WALTHAM FOREST: Council apologises for poor fund fiasco

11:08am Wednesday 23rd July 2008

By Jonathan Bunn

SERIOUS failings in the management of regeneration funds have forced the council to promise to change the way it does business.

During a sombre Cabinet meeting on Tuesday, council leader Clyde Loakes and chief executive Roger Taylor apologised for mistakes by officers which led to rules aimed at preventing fraud being repeatedly broken over a number of years.

Investigations into deals involving the Neighbourhood Renewal Fund (NRF) and its successor, the Better Neighbourhood Initiative (BNI), uncovered a systematic failure to safeguard the proper use of money earmarked to help the most disadvantaged in Waltham Forest.

Five council officers are currently under investigation for not reporting the alleged fraudulent use of public money by EduAction, the private company which used to run education in the borough.

No firm evidence of corruption has been uncovered, although the authority cannot rule it out.

A probe into claims EduAction misused £240,000 it was paid to help vulnerable teenagers through the Youth at Risk program will be published at the end of the month.

But a damning interim report into the council’s role in the affair, and the authorities’ general handling of NRF and BNI, has forced cabinet to agree wholesale procedural changes aimed at ensuring much closer scrutiny of officers.

Tighter contract monitoring systems will be introduced in all departments and the officers authorised to approve contracts will be reviewed.

Chief executive Roger Taylor said: “I feel these things are so worrying and serious it is incumbent on me to apologise to councillors about the way things have been conducted.

“Others who work for the council have let you down. These are simple regulations set out for people to follow. In the future any breach of these rules will lead to immediate disciplinary action.”

He said: “We have let residents down, we have been let down as councillors - I am very disappointed.”

“This council has a lot of work to do to rebuild confidence in this organisation and how residents believe we are operating. It is clear this council cannot hide and I have not intention of hiding my disappointment and anger. We have clearly taken our eye of the ball.”

However Conservative group leader Cllr Matt Davis insisted councillors as well has officers must be held to account for failings.

He said: "As far as I'm concerned the fact that no elected members are mentioned in the reports completely removes their credibility. There must be political accountability."

Nick Tiratsoo has researched the council's handling of NRF and BNI over the last few years and is responsible for uncovering many of the issues now being addressed.

His inquiries raised serious concerns about a £47,000 NRF contract awarded to consultants Dr Foster Intelligence for research which was subsequently been found to be flawed.

A council investigation eventually revealed procurement rules had been broken when the contract was awarded.

He said: "I first raised grave concerns about the contracting and monitoring of NRF expenditure with Cllr Loakes in March 2004, and in the following years repeatedly wrote to him about this matter.

"In early 2007, he finally met with me and assured me that though there had been issues, he was taking a personal and vigorous interest in putting things right.

"Subsequently, both Council officers and councillors have either stonewalled my questions, or provided answers of dubious merit. Indeed, as recently as November 2007, the interim chief executive, Roger Taylor, told me regarding the procurement of Dr Foster Intelligence contract: 'I am satisfied that this matter was dealt with appropriately' - a judgement which was subsequently contradicted by the Council own audit and fraud team in a devastatingly critical report.

"Councillor Loakes and Mr Taylor now appear to believe that they are part of the solution to the Council's current deep malaise. I believe that they are in fact part of the problem."

Referring to the ongoing investigation into YAR, which is due to be published at the end of the month, Cllr Chris Robbins, cabinet member for children and young people, said evidence is being contested by EduAction.