Police launch investigation after college building worth £4.6m sold for just £1

Now, a damning cabinet report has laid bare a series of governance failures that have cost the city millions and sparked urgent questions about oversight and legal compliance across the authority.

Cambridgeshire Police say they have arrested three people on suspicion of misconduct in public office in connection with the deal.

The decision to hand over the building was made outside of delegated powers and breached the council's duty to secure the best possible price.

An officer who approved the deal relied on powers that only applied to leases, not freehold disposals. According to the report, the "decision was taken by an officer not explicitly authorised".

Councils can sell land below market value without needing the Secretary of State's approval, but only if the undervaluation is £2million or less.

With the John Mansfield Centre valued at £4.6million, consent from central government was legally required. Yet there's no evidence anyone ever sought that permission.

The statutory officers’ findings laid bare: “The decision… was made outside of delegated powers and in breach of the duty to obtain best consideration… It was, therefore, unlawful.”

The delegated authority form used to approve the transfer was described as fundamentally flawed, with incorrect claims that the foundation had been established specifically for managing the building.

And the financial mess didn't stop with the sale itself. After the transfer went through in February 2020, Peterborough City Council started paying rent to the foundation for use of the very same building, despite City College Peterborough still being a council department.

Monthly payments began at £17,010 and climbed to £29,010 by February 2021, eventually totalling around £790,000.

However, there is no evidence of any written lease or rental agreement to justify these payments. Without proper authority, the rent payments were unlawful.

On top of that, the council made additional unauthorised payments of roughly £150,000 linked to the sale contract and another £142,000 for maintenance work.

All told, the unlawful payments reached approximately £1,082,000, and internal auditors are still reviewing the full extent of the damage.

In May 2025, Cambridgeshire Police detained three individuals in connection with the scandal: a woman in her 60s, a man in his 70s, and a man in his 80s.

All three were initially released on bail but have since been released under investigation.

Mohammed Jamil, the council's Labour cabinet member for finance, said: "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."

The council is now seeking legal advice on whether it can reclaim the building or pursue damages, though officials have acknowledged they cannot foresee being able to buy back the property.

Tasha Dalton, principal at City College Peterborough, said: "We are aware of the publication of the report, which relates to a historical matter. Our priority is to ensure the college learners, supported people and staff are as least affected as possible."

Meanwhile, the foundation itself is struggling financially after the council stopped paying rent throughout 2023-24, leaving an unpaid sum of £560,560.

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