The E11 Business Improvement District company is slammed in independent report

Many businesses in Leytonstone High Road pay the levy.

Many businesses in Leytonstone High Road pay the levy.

First published in News
Last updated
East London and West Essex Guardian Series: Photograph of the Author by , Reporter

Directors of a publicly funded company set up to boost business in Leytonstone but which soon fell into financial chaos have been criticised.

An independent report, commissioned by Waltham Forest Council, criticised the E11 Business Improvement District (BID) Company for failing to maintain proper accounts for years and putting the organisation’s future at risk.

The organisation was set up in June 2007 to promote the interests of businesses in Leytonstone.

In return the businesses were charged a levy. Public bodies have also paid more than £150,000 into the scheme.

But the company has fallen into almost £87,000 of debt - forcing police to launch an investigation into possible fraud.

The report read: "The available evidence suggests that the company and its directors failed in their duty to maintain proper accounting records and systems for the first three/four years of the first BID term and it was only towards the end of 2011 and into 2012 that some level of control was imposed and records brought partially up to date."

“The structure is very unusual for a BID as these companies are usually registered as companies limited by guarantee, but the E11 BID is limited by shares, with two shareholders, Mohammed Ahmed and Fawaad Shaikh, each holding one share.”

Cllr Clyde Loakes, the current deputy leader of the council, sat on the board of the company between November 2010 and August 2011.

If the BID fails it is thought it would be the first in the UK to do so.

The council says it has not collected the levy since January because directors refused to agree to costs involved in collecting the levy, and the report stated there “must now be a significant doubt over the recoverability of outstanding income from some of those businesses”.

Estimates predict an investment of around £80,000 is needed to keep the company moving forward, which would mean around 18 months of further levy collection.

The debt figure is more than double what Fawaad Shaikh had previously estimated, and the figure continues to rise from penalties incurred for failing to pay PAYE and national insurance – an issue revealed in audit reports from 2010 and 2011.

The report also found that the first statutory accounts filed on time were those for June 30, 2012 – five years after the firm's first accountancy year.

It was noted, however, that the company had recently improved by appointing auditors, an external accountant and a full-time administrator.

Comments (11)

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2:23pm Fri 21 Mar 14

Villagecranberry says...

Is this a surprise? Most things that Labour get involved with in the Council ends in disaster or funds disappearing like a magic trick on the David Nixon show.
Is this a surprise? Most things that Labour get involved with in the Council ends in disaster or funds disappearing like a magic trick on the David Nixon show. Villagecranberry
  • Score: 14

2:31pm Fri 21 Mar 14

Dave mp says...

Villagecranberry wrote:
Is this a surprise? Most things that Labour get involved with in the Council ends in disaster or funds disappearing like a magic trick on the David Nixon show.
How very true.
[quote][p][bold]Villagecranberry[/bold] wrote: Is this a surprise? Most things that Labour get involved with in the Council ends in disaster or funds disappearing like a magic trick on the David Nixon show.[/p][/quote]How very true. Dave mp
  • Score: 13

3:00pm Fri 21 Mar 14

NTiratsoo says...

This report is certainly damning of all involved, and particularly the Council which by law was supposed to be regularly checking on how the E11 BID Co. was faring.

And other information is emerging week by week which points in exactly the same direction.

For instance, in a letter to me of 23 January 2014, Shifa Mustafa (Deputy Chief Executive Environment and Regeneration) stated unequivocally of money handed by LBWF to the E11 BID Co. that: 'All payments were monitored to ensure that the services agreed to were delivered'.

However, when subsequently questioned under the Freedom of Information Act, the Council has been unable to produce a single document or other piece of written material which substantiates that claim.

Put in a nutshell, it seems that for several years now, the Council has been handing large sums of public money to a variety of business bodies without any of the usual processes and safeguards, in stark contrast to the way it has treated the local voluntary sector.

One rule for business cronies and one rule for the rest, indeed.
This report is certainly damning of all involved, and particularly the Council which by law was supposed to be regularly checking on how the E11 BID Co. was faring. And other information is emerging week by week which points in exactly the same direction. For instance, in a letter to me of 23 January 2014, Shifa Mustafa (Deputy Chief Executive Environment and Regeneration) stated unequivocally of money handed by LBWF to the E11 BID Co. that: 'All payments were monitored to ensure that the services agreed to were delivered'. However, when subsequently questioned under the Freedom of Information Act, the Council has been unable to produce a single document or other piece of written material which substantiates that claim. Put in a nutshell, it seems that for several years now, the Council has been handing large sums of public money to a variety of business bodies without any of the usual processes and safeguards, in stark contrast to the way it has treated the local voluntary sector. One rule for business cronies and one rule for the rest, indeed. NTiratsoo
  • Score: 21

6:31pm Fri 21 Mar 14

mdj says...

Worknet;
O-Regen;
The Better Neighbourhoods Initiative;
The Arcade Site decade of stagnation;
All abortive, mismanaged and failed schemes that have cost this Borough tens of millions of pounds.
Nobody dismissed. nobody admonished, definitely nobody prosecuted!

Here we are again: a company, of which Cllr Loakes and Cllr Gray were directors, that has received many thousands of our money, but has never paid VAT over its entire existence! Did they ever read the accounts? Did they never ask any questions?
HMRC could put the BID company into liquidation at any moment, and yet the Council is still seeking to raise the levy from the long-suffering business members, to throw into this black hole.

And none of this would have been public knowledge had the councillors and officials had anything to do with it!
We all owe Nick Tiratsoo an enormous debt for his work in scrutinising our public life - the job one might have thought opposition councillors would do.
Can Cllr Loakes seriously aspire to lead this Council again, given his deplorable record of loss and waste?
What has he to say this time?
Worknet; O-Regen; The Better Neighbourhoods Initiative; The Arcade Site decade of stagnation; All abortive, mismanaged and failed schemes that have cost this Borough tens of millions of pounds. Nobody dismissed. nobody admonished, definitely nobody prosecuted! Here we are again: a company, of which Cllr Loakes and Cllr Gray were directors, that has received many thousands of our money, but has never paid VAT over its entire existence! Did they ever read the accounts? Did they never ask any questions? HMRC could put the BID company into liquidation at any moment, and yet the Council is still seeking to raise the levy from the long-suffering business members, to throw into this black hole. And none of this would have been public knowledge had the councillors and officials had anything to do with it! We all owe Nick Tiratsoo an enormous debt for his work in scrutinising our public life - the job one might have thought opposition councillors would do. Can Cllr Loakes seriously aspire to lead this Council again, given his deplorable record of loss and waste? What has he to say this time? mdj
  • Score: 14

10:19pm Fri 21 Mar 14

livedheretoolong says...

mdj wrote:
Worknet;
O-Regen;
The Better Neighbourhoods Initiative;
The Arcade Site decade of stagnation;
All abortive, mismanaged and failed schemes that have cost this Borough tens of millions of pounds.
Nobody dismissed. nobody admonished, definitely nobody prosecuted!

Here we are again: a company, of which Cllr Loakes and Cllr Gray were directors, that has received many thousands of our money, but has never paid VAT over its entire existence! Did they ever read the accounts? Did they never ask any questions?
HMRC could put the BID company into liquidation at any moment, and yet the Council is still seeking to raise the levy from the long-suffering business members, to throw into this black hole.

And none of this would have been public knowledge had the councillors and officials had anything to do with it!
We all owe Nick Tiratsoo an enormous debt for his work in scrutinising our public life - the job one might have thought opposition councillors would do.
Can Cllr Loakes seriously aspire to lead this Council again, given his deplorable record of loss and waste?
What has he to say this time?
It would be interesting to know what the opposition councillors think about this sorry state of affairs. After all there is a local election coming up in a few weeks time.

People living in the south of the borough who are bothered to read up about local affairs might be reconsidering who they should be voting for this time.

Or is it going to be silence as usual and and another easy win for Labour?
[quote][p][bold]mdj[/bold] wrote: Worknet; O-Regen; The Better Neighbourhoods Initiative; The Arcade Site decade of stagnation; All abortive, mismanaged and failed schemes that have cost this Borough tens of millions of pounds. Nobody dismissed. nobody admonished, definitely nobody prosecuted! Here we are again: a company, of which Cllr Loakes and Cllr Gray were directors, that has received many thousands of our money, but has never paid VAT over its entire existence! Did they ever read the accounts? Did they never ask any questions? HMRC could put the BID company into liquidation at any moment, and yet the Council is still seeking to raise the levy from the long-suffering business members, to throw into this black hole. And none of this would have been public knowledge had the councillors and officials had anything to do with it! We all owe Nick Tiratsoo an enormous debt for his work in scrutinising our public life - the job one might have thought opposition councillors would do. Can Cllr Loakes seriously aspire to lead this Council again, given his deplorable record of loss and waste? What has he to say this time?[/p][/quote]It would be interesting to know what the opposition councillors think about this sorry state of affairs. After all there is a local election coming up in a few weeks time. People living in the south of the borough who are bothered to read up about local affairs might be reconsidering who they should be voting for this time. Or is it going to be silence as usual and and another easy win for Labour? livedheretoolong
  • Score: 12

8:38pm Sun 23 Mar 14

Walthamster says...

mdj wrote:
Worknet;
O-Regen;
The Better Neighbourhoods Initiative;
The Arcade Site decade of stagnation;
All abortive, mismanaged and failed schemes that have cost this Borough tens of millions of pounds.
Nobody dismissed. nobody admonished, definitely nobody prosecuted!

Here we are again: a company, of which Cllr Loakes and Cllr Gray were directors, that has received many thousands of our money, but has never paid VAT over its entire existence! Did they ever read the accounts? Did they never ask any questions?
HMRC could put the BID company into liquidation at any moment, and yet the Council is still seeking to raise the levy from the long-suffering business members, to throw into this black hole.

And none of this would have been public knowledge had the councillors and officials had anything to do with it!
We all owe Nick Tiratsoo an enormous debt for his work in scrutinising our public life - the job one might have thought opposition councillors would do.
Can Cllr Loakes seriously aspire to lead this Council again, given his deplorable record of loss and waste?
What has he to say this time?
Thanks are due to Nick Tiratsoo and indeed to mdj as well - tireless investigators. But why is all this essential work being done by unpaid local residents?

What are opposition councillors doing? Nothing as far as i can see. i don't expect anything of the Lib Dems, who have been deeply entangled in Labour's shenanigans. But Labour does nothing for Chingford, which has conservative councillors. Why aren't they demanding value for their residents' money?
[quote][p][bold]mdj[/bold] wrote: Worknet; O-Regen; The Better Neighbourhoods Initiative; The Arcade Site decade of stagnation; All abortive, mismanaged and failed schemes that have cost this Borough tens of millions of pounds. Nobody dismissed. nobody admonished, definitely nobody prosecuted! Here we are again: a company, of which Cllr Loakes and Cllr Gray were directors, that has received many thousands of our money, but has never paid VAT over its entire existence! Did they ever read the accounts? Did they never ask any questions? HMRC could put the BID company into liquidation at any moment, and yet the Council is still seeking to raise the levy from the long-suffering business members, to throw into this black hole. And none of this would have been public knowledge had the councillors and officials had anything to do with it! We all owe Nick Tiratsoo an enormous debt for his work in scrutinising our public life - the job one might have thought opposition councillors would do. Can Cllr Loakes seriously aspire to lead this Council again, given his deplorable record of loss and waste? What has he to say this time?[/p][/quote]Thanks are due to Nick Tiratsoo and indeed to mdj as well - tireless investigators. But why is all this essential work being done by unpaid local residents? What are opposition councillors doing? Nothing as far as i can see. i don't expect anything of the Lib Dems, who have been deeply entangled in Labour's shenanigans. But Labour does nothing for Chingford, which has conservative councillors. Why aren't they demanding value for their residents' money? Walthamster
  • Score: 8

9:23pm Sun 23 Mar 14

mdj says...

' But Labour does nothing for Chingford, which has conservative councillors. Why aren't they demanding value for their residents' money?'

I have a suspicion that there are Labour voters in Barnet or Enfield asking similar questions.
The conclusion I've come to is that the Corleones and Capones find it less trouble to divide the spoils rather than fight over them.

But it's our money, and we need to fight for it!
' But Labour does nothing for Chingford, which has conservative councillors. Why aren't they demanding value for their residents' money?' I have a suspicion that there are Labour voters in Barnet or Enfield asking similar questions. The conclusion I've come to is that the Corleones and Capones find it less trouble to divide the spoils rather than fight over them. But it's our money, and we need to fight for it! mdj
  • Score: 6

11:03pm Sun 23 Mar 14

Walthamster says...

NTiratsoo wrote:
This report is certainly damning of all involved, and particularly the Council which by law was supposed to be regularly checking on how the E11 BID Co. was faring.

And other information is emerging week by week which points in exactly the same direction.

For instance, in a letter to me of 23 January 2014, Shifa Mustafa (Deputy Chief Executive Environment and Regeneration) stated unequivocally of money handed by LBWF to the E11 BID Co. that: 'All payments were monitored to ensure that the services agreed to were delivered'.

However, when subsequently questioned under the Freedom of Information Act, the Council has been unable to produce a single document or other piece of written material which substantiates that claim.

Put in a nutshell, it seems that for several years now, the Council has been handing large sums of public money to a variety of business bodies without any of the usual processes and safeguards, in stark contrast to the way it has treated the local voluntary sector.

One rule for business cronies and one rule for the rest, indeed.
So Shifa Mustafa (Deputy Chief Executive Environment and Regeneration) wrote to Nick Tiratsoo stating that all council payments to the E11 BID company "were monitored to ensure that the services agreed to were delivered".

Will Shifa Mustafa please tell us why the council couldn't find any documents to back up this statement? Even when legally obliged to do so under the Freedom of Information Act?

Deputy council leader Clyde Loakes was a member of the company's board during 2010-2011 when the company was (illegally) failing to pay PAYE tax and national insurance.

Will Cllr Loakes now tell us why he took no action?
[quote][p][bold]NTiratsoo[/bold] wrote: This report is certainly damning of all involved, and particularly the Council which by law was supposed to be regularly checking on how the E11 BID Co. was faring. And other information is emerging week by week which points in exactly the same direction. For instance, in a letter to me of 23 January 2014, Shifa Mustafa (Deputy Chief Executive Environment and Regeneration) stated unequivocally of money handed by LBWF to the E11 BID Co. that: 'All payments were monitored to ensure that the services agreed to were delivered'. However, when subsequently questioned under the Freedom of Information Act, the Council has been unable to produce a single document or other piece of written material which substantiates that claim. Put in a nutshell, it seems that for several years now, the Council has been handing large sums of public money to a variety of business bodies without any of the usual processes and safeguards, in stark contrast to the way it has treated the local voluntary sector. One rule for business cronies and one rule for the rest, indeed.[/p][/quote]So Shifa Mustafa (Deputy Chief Executive Environment and Regeneration) wrote to Nick Tiratsoo stating that all council payments to the E11 BID company "were monitored to ensure that the services agreed to were delivered". Will Shifa Mustafa please tell us why the council couldn't find any documents to back up this statement? Even when legally obliged to do so under the Freedom of Information Act? Deputy council leader Clyde Loakes was a member of the company's board during 2010-2011 when the company was (illegally) failing to pay PAYE tax and national insurance. Will Cllr Loakes now tell us why he took no action? Walthamster
  • Score: 9

10:13am Mon 24 Mar 14

NTiratsoo says...

Re the large sums of Local Authority Business Growth Incentive (LABGI) funding that LBWF gifted to the Waltham Forest Business Board (WFBB), and through it, the E11 BID Co., Ms. Mustafa wrote to me on 30 December 2013 as follows:

‘Following further investigation by officers of our records, including a review of materials recently found in archives, we are satisfied that the LABGI grant funding was spent by WFBB on the outcomes set out in the enclosed list…We can also confirm that over the period February 2010 to March 2011, the payment of these grant installments to WFBB was monitored by Waltham Forest Council through progress update reports provided by the Business Board and reviewed by the Council’.

On 9 January 2014, using the Freedom of Information Act, I asked for copies of the ‘material recently found in archives’ and the ‘progress update reports’.

As of this morning, 51 working days later, I have not received a reply or an explanation of the delay, placing LBWF well outside the law.

Needless to say, I have written reminders, and complained to the Chief Executive, Mr. Esom, copying in the Council’s senior legal officer, all to no avail – indeed, I have to say that the latter two don’t appear to me to be particularly bothered.

I do wonder what stops the Council complying with such a straightforward and reasonable request; and I am struck by its apparent disregard for the law.
Re the large sums of Local Authority Business Growth Incentive (LABGI) funding that LBWF gifted to the Waltham Forest Business Board (WFBB), and through it, the E11 BID Co., Ms. Mustafa wrote to me on 30 December 2013 as follows: ‘Following further investigation by officers of our records, including a review of materials recently found in archives, we are satisfied that the LABGI grant funding was spent by WFBB on the outcomes set out in the enclosed list…We can also confirm that over the period February 2010 to March 2011, the payment of these grant installments to WFBB was monitored by Waltham Forest Council through progress update reports provided by the Business Board and reviewed by the Council’. On 9 January 2014, using the Freedom of Information Act, I asked for copies of the ‘material recently found in archives’ and the ‘progress update reports’. As of this morning, 51 working days later, I have not received a reply or an explanation of the delay, placing LBWF well outside the law. Needless to say, I have written reminders, and complained to the Chief Executive, Mr. Esom, copying in the Council’s senior legal officer, all to no avail – indeed, I have to say that the latter two don’t appear to me to be particularly bothered. I do wonder what stops the Council complying with such a straightforward and reasonable request; and I am struck by its apparent disregard for the law. NTiratsoo
  • Score: 9

11:16pm Tue 25 Mar 14

Love your high street says...

This is an interesting one - Waltham Forest Council will pass on the levi to the BID Co. who squandered thousands into fines and surcharges. Surely, this is an act of irresponsibility - the Directors of the E11BID Co. must be laughing to bank!
The levi payers must get together to STOP this - is Tesco aware of any of this mismanagement as the largest member?
This is an interesting one - Waltham Forest Council will pass on the levi to the BID Co. who squandered thousands into fines and surcharges. Surely, this is an act of irresponsibility - the Directors of the E11BID Co. must be laughing to bank! The levi payers must get together to STOP this - is Tesco aware of any of this mismanagement as the largest member? Love your high street
  • Score: 2

11:40pm Tue 25 Mar 14

TTMAN says...

This is excellent, to all those pro active keep up the good work.
This is excellent, to all those pro active keep up the good work. TTMAN
  • Score: 3

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