What’s in the 370 page whistleblowing report on Wirral Council’s grants to businesses?

What’s in the 370 page whistleblowing report on Wirral Council’s grants to businesses?

What’s in the 370 page whistleblowing report on Wirral Council’s grants to businesses?

 

ICO Information Commissioner's Office logo
ICO Information Commissioner’s Office logo

The BIG/ISUS whistleblowing issues have been already covered in extensive detail by this blog over the past few years. However the latest twist in this story was yesterday’s release of a 370 page 2012 internal audit report into the matter following ICO decision notice FS50559883.

Wirral Council have finally released an internal audit report dated 13th January 2012 that went to Bill Norman (then Monitoring Officer/Director of Law, HR and Asset Management at Wirral Council). Those with long memories will remember that Bill Norman was suspended later that year over the Colas matter, then in September 2012 councillors agreed he should receive £146k plus £5k legal expenses to leave.

Back to the BIG/ISUS matters and let’s just quickly recap the blog posts I’ve written on the many aspects of this matter as they provide some background. I’m sure there are one or two I may have left out (I remember I republished some of my earlier blog posts which contained the agreements for BIG/ISUS in the lead up to the special meeting of the Audit and Risk Management Committee last October).

So that’s a brief summary of developments so far? So what does the new information reveal? It’s a report by an auditor at Wirral Council which details the allegations the two whistleblowers made, the investigations into those allegations and the auditor’s opinion as to whether the whistleblowers were correct or not.

The executive summary runs from pages 9-16 and details the allegations made by the two whistleblowers and whether what was inspected during the investigation substantiated or refuted these claims. Pages 17-20 go through each of the allegations in detail as well as whether each allegation is correct or not and the implications that follow. Pages 21-45 are the main report which at the end contain 14 recommendations. Had some of these recommendations been implemented in 2012, some of the unanswered questions surrounding this matter would have been dealt with much earlier, such as the transfer of assets from Lockwood to Harbac.

At the special meeting of the Audit and Risk Management Committee in October 2014, councillors, officers and those speaking at the public meeting were warned not to refer to names of companies, yet the release of this 2012 audit report only removes the names of Wirral Council employees (and former employees). These matters are now out in the open (which should’ve happened before the Audit and Risk Management Committee met last year). Had this 2012 internal audit report been made available to councillors before that meeting the discussion may have been very different.

However it only came to light because of a FOI (Freedom of Information) request made by one of the whistleblowers and even then only after the Information Commissioner’s Office intervened with a decision notice. Certainly the whistleblowers must both feel vindicated by the conclusions reached in this detailed 2012 internal audit report.

The Liberal Democrat Group of councillors on Wirral Council plus the Green Party Councillor Pat Cleary have tabled the following Notice of Motion for the next Council meeting on the 12th October 2015 on the subject of FOI requests. It reads as follows:

OPEN GOVERNMENT ?

This Council recognises that the Information Commissioner’s Office, as the independent authority set up to uphold information rights in the public interest and to promote openness by public bodies, upheld 13 complaints against Wirral Council in the past year.

Of the 18 notices issued between 29 September 2014 and 24 August 2015, the majority (72%) of complaints were upheld.

Council believes that this is a matter for concern, requiring an explanation to its Members.

Council requests that lessons should be learned and applied from these decisions and questions whether Officers have been excessively cautious or defensive in their interpretation of the legislation.

Council, therefore, requests that the legislation is approached with greater regard to the ‘public interest test’ so that the risk of further reputational damage to Wirral can be reduced.

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Did Wirral Council’s Pensions Committee really approve the accounts of the £6.9 billion Merseyside Pension Fund?

Did Wirral Council’s Pensions Committee really approve the accounts of the £6.9 billion Merseyside Pension Fund?

Did Wirral Council’s Pensions Committee really approve the accounts of the £6.9 billion Merseyside Pension Fund?

Pensions Committee (Merseyside Pension Fund) 15th September 2015 Left Peter Wallach Head of Pensions Right Cllr Paul Doughty Chair of the Pensions Committee
Pensions Committee (Merseyside Pension Fund) 15th September 2015 Left Peter Wallach Head of Pensions Right Cllr Paul Doughty Chair of the Pensions Committee

Below is a copy of my statutory objection to the approval of the accounts of the Merseyside Pension Fund (a £6.9 billion pension fund that form part of Wirral Council’s accounts) which go to Wirral Council and its auditors Grant Thornton.

It’s rather dull and technical, but in the interests of openness and transparency I am publishing it below. It relates to yesterday’s meeting of the Pensions Committee that can be viewed below. I was so cheesed off I made two spelling mistakes in the email (a corrected version is below).

Plus ça change, plus c’est la même chose!

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Wirral Council’s Pension Committee public meeting of the 15th September 2015 Part 1 of 2 (Merseyside Pension Fund)

I reckon receiving this email will probably be about as welcome at Wirral Council as someone breaking wind in an open plan office. However such is life! The press are independent for a reason!


Subject: Statutory objection to Pensions Committee approval of Merseyside Pension Fund Accounts for 2014/15

CC: Pat Philips
CC: Colin Hughes
CC: Surjit Tour
CC: Peter Wallach
CC: Joe Blott
CC: Tom Sault

CC: Cllr Paul Doughty
CC: Cllr Ann McLachlan
CC: Cllr George Davies
CC: Cllr Treena Johnson (email address unknown)
CC: Cllr Adrian Jones
CC: Cllr Brian Kenny
CC: Cllr Geoffrey Watt
CC: Cllr Kathy Hodson
CC: Cllr Cherry Povall
CC: Cllr Pat Cleary
CC: Cllr Anita Leech

CC: Cllr Nick Crofts (Liverpool City Council)
CC: Cllr John Fulham (St Helens Council)
CC: Cllr William Weightman (Knowsley Council)
CC: Paulette Lappin (Sefton Council)

CC: Cllr Jim Crabtree
CC: Cllr Ron Abbey
CC: Cllr Chris Blakeley
CC: Cllr Angela Davies
CC: Cllr David Elderton
CC: Cllr Phil Gilchrist
CC: Cllr John Hale
CC: Cllr Matthew Patrick

CC: Fiona Blatcher
CC: Heather Green
CC: Chris Blakemore

Dear all,

I am a local government elector in the Wirral Metropolitan Borough Council area and make this statutory objection to the Pensions Committee approval of the the Merseyside Pension Fund Accounts for 2014/15 (see Audit Commission Act 1998, s.16).

For the purposes of clarity to the auditor this is a statutory objection to a matter not in relation to a matter covered by Audit Commission Act 1998, s.17-18 but Audit Commission Act 1998, s.8.

As required I am sending a copy of this objection to the auditor, those I have contact details for on Wirral Council’s Pensions Committee (I do not have an email address for Cllr Treena Johnson), Wirral Council’s Audit and Risk Management Committee and those tasked with corporate governance at Wirral Council such as the Monitoring Officer Mr. Tour, the Head of Pensions Peter Wallach, the Strategic Director for Transformation and Resources Joe Blott and Tom Sault the Acting 151 Officer as well as other relevant people.

I do not have contact details for some on the Pensions Committee. I am sending this to the officer who took the minutes of the Pensions Committee meeting on the 14th September 2015 in the hope that it can be forwarded to those I do not have contact details for (the non-councillor members and Cllr Treena Johnson).

As this is a rather technical objection, I provide below a summary of the key points.

However I first need to declare an interest. I have a close family relative who is currently paid a pension by Merseyside Pension Fund, therefore a close interest in the corporate governance of the Fund being done properly.

On the 14th September 2015, I and three other members of the public (two of whom were employed by Grant Thornton and are Wirral Council’s auditors) attended a public meeting of Wirral Council’s Pensions Committee.

This meeting was filmed by myself and published shortly after, see

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and

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.

One of the functions of the Pensions Committee as detailed in Wirral Council’s constitution is to approve the statement of accounts and financial statements of the Merseyside Pension Fund and recommend these to the Audit and Risk Management Committee.

This is because the Merseyside Pension Fund forms part of Wirral Council’s accounts. There is a statutory deadline to approve the statement of accounts for the 2014/15 financial year by the 30th September 2015.

As mentioned at the Pensions Committee itself by one of the councillors this Fund is valued at ~£6.9 billion.

Item 4 and 5 on the agenda of that meeting were the pension fund accounts 2014/15 and draft annual report.

As the Pensions Committee is a public meeting of a local authority, legislation that governs public meetings applies to it. The statement of accounts formed part of a document known as the “Report & Accounts 2014/15” which was given to those on the Pensions Committee present on the afternoon of the meeting itself.

Please note the reference below to principal council, by virtue of Local Government Act 1972, s.100E also apply to committees and sub-committees of a principal council. The Pensions Committee is a committee of a principal council.

Local Government Act 1972, s.100B(4), is quite clear on the procedure that should be followed in the case of agenda items that are not open to inspection by members of the public five clear days before the meeting.

(4) An item of business may not be considered at a meeting of a principal council unless either—

(a) a copy of the agenda including the item (or a copy of the item) is open to inspection by members of the public in pursuance of subsection (1) above for at least [five clear days] before the meeting or, where the meeting is convened at shorter notice, from the time the meeting is convened; or

(b) by reason of special circumstances, which shall be specified in the minutes, the chairman of the meeting is of the opinion that the item should be considered at the meeting as a matter of urgency.

It is clear that the Report & Accounts 2014/15 for the Merseyside Pension Fund did not fall under the description in s. 100B (4)(a) and therefore the procedure in 100B(4)(b) applies. The Chairman of the Pensions Committee Cllr Paul Doughty did not specify at the meeting itself his opinion that the item should be considered as a matter of urgency, nor would the reasons for this be specified in the minutes.

This is an important corporate governance safeguard written into legislation.

Firstly, if the documents are not made available to the public five clear days before the meeting, the public and press cannot scrutinise them. Secondly (as was mentioned at the meeting itself) at least one councillor expressed the view that half an hour was insufficient to scrutinise a highly technical 46 page document.

This is not a one off occurrence. Officers in previous years have frankly played these games of brinkmanship with accounts routinely handed to those tasked with corporate governance to approve on the evening of the meeting itself. The safeguard above in s.100(4)(b) above, details a procedure to be followed if the matter is urgent.

Therefore my objection is that because of what I have detailed above, the Pensions Committee did not approve the statement of accounts for the Merseyside Pension Fund because:

(a) the report was late and
(b) it is clear from the legislation that a procedural step was missed making the decision ultra vires.

I am however not an unreasonable person and suggest the following course of corrective action. If this is followed I will happily withdraw my objection.

i) That the Pensions Committee holds a further meeting between now and 30th September 2015.
ii) The Audit and Risk Management Committee recommendation is altered (agenda item 12 meeting of the 22nd September 2015) to be conditional on the meeting outlined in i) and the same for any Cabinet meeting that has to approve the same item
iii) That at this special meeting it considers the items referred to in this objection in a way that is not open to legal challenge or perceived to be ultra vires and that the information for this meeting is published on Wirral Council’s website five clear days before the meeting.

As Wirral Council’s auditors Grant Thornton will no doubt make clear, the matter that forms this objections needs to be resolved before the accounts are signed off. I look forward to reading and hearing responses to this objection.

However as this is a perceived serious corporate governance failing, I am making this objection public.

Yours sincerely,

John Brace

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Surjit Tour tells Wirral Council’s councillors that they have to accept filming at their public meetings

Surjit Tour tells Wirral Council’s councillors that they have to accept filming at their public meetings

Surjit Tour tells Wirral Council’s councillors that they have to accept filming at their public meetings

                         

Birkenhead Constituency Committee (10th April 2014) Birkenhead Town Hall
Left to Right Surjit Tour (Head of Legal and Member Services), Councillor George Davies, Rt Hon Frank Field MP (Chair), Dawn Tolcher (Birkenhead Constituency Manager)

In an update to the blog post headlined Does Pickles think that Wirral Council’s £22,500 newspaper plan “pours taxpayers’ money down the drain”?, something seems to have happened “behind the scenes” as Surjit Tour had this to say to councillors on the subject at last night’s Transformation and Resources Policy and Performance Committee on an item about the Local Audit and Accountability Act 2014 (the bit he says about Wirral Council’s compliance with the Code of Recommended Practice on Local Authority Publicity is the relevant part):

“Thank you Chair, just very briefly taking you through this particular report. It’s a report that’s already been considered by the Audit and Risk Management Committee on the 14th March and the report seeks to summarise the key provisions of the Local Audit and Accountability Act 2014.

On the 13th August of 2010 the government announced its intention if you recall to abolish the Audit Commission and replace it with a decentralised process and arrangements with regard to the audit of public bodies. This Act seeks to set out the necessary framework in relation to the audit arrangements and I’ll turn your attention if I may to page fifty-seven of the report and that provides an explanatory note in terms of the key features of the current and new arrangements that are being introduced.

Paragraph 2.1 sets out and highlights features of the new arrangements and notably the abolition of the Audit Commission and with a view to arrangements being put in place. Under the new arrangements public bodies will be required to appoint an external, independent auditor on the advice of an independent audit panel. The audit panel which the Council must have in place and each local authority is required to have that audit panel in place to discharge their responsibilities, the appointment of an auditor. Various other… may be deferred on that particular panel by the Secretary of State.

The make up of that particular panel it talks about in the report of the recommended changes in the explanatory forward. The actual amend to the legislative framework with regards to council tax referendums and the revised measures to ensure local authorities’ compliance with the Code of Recommended Practice on Local Authority Publicity.

The Act also then introduces greater transparency and openness to meetings of Council meetings in particular by allowing local residents to film, tweet, blog and access the information in relation to decision-making in those committees. So it goes further than just the filming and the arrangements that we currently have.

We also then have arrangements and changes with regards to any local audit, taking account value for money elements which needs to be also factored in and we have a transfer of responsibilities of setting a new code of audit practice going now to the National Audit Office as part of these arrangements. So you see that in a bit more detail in paragraph three some of those provisions there in more detail.

In terms of our current arrangements, there are outsourcing arrangements in place and as you know we have Grant Thornton who is the external auditor for Council and that arrangement continues until 2017 at which point arrangements will be put in place for the appointment of a new local auditor and this is where the new local auditor panel will be engaged in the procurement of that particular body.

There will be a series of approved, accredited firms that will be able to do that and they will be made subject to assessment and criteria by the Financial Reporting Council and relevant professional accountancy bodies who are regulated in the provision of local government services.

In terms of the panel itself, details of its make up are set out in paragraph six of the explanatory note and this is where we need to have a panel which would consist of a majority of independent members and it would be chaired by an independent member. Now our Audit and Risk Management Committee can act as the Council’s auditor panel under the act if so required and if we need to appoint individuals then there’ll be a process that’ll need to be gone through.

You’ll recall that the Audit and Risk Management Committee, in fact it happened last year, indicated that it wished to be a majority of members of the Audit and Risk Management Committee to be independent and there will, arrangements are in hand to make those necessary arrangements. However the Secretary of State is still yet to publish regulations in relation to this particular Act, particularly the criteria and it needs to be expanded on what appears in the Act itself. So the draft regulations are not complete in terms of what the criteria will be for the appointment of independent members and as such a decision has been taken to await the Act or indeed those final regulations to ensure that any appointment that is made is compliant with those regulations.”

The Chair said, “Thanks Surjit, any questions, comments? Pat?”

Cllr Patricia Glasman said, “Paragraph 2.1.5 access information relating to the decisions made in those meetings, I wonder if you could just expand a little bit on that specifically the Pensions Committee we have attachments which are not available to the public. It’s business meetings and I just wondered was there any change to really the way those are treated?”

Surjit Tour replied, “No, there’s no, those changes with regards to information at committees considering the exempt schedules, the schedules before them so those provisions remain unchanged. This is very much the ability to report in open session at committee meetings, individuals being able to not only film, but to tweet, blog information in real-time and as decisions are made.”

The Chair said, “If there’s no further questions, can we agree the recommendations on page fifty-five, 11.1 agreed?”

The Committee agreed the following recommendation:

That the Committee notes the Report and Appendix 1 concerning the changes being introduced by the Audit and Accountability Act 2014 and its implications.

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Cllr Steve Foulkes “I daren’t pick on the libraries because of my past”

Cllr Steve Foulkes “I daren’t pick on the libraries because of my past”

Cllr Steve Foulkes “I daren’t pick on the libraries because of my past”

                           

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Cllr Steve Foulkes had this to say about the Internal Audit update and its appendix presented to the Audit and Risk Management Committee, which starts at 20:20 in the video above.

He said, “Yeah, well I mean this report is good and it’s followed every month by the updated report on work that’s going on and I’m glad this work’s going on, but I think audit and risk can be a pretty dull committee for its old hands but I think what we should always try to do is put what we’re learning and what we’re investigating back into the real world in many ways.

If you look at the report around the libraries, and I’m not going to go into a debate about that, I’ve got too many scars over that. However, however, I need to be reassured that this isn’t an aspect of the service either because of the changes that have to be made or changes that are coming about or just a general poor management that’s taken place because often things like this are not just a symptom of poor regulatory or financial issues but are lack of morale, lack of motivation, lack of care in the service or a feeling perhaps sometimes of you know well ‘we’re untouchable, nothing else will happen’.

We’ve got twenty-four libraries, I think that the decision has been made that those assets are vital assets and the community have made an opinion about them, but at the same time they have to be run extremely efficiently, like every service that we have to justify what they’re doing and we’re asking them to take on more and more.

There’s no reason why the libraries shouldn’t be part of the front line sort of places where people do business and have trust in. So I’m just sort of saying that this has been investigated. If it’s a general malaise or a general lack of management or misunderstanding then certainly you know we are combining one stop shops with libraries, they are coming more along and if we’ve got twenty-four, there again we’d better make sure we get every single pennies worth of value out of them for the future. So I’m, what I would like to do on this is committee is actually use the audit in a broader way to draw attention to what is happening with the rest of the Council.

Likewise in 2.2, the Invigor8 direct debit, one of the ways the Council needs to become more efficient is encourage more people to do things like that with direct debit, the most you know quickest, cheapest form of transaction. So if 100% of the population did everything by direct debit, there would be considerable savings, so when we have a direct debit system that undermines public confidence in the Council and how it delivers those systems it makes alarms bells ring a little bit more in my head and says, ‘Come on, you know we can’t, we’ve got to be so spot on.’

We are actively, I hope actively tempting people to use and address Council services in the cheapest way for us and therefore protect more services that are not available. So I like to look underneath the headlines of you know, we made a mistake there some people I believe got £400 debit as opposed to a £40 debit. How many people will they have told about that? How many people will they say, ‘Don’t do a direct debit with the Council, they get it wrong!’

So my view is that you know these points can’t just be brushed over and say oh well it’s just you know librarians can’t manage money, well they have to if that want to work for the Council. Anybody has to manage money efficiently and our job of the audit is to see those signals and ask some more searching questions about what’s going on underneath.

You know if I just read that one particular site and I’m not saying this now I’m picking on the libraries, I daren’t pick on the libraries because of my past but as I say we’re asking them to become more front line, more proactive if they need to understand anything else. So I’m asking those questions, maybe Mark on my behalf could ask one of the heads of service who might be able to understand what’s going on on the ground.”

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Consultation feedback and questions to Improvement Board (15th November 2013)

Consultation feedback and questions to Improvement Board (15th November 2013)

Consultation feedback and questions to Improvement Board (15th November 2013)

                                    

Handed out at last Friday’s Improvement Board meeting were the responses to the consultation received so far, motions passed at the Audit and Risk Management Committee and Coordinating Committee and the questions submitted in advance of the meeting by the members of the public as circulated at the meeting (although some of mine were subtly altered).

I’ve checked the Improvement Board section on Wirral Council’s web