‘Cock up, or conspiracy?’ our first question to officers at Peterborough City Council at a media briefing ahead of publication of a damning report that unveils unlawful asset disposal, mismanagement and a criminal probe linked to the £4.6m sale of John Mansfield Centre.
“That’s not for us to determine – the purpose of the report is to report unlawful behaviour of the council,” came the response. “That’s the duty of statutory officers.
“It is not for us to determine the motivations or whatever else of the people that were involved at the time.”
The report reflects how the city council has been plunged into its most serious governance scandal in decades after the report, by acting monitoring officer Graham Kitchen and section 151 officer Christine Marshall, uncovered failures that have cost the city millions and raised urgent questions over leadership, oversight, and legal compliance across the authority.
A £4.6 million asset sold for £1 — ‘the decision was… unlawful’
At the centre of the crisis is the transfer of the John Mansfield Centre to the City College Peterborough Foundation in 2020 for just £1, despite being valued at £4.6 million.
The statutory officers’ findings are unequivocal: “The decision… was made outside of delegated powers and in breach of the duty to obtain best consideration… It was, therefore, unlawful.”
The officer who approved the deal relied on powers that applied only to leases—not freehold disposals.
The undervalue exceeded the £2 million threshold that legally required consent from the Secretary of State, yet: “There is no evidence… that specific consent was sought.”
The report also confirms there was no competitive process, no proper valuation, and incorrect claims that the foundation had been created specifically for the JMC transfer.
Councillor Mohammed Jamil, Cabinet Member for Finance and Corporate Governance, said: “Our monitoring officer and section 151 officer consider that the council acted unlawfully in relation to the sale of the John Mansfield Centre in 2020 and associated financial transactions.
“Therefore, it is right and proper that this is brought to light, and steps are taken to ensure as far as possible that similar unlawful actions do not happen again.
“As part of our improvement journey since 2022, we committed to rapid and far-reaching improvements in relation to governance and financial management.
“Many of the steps we have taken in recent years have led to more robust processes and policies in relation to decision making, however the recommendations which will go before Cabinet next week seek to bolster this further.
“The publication of this report is proof that where unlawful acts are identified as having taken place, the council’s statutory officers will not shy away from their duty to report that wrongdoing, and we fully support that approach.”
£790,000 in unlawful rent payments: ‘no evidence of any written lease’
The crisis deepened after the disposal, when the council—via City College Peterborough—paid rent to the foundation for use of the same building despite the college still being a council department.
The Peterborough college affair: allegations, resignations, and a wall of silence
Rent payments began at £17,010 per month, later rising to £29,010, totalling around £790,000. None of these payments had formal approval or legal basis.
The report states: “There is no evidence of any written lease or agreement… In the absence of any proper authority… the rent payments were unlawful.”
Additional unauthorised spending included £150,000 linked to the sale contract and £142,000 in maintenance and capital works.
Internal audit teams are still reviewing the full extent of unlawful payments made.
CambsNews probed officers on the total financial loss to the council and the taxpayers as a result of the unlawful disposal and associate payments?
The spokesperson explained there were two aspects “we consider to be unlawful”.
The first was the sale itself, the disposal of an asset valued at £4.6m for £1.
But there were other payments including £150,000 to the city college foundation in respect of maintenance, rental payments totalling £790,000 (“we’re still looking in further detail”) and a further £142,000 in relation to maintenance following the disposal.
“That brings the total figure to £1,082,000, approximately, in terms of the associated financial transactions that have gone on in addition to the £4.6 million.”
City council officers set out details of how an internal investigation was later handed over to external investigators “and then formalised it in a report; that report was then handed on to the police, and now the matter forms part of an ongoing police investigation. So, we’ve cooperated with the police in that respect.
“And one of the recommendations within the report is that we continue to support the police investigation”.
Flawed governance
CambsNews asked how such significant governance went undetected for several years.
The spokesperson explained that the report sets out the flaws in governance, one of which was that “the wrong route of governance that was used. It was a delegated authority form. It didn’t go to Cabinet, which is where it should have gone for this type of disposal.
“The decision wasn’t taken in public and therefore that explains potentially why it wasn’t scrutinised in the manner that you might have expected it to be”.
The college, although granted some autonomy in 2014, remained part of the council and bound by its constitution.
Despite this, the statutory report identifies a litany of governance failures:
- Acting outside delegated powers
- Misrepresenting the purpose of the foundation
- Failing to consider state aid rules
- Lack of documentation and transparency
- No lawful authority for payments or asset disposal
The officers conclude the disposal and payments “appear to contravene an enactment” and multiple rules of law.
Asset recovery and damages under consideration
Legal advice is now being sought on whether the council can reclaim the asset or pursue damages. The case has been referred to police and is currently the subject of an active criminal investigation.
The council has pledged full cooperation.
Criminal investigation: three arrests made
In May 2025 Cambridgeshire Police arrested three individuals—a woman in her 60s, a man in his 70s, and a man in his 80s—on suspicion of misconduct in public office. All were initially released on bail but last month that status lessened to being released under investigation.
Councillors and officers have been ordered not to discuss or speculate publicly to avoid prejudicing the investigation.
Mandatory section 5A & 114A report issued
Under national legislation, the statutory officers were legally obligated to issue the report due to the severity of the breaches.
Cabinet will discuss the report next week.
Reform demanded: recommendations laid out
The report sets out sweeping reforms to prevent future failures, including:
- Full review of officer delegations on property
- Constitutional changes to ensure Cabinet approval for all asset transfers
- Mandatory training on best consideration rules
- Adoption of a statutory officer protocol
- Continued cooperation with police
- Updated governance, legal, and procedural frameworks
Council leaders say they will implement the recommendations and work with auditors and police to restore trust.
Principal and two colleagues told to ‘stay home’ as inquiry launched
The city council is confident that the public’s trust can be maintained by the transparency of the report’s findings and the recommendations going forward.
“I think the fact that this report is being published and we are proactively briefing you, and we are making people aware of it, shows that there is transparency around this,” said the spokesperson.
The council was hopeful that “people hear loudly that we will not brush these things under the carpet that may have happened historically.
“We want to be honest about them. I think the existence of this report is saying that we’re prepared to deal with these things and be open.”
Council’s unpaid rent creates major financial crisis
Meanwhile the annual accounts of The City College Peterborough Foundation show them feeling the pinch after Peterborough City Council failed to pay rent for the John Mansfield Centre throughout the 2023-24 financial year.
The accounts show the unpaid sum—£560,560—has forced the foundation to make a massive bad debt provision.
Timeline of the Dispute
- 2014: City College Peterborough Foundation is established as a charity.
- 2020: The Foundation receives the John Mansfield Centre property from Peterborough City Council, which becomes its main asset.
- April 2023: Start of the financial year. Peterborough City Council continues to occupy the John Mansfield Centre under leasehold but fails to pay rent.
- Throughout 2023-24: The council does not make any rental payments for the John Mansfield Centre, despite ongoing use for educational purposes.
- March 2024: End of the financial year. The foundation’s directors recognize the unpaid rent as a bad debt.
- December 2024: The foundation’s annual report and financial statements are published, revealing the full extent of the financial impact.
- Audit Report (December 2024): Auditors issue a disclaimer of opinion, stating: “We have been unable to satisfy ourselves that the charity can continue to operate and deliver its’ charitable objects given significant legal challenge which it is facing… We are unable to determine whether the charity can continue as a going concern.”
