What did a Government Internal Audit Agency draft report reveal about Wirral Council procurement processes and how a contractor spent public money?

What did a Government Internal Audit Agency draft report reveal about Wirral Council procurement processes and how a contractor spent public money?

What did a Government Internal Audit Agency draft report reveal about Wirral Council procurement processes and how a contractor spent public money?

                                         

Chris Whittingham (Grant Thornton) 29th January 2018 Audit and Risk Management Committee (Wirral Council)
Chris Whittingham (Grant Thornton) 29th January 2018 Audit and Risk Management Committee (Wirral Council)

“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.” – George Bernard Shaw

Below is a GIAA (Government Internal Audit Agency) draft report. It involves a civil servant recommending clawback of a large amount of grant from Wirral Metropolitan Borough Council. It also comments on other council’s procurement processes and how the money was spent with a particular supplier. This is just the text extracted from the documents below.
Continue reading “What did a Government Internal Audit Agency draft report reveal about Wirral Council procurement processes and how a contractor spent public money?”

Whistleblowers assembled in Committee Room 1 to hear apologies from Wirral Council over a toxic whistleblowing saga involving secrecy, national, local and regional government, internal and external audit, the private sector, ££££s, senior managers, contracts and Wirral Council

Whistleblowers assembled in Committee Room 1 to hear apologies from Wirral Council over a toxic whistleblowing saga involving secrecy, national, local and regional government, internal and external audit, the private sector, ££££s, senior managers, contracts and Wirral Council

Whistleblowers assembled in Committee Room 1 to hear apologies from Wirral Council over a toxic whistleblowing saga involving secrecy, national, local and regional government, internal and external audit, the private sector, ££££s, senior managers, contracts and Wirral Council

                                                 

Nigel Hobro (standing) addresses a special meeting of the Audit and Risk Management Committee of Wirral Council 8th October 2014 L to R Cllr Adam Sykes, Cllr David Elderton, Andrew Mossop, Surjit Tour, Nigel Hobro (c) John Brace
Nigel Hobro (standing) addresses the Audit and Risk Management Committee of Wirral Council 8th October 2014 L to R Cllr Adam Sykes, Cllr David Elderton, Andrew Mossop, Surjit Tour, Nigel Hobro (c) John Brace | still taken from video

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Above is a playlist of all parts of the Audit and Risk Management Committee (Wirral Council) meeting of 8th October 2014 held in Committee Room 1, Wallasey Town Hall starting at 6.00pm (apologies for recording problems)

Audit and Risk Management Committee
Cllr Jim Crabtree (Chair, Labour)
Cllr Ron Abbey (Vice-Chair, Labour)
Cllr Paul Doughty (Labour)
Cllr Matthew Patrick (Labour)
Cllr John Hale (Conservative spokesperson)
Cllr Adam Sykes (Conservative)
Cllr David Elderton (Conservative)
Cllr Stuart Kelly (Lib Dem spokesperson)

The Audit and Risk Management Committee of Wirral Council met for a special meeting about BIG/ISUS on the evening of 8th October 2014 whilst a thunderstorm raged outside Wallasey Town Hall. This was a continuing from its adjourned special meeting about the same topic on 22nd July 2014. For details of what happened at its meeting of the 22nd July 2014 see my earlier blog post Incredible first 5 minutes of Wirral Council councillors’ public meeting to discuss BIG & ISUS investigations.

The meeting started with a minute of silence for Mark Delap. Mark Delap was one of the Wirral Council employees that used to take minutes at its public meetings and had died recently.

After the minute of silence was over, the Chair asked for declarations of interest.

Cllr Matthew Patrick declared an interest due to a friendship with Nigel Hobro’s son (Nigel Hobro is one of the whistleblowers and spoke during the meeting itself).

Surjit Tour gave some brief advice to Cllr Matthew Patrick as to whether his interest was personal or prejudicial.

The Chair thanked Surjit Tour for the advice he had given to Cllr Matthew Patrick.

The Chair, Cllr Jim Crabtree then explained that there had been a lot of allegations since the issue had first been raised in 2011. There was a large volume of paperwork for the meeting, however details were redacted to protect businesses and companies. Also the names of officers and other people were blacked out. He also referred to commercial sensitivities and how they had gone to proper steps to protect identities.

He reminded people of the risk of legal challenge and Wirral Council’s liabilities. Cllr Crabtree asked everyone not to name names and continued by saying that any issues Wirral Council officers had addressed, they had done on behalf of the Council.

Cllr Stuart Kelly asked a question on the information that was redacted. He referred to a challenge to paragraph j, that was redacted in the papers to the July meeting, but was now provided. He wanted assurance from the legal officer Surjit Tour that the redactions were only in the categories as just outlined by the Chair.

Mr. Tour explained that the redactions had taken place to make sure that nobody by reasonable inquiry and information already in the public domain could piece together who or what the redacted information referred to and who the people redacted were. He added that in some cases it was unfortunately necessary to redact a lot of information mindful of what was already in the public domain, people could “fill in the gaps” which would expose Wirral Council to a liability.

The Chair invited Nigel Hobro to speak for at most fifteen minutes.

To be continued…

However below are some of my personal observations about this meeting I’ve started writing up above and a bit of a compare and contrast with two different special meetings of the Audit and Risk Management Committee held years apart (but both dealing with Wirral Council’s response to whistleblowers (one internal, one external).

It shows how history has a habit of endlessly repeating itself and is based on my opinion as one of the few people who was actually present at both meetings.

There are similarities between this public meeting and an earlier public meeting many years ago of the Audit and Risk Management Committee to decide on a response to the whistleblowing of former Wirral Council employee Martin Morton. Back then (years ago) there were arguments by politicians over a series of meetings over how much money should be paid back to those that were overcharged and to what year you go back to with the refunds.

Even when refunds were agreed by politicians, Wirral Council took so long that some of the people involved had died and in order cases (the ones that were still alive) the amounts were so large, that Wirral Council officers didn’t want to pay the people involved because they thought it would have a knock on effect on their benefits and officers doubted that some of the people had the capacity to be able to look after their own financial affairs.

Sadly the decision back then was fudged (which is partly what led to the problems later). Martin Morton’s concerns were also far, far wider than the overcharging issue, his concerns also involved allegations of the misuse of public money to fund organisations with links to serious and organised crime, serious allegations of serious crimes against vulnerable people who had apparently at the time not been investigated thoroughly enough, woefully poor corporate governance at Wirral Council, terribly weak political oversight due to put it frankly chaos back then and ultimately Mr Morton paid a personal price because people in Wirral Council tried to repeatedly punish him for daring to blow the whistle. Due to the large financial amounts involved, Cabinet had to sign off on the large expenditure that resulted.

One day before the AKA report was finally released to the public, the two middle managers involved in this matter were each paid a six figure sum each to leave Wirral Council.

At the earlier meeting (and at least one person on the Audit and Risk Management Committee is the same person as back then), the Chair back then accused one politician (Cllr Ron Abbey) of either not reading the papers for the meeting as they were asking questions that were already answered there or of completely misunderstanding what they had read (if they had read them). At this time the Chair was of a different political party to the Labour councillor (Cllr Ron Abbey) & in the interests of impartiality (with absolutely no offence meant towards one of my local councillors Cllr Jim Crabtree) many other local authorities have an unwritten rule that the Chair of the Audit and Risk Management Committee is not from the same political party as the ruling administration to ensure independence.

Knowing Cllr Crabtree as I do, I know that even if a councillor stepped out of line at a meeting he was chairing, even if the councillor was from the same political party as he was, Cllr Crabtree’s personality is such that he would frankly realise that it’s in the “public interest” to hold his fellow councillors to account even if he would have to be careful how he did this in public.

After it seems part of the reasons why Labour got a small majority on Wirral Council is because councillors from that party woke up the news that the Wirral public expected them to hold other politicians to account in public even if these were other councillors from the same political party.

Bill Norman (who left in somewhat mysterious circumstances in 2012) was the legal adviser to that earlier Audit and Risk Committee meeting years ago, not Surjit Tour as it is now. The issue of blacking out all the names (and other details) in the published papers was addressed by Bill Norman then with broadly similar reasons given to those given by Mr. Tour many years later. However I will point out that the culture of legal practice is such that confidentiality, especially when it comes to active proceedings is extremely important to maintain!

At the time this written material authored by Mr. Morton included in the papers for the meeting was also redacted, so this aspect of whistleblowing hasn’t changed much at all over the years at Wirral Council.

Wirral Council, back then and as it seems now has a fear of being sued. Although if they were open and transparent wouldn’t Wirral Council welcome judicial oversight of their decisions as it would give Wirral Council the chance for someone independent to look at it and the opportunity to defend themselves in court if they had done nothing wrong?

Perhaps it’s unfair to say a fear of being sued, it’s a fear at Wirral Council of being sued and losing and the results that flow from that which could be a combination of large financial penalties (or other things) as well as the fact that court reporters such as myself or the publications they publish in can’t actually be sued under British law for court reporting as long as we comply with the few rules that apply as court reporting attracts absolute privilege. All court hearings whether public or private are recorded by the court on tape anyway and in theory transcripts can be ordered.

Some may say for a large local Council (covering a population of ~320,000), whilst obviously they have their own organisational reputation to consider, that they seem unduly concerned at times at reputation management (although this is also a preoccupation of political parties) rather than dealing with matters in an entirely open and transparent way. There is a blurry line between the individual reputations of senior managers and politicians on one hand and the organisational reputation of the organisations they are either employed by or are elected to represent the views of the public at.

Some of the reports that went to the most meeting the day before yesterday, have been the subject of previous articles by me and FOI requests.

You can read my FOI request (25/8/13) for the report on ISUS here, which was refused on 23/9/13 and refused at internal review on 24/10/13. That external audit report can be read as part of the committee’s papers (see agenda item 2 and the links from this page on Wirral Council’s website if you wish to do.

Had the responses to those FOI requests been forthcoming and Wirral Council provided the information within weeks a lot more would have been in the public domain before the July and October meetings in 2014 of the Audit and Risk Management Committee meetings. Wirral Council instead chose to rely on exemptions to suppress the information and knew I was unlikely to appeal to ICO, as if I had I’d probably still be waiting for a decision!

Excessive secrecy just makes the public and press suspect that there’s a deliberate cover up or Wirral Council has done something it’s ashamed or embarrassed about. Usually the answer is a little more complicated than a conspiracy.

The Merseyside police investigation (which resulted in no charges) was used as an excuse by Wirral Council to deny FOI requests, not just about the one Grant Thornton recommended was referred to the police, but information in general about the other aspects too.

Wirral Council was recommended by the forensic arm of its external auditors to refer one very minor matter to the police. Wirral Council did and this was then used this as an excuse to delay and prevent further scrutiny. The police response (and I summarise) was that based on what they were told that there was insufficient evidence to charge somebody (or somebodies) with a crime. Remember criminal charges require basically two elements, proof that the alleged crime occurred and also generally for most criminal matters mens rea (proof of a “guilty mind” too). The latter is often harder to prove than the former, which is why defendants sometimes plead not guilty in order to get a jury trial! As Wirral Council actually carries out criminal prosecutions through the Wirral Magistrates Courts, I’m sure someone there who is actually aware of these matters!

This article is getting rather long and at the two thousand word mark I am somewhat digressing into related matters, although obviously it is not as long as the papers for that meeting which come in at the length of a medium-sized novel!

If you click on any of these buttons below, you’ll be doing me a favour by sharing this article with other people. Thanks:

EXCLUSIVE: 36 More Pages of North West Regional Development Agency’s Contract With Wirral Council for Business Grants Program

EXCLUSIVE: 36 More Pages of North West Regional Development Agency’s Contract With Wirral Council for Business Grants Program

Continuing from yesterdays’ blog post of the first ninety pages of the North West Development Agency’s contract with Wirral Council, here are the next thirty-five pages. As European Regional Development Fund (ERDF) money was involved, these are the standard conditions of the European Regional Development Fund grant.

Page 91 – Cover Page (Standard Conditions of the European Regional Development Fund (ERDF) Grant)
Page 92 – Contents Page (1)
Page 93 – Contents Page (2)
Page 94 – This states various facts about the European Funding
Page 95 – This starts the agreement with a list of definitions
Page 96 – This continues the definitions
Page 97 – This continues the definitions
Page 98 – This continues the definitions
Page 99 – This continues the definitions
Page 100 – This continues the definitions
Page 101 – This continues the definitions and starts a section on interpretation
Page 102 – This continues the section on interpretation and starts one on eligible expenditure
Page 103 – This continues the section on eligible expenditure, has one on the application and starts a section on grant claims
Page 104 – This continues the section on grant claims
Page 105 – This continues the section on grant claims
Page 106 – This has sections on the expenditure profile, has a section on decommitment of ERDF resources and starts a section on provisions related to the fixed assets and major assets
Page 107 – This continues the section on provisions related to fixed assets and major assets
Page 108 – This continues the section on provisions related to fixed assets and major assets and starts a section on material changes to the project and starts a section on legislation
Page 109 – This continues the section on legislation, has a section on publicity and starts a section on events of default and rights reserved for breach of the funding agreement
Page 110 – This continues the section on events of default and rights reserved for breach of the funding agreement
Page 111 – This continues the section on events of default and rights reserved for breach of the funding agreement and starts one on assignment or charging of the funding agreement
Page 112 – This continues the section on assignment or charging of the funding agreement and starts one on monitoring progress, tendering and notification
Page 113 – This continues the section on monitoring progress, tendering and notification
Page 114 – This continues the section on monitoring progress, tendering and notification and starts one on audit requirements
Page 115 – This continues the section on audit requirements
Page 116 – This continues the section on audit requirements
Page 117 – This continues the section on audit requirements
Page 118 – This continues the section on audit requirements and starts one on freedom of information
Page 119 – This continues the section on freedom of information and starts one on data protection
Page 120 – This continues the section on data protection
Page 121 – This continues the section on data protection and starts one on security requirements
Page 122 – This has a section on grant recipient warranties and starts a section on notices
Page 123 – This continues the section on notices and has sections on value added tax, good faith and cooperation, insurance, Contracts (Rights of Third Parties) Act 1998 and jurisdiction
Page 124 – This has a section entitled miscellaneous
Page 125 – This ends the miscellaneous section
Page 126 – This is the cover page for Annexure A

EXCLUSIVE: 90 Pages of North West Regional Development Agency’s Contract With Wirral Council for Business Grants Program

EXCLUSIVE: 90 Pages of North West Regional Development Agency’s Contract With Wirral Council for Business Grants Program

The astute among you will no doubt be aware that the North West Regional Development Agency was abolished last year, however I would guess that in its absence that its functions under the contract are now done by the Department of Business, Innovation and Skills.

There is more to the contract than the first ninety pages, although the other pages can wait for another day. The contract between the North West Regional Development Agency and Wirral Council was for business grants and has been the subject of recent whistle blowing concerns.

Page 1 (this is just a cover page with the North West Regional Development Agency’s contact details on)

Page 2 (this is the first page dated 17th September 2009 stating it’s a grant funding arrangement between Wirral Council and the North West Regional Development Agency for business start-up)

Page 3 (this is an index page to the contract detailing various sections and page numbers)

Page 4 (this is the second index page to the contract detailing various sections and annexes)

Page 5 (this is the first page of the contract which details who it’s between, what it’s for and starts with a list of definitions of terms)

Page 6 (this continues the list of definitions of various terms in the contract)

Page 7 (this continues the list of definitions of various terms in the contract)

Page 8 (this continues the list of definitions of various terms in the contract)

Page 9 (this continues the list of definitions of various terms in the contract)

Page 10 (this continues the list of definitions of various terms in the contract)

Page 11 (this continues the list of definitions of various terms in the contract)

Page 12 (this continues the list of definitions of various terms in the contract)

Page 13 (this ends the list of definitions of various terms in the contract and details how certain references are to be interpreted)

Page 14 (this continues with how certain references are to be interpreted and starts to detail the roles of the North West Regional Development Agency and the accountable body)

Page 15 (this continues with detail as to the roles of the North West Regional Development Agency and the accountable body and goes on to representations and warranties)

Page 16 (this continues the representations and warranties)

Page 17 (this details conditions and what the accountable body’s obligations are)

Page 18 (this details when the contract will start, end and starts a section on consents)

Page 19 (this has sections on public procurement and the accountable body’s contractors and employees)

Page 20 (this has sections on onward liability, legislation, material alteration of the project and insurance)

Page 21 (this continues the section on insurance and has sections on reinstatement and notification by the accountable body)

Page 22 (this continues the section on notification and has sections on further assurance, good faith and co-operation and indemnity)

Page 23 (this continues the section on co-operation and indemnity and starts a section on monitoring of providers)

Page 24 (this has sections on provision of information by the accountable body and inspection and audit facilities)

Page 25 (this continues the section on inspection and audit facilities)

Page 26 (this has sections on maximum grant and conditions)

Page 27 (this continues the section on conditions and starts a section on repayment)

Page 28 (this continues the section on repayment and starts a section on review letter and variations)

Page 29 (this section is on events of default, remedies and termination)

Page 30 (this continues the section on events of default, remedies and termination)

Page 31 (this continues the section on events of default, remedies and termination)

Page 32 (this continues the section on events of default, remedies and termination and starts sections on novation, post completion and publicity)

Page 33 (this continues the section on publicity and has sections on North West Regional Development Agency logo & England Northwest’s brand and European Regional Development Fund funding)

Page 34 (this continues the section on European Regional Development Fund funding and has a section on intellectual property rights)

Page 35 (this continues the section on intellectual property rights and starts a section on reputation of the agency)

Page 36 (this continues the section on reputation of the agency and has sections on assignment and confidentiality)

Page 37 (this continues with the section on confidentiality and starts a section on Freedom of Information)

Page 38 (this continues the section on Freedom of Information and starts a section on Data Protection)

Page 39 (this continues the section on Data Protection and starts a section on default or termination of accountable body)

Page 40 (this has sections on status of accountable body, obligation to use CRM and notices)

Page 41 (this has sections on Value Added Tax, jurisdiction and miscellaneous)

Page 42 (this continues the miscellaneous section)

Page 43 (this continues the miscellaneous section and requires the accountable body to comply with obligations in the schedule)

Page 44 (this is the title page for Schedule 1 (Service Providers))

Page 45 (this is the start of the list of service providers)

Page 46 (this is the end of the list of service providers)

Page 47 (this is the title page for Schedule 2 (European Regional Development Fund Offer Letter))

Page 48 (this is page 1 of the European Regional Development Fund Offer Letter)

Page 49 (this is page 2 of the European Regional Development Fund Offer letter)

Page 50 (this is page 3 of the European Regional Development Fund Offer letter)

Page 51 (this is what the grant recipients had to sign)

Page 52 (this is the offer letter and acknowledgement (schedule 1 (project specific conditions) part A (General) and part B (Delivery Structure))

Page 53 (this continues the project specific conditions part B (Delivery Structure) and part C (Equality and Diversity))

Page 54 (this continues the section on part C (Equality and Diversity))

Page 55 (this continues the section on part C (Equality and Diversity) and has part D (Intellectual Property Rights))

Page 56 (this is Schedule 2 (Project Specific Eligible Expenditure) Part A (Eligible Revenue Expenditure) and Part B (Eligible Capital Expenditure))

Page 57 (this is the first of the tables referred to in part A on salaries)

Page 58 (this is the second of the tables referred to in part A on overheads)

Page 59 (this is the third of the tables referred to in part A on premises)

Page 60 (this is the fourth of the tables referred to in part A on fees)

Page 61 (this is the fifth of the tables referred to in part A on other revenue)

Page 62 (this is the cover page for Schedule 3 (the targets))

Page 63 (this is part 1 of the Monitoring and Evaluation plan for Business Start-ups Phase II)

Page 64 (this continues the Monitoring and Evaluation Plan detailing its role)

Page 65 (this continues the role of the Monitoring and Evaluation Plan)

Page 66 (this details a timetable for receipt of project monitoring, other reports and claims)

Page 67 (this details the timetable after 30th April 2013)

Page 68 (this continues the timetable after 30th April 2013)

Page 69 (this details what the quarterly progress monitoring reports are)

Page 70 (this details what details are to be in the quarterly monitoring reports)

Page 71 (this continues with the details about what’s to be included in the quarterly monitoring reports)

Page 72 (this continues with the details about what’s to be included in the quarterly monitoring reports and has a section on record keeping/verification)

Page 73 (this continues the section on section on record keeping/verification)

Page 74 (this continues the section on record keeping/verification)

Page 75 (this continues the section on record keeping/verification)

Page 76 (this continues the section on record keeping/verification)

Page 77 (this continues the section on record keeping/verification and has sections on risk & management and programme milestones)

Page 78 (this continues the section on programme milestones)

Page 79 (this page starts Part 2 (Evaluation Plan))

Page 80 (this continues the Evaluation Plan)

Page 81 (this details the sources of information)

Page 82 (this continues with the sources of information)

Page 83 (this continues with the sources of information)

Page 84 (this details which organisations the evaluation findings are disseminated to)

Page 85 (this is an annex containing an agenda for monitoring/audit meetings)

Page 86 (this is the cover page for the offer letter and acknowledgement (Schedule 4 (Expenditure Profile)))

Page 87 (this is annex 2.1 a project finances input sheet)

Page 88 (this is annex 2.2 detailing project finances by year in £thousands)

Page 89 (this is a table (continued at page 90) detailing expenditure by quarter)

Page 90 (this is the second part of the table started on page 89)