The council in question now claim it does not have the money (the money they defrauded the taxi drivers out off) to pay them back. Read the full story from the source Echo
Whilst this is a silly excuse that no judge would accept the Local Government Ombudsman cannot force the council to do anything they don't want to do. Essentially the taxi drivers can only hope that the council, who defrauded them out of the money in the first place, will do the right thing and give them their money back.
Now you know why Councils can afford to laugh at the LGO
To fully understand the corrupt system of administrative justice operating in this country read the Local Government Ombudsman and their twelve pillars of injustice.