A West Midlands council has referred allegations of ‘potential collusion and fraudulent practice’ by two councillors to the police.

A report from Sandwell Council’s audit committee has alleged that Cllrs Bawa and Hussain were involved in a ‘conspiracy to defraud and/or misconduct in a public office’.

The two councillors, who had been displaced from their homes by a Compulsory Purchase Order (CPO), allegedly benefitted from a unique CPO pilot scheme in 1999.

The scheme was introduced after the majority of residents affected by the CPO had been relocated, and they were restricted to plots of land that Cllrs Bawa and Hussain had already expressed interest in the previous year.

According to the council’s report, only Cllrs Bawa and Hussain, and members of their immediate families, submitted bids for these plots. The bids also ‘gave the impression of potential cover pricing and bid suppression.’

One of the plots received four bids - all from Cllr Hussain and members of his family. And two of the plots were sold at below the guide price in March and April 2000.

Cllr Bawa also failed to declare his role as a councillor when a planning application was submitted on his behalf in October 2007.

Sandwell’s report also raised concerns over the allocation of 10 council-owned properties. It alleged members of Cllr Hussain’s family were allocated the houses in a manner that suggested a ‘conspiracy to defraud’.

Mr Hussain told the BBC the accusations were ‘purely politically-motivated’.

The audit committee report also raised concerns over the removal of the sale of a plot of land from an already arranged and publicised auction by Cllr Jones in 2011 in order to sell it to a family member of Cllr Rouf.

While the sale did not go ahead, it appeared to be a breach of both the council’s Financial Regulations and the Members Code of Conduct and has been referred to the council’s monitoring officer.

‘The council treats all allegations of wrongdoing or impropriety with the utmost seriousness,’ said Jan Britton, chief executive of Sandwell Council.

‘For that reason, we have carried out extensive investigations into a number of issues relating to land sales, housing allocations and other matters that have been brought to our attention.

‘We are pleased to be bringing a report detailing the outcome of reviews into these allegations to the upcoming meeting of the council's audit committee.’

‘Several of the allegations date back many years and have come to light following more recent investigations,’ Mr Britton continued.

‘The report concludes that some of the issues require further action while others make recommendations to improve the council's procedures.

‘We have worked extensively to get to the bottom of any alleged wrongdoing as promptly as possible and it's important to the leader and me, to the cabinet and to the council as a whole that we take action where necessary and move on from this.’