by resolution of the Committee
in accordance with Rule 12 (g) of Part 4D of the Council’s
Constitution.  The original decision
taken on 9 January 2026 is, therefore, deemed to be revived in its
entirety.
 
To decline to comply
with one of the four recommendations of the LGSCO - regarding
payment of compensation to Mr X

Reasons for the decision

The recommendation set
out at and 4.4 of the Decision Report are not to be complied with
for the following reasons:
 

•          
The issue that is the subject of the recommendation at 4.4 are not
of the Council’s making. The Regulations regarding
“unsuitability” were made by Parliament in 2003, over
20 years ago. The geopolitical context has changed unrecognisably
since then. Between 2015 and 2025 the numbers presenting to the
city council as homeless increased from 2163 to 6,891 and our
provision, on which we spent over £5million per year, was
overwhelmed, as was the case in comparable cities throughout the
UK. Therefore these pressures a product of forces beyond one
Council’s control, together with policy made by multiple
Government agencies including the Home Office. To seek to penalise
a Council for a national and international crisis is grossly unfair
to the Council and the taxpayers of Leicester.
 

•          
It is impossible to see that the LGSCO have not set a clear
precedent here that they will be bound to follow in other
complaints. This is the second consecutive case in which a
four-figure sum of compensation has been recommended by the
Ombudsman. We calculate this exposure to be £250k for
Leicester City Council, and many millions of pounds nationally.
This could bring Councils closer to the prospect of an unbalanced
General Fund leading to significant and detrimental loss of local
services for local people.
 

•          
The principle of awarding a remedy is predicated upon the public
body who is at fault being able to put-right that error. This is
not the case here. There will be no salutary effect from this
compensatory exposure, because we (like just about every other
Council in the country) have no power to immediately create extra
housing that would avert the need to keep families in B&B for
more than six weeks. The LGSCO recognises that the Council had
nowhere else to place Mr X’s family during this period.
 

•          
We are spending many millions of pounds to respond in a structured
way to the pressures. In the last 12 months the Council has spent
£45m in the acquisition of 253 self-contained family and
single temporary accommodation units. It has also spent over
£400m in conjunction with partners to deliver over 1,800 new
permanent affordable homes in the city, with a further 800 in train
to be delivered by 2027. Exposing us to paying hundreds of
thousands of pounds of compensation will only serve to
significantly set-back our plans to strategically address it. By
investing in new temporary and permanent housing stock we have
reduced the number of families staying in B&Bs from 421 in 2024
to 55 today