Legal action being considered by Hackney Council over collapsed charity O-Regen, which was based in Waltham Forest

A council may take its own legal action against some of those involved in a collapsed charity after police abandoned a criminal investigation into alleged fraud at the organisation.

O-Regen, also known as Orient Regeneration, had close ties to Waltham Forest Council and owned a number of community buildings in the borough, such as the Epicentre in Leytonstone.

But it went into administration in 2011 and was then subject to an 18-month investigation by detectives after neighbouring Hackney Council made allegations of fraud.

Waltham Forest Police announced over Christmas that it had dropped the probe but Hackney Council has now said it is considering taking further action on its own.

A spokeswoman for the authority said: "Hackney Council's enquiries concerning the payment of a grant to O-Regen remain ongoing and we are examining the options available to resolve performance irregularities concerning work that was carried out under the council’s contract.

"The options available include legal action and for that reason we are unable to comment in more detail at this time on the specific content of our agreement and the criminal investigation that was undertaken."

O-Regen was also awarded several contracts by Waltham Forest Council towards schemes to help the unemployed.

Between 2008 and 2010 it was awarded deals worth £400,000, but it failed to meet its targets.

Despite that Waltham Forest Council then awarded it another similar unemployment contract worth more than £1million.

Police said they abandoned their enquiries due to the "content of a contract" with Hackney Council, but have failed to elaborate and answer the Guardian's questions about what this means.

Conservative opposition leader Cllr Matt Davis, who was the chair of O-Regen's board of trustees, earlier told the Guardian he thought it was "odd" that officers only interviewed three people during their investigation.

Police have also not to responded to his claim that it was "strange" that officers did not speak to anyone from O-Regen's board during the investigation.

Comments (9)

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11:26am Fri 11 Jan 13

SXH says...

About time something was done, good luck.
About time something was done, good luck. SXH

12:32pm Fri 11 Jan 13

Sam Hain says...

I wonder if Cllr Davis is now mulling over the old adage "be careful what you wish for"?
I wonder if Cllr Davis is now mulling over the old adage "be careful what you wish for"? Sam Hain

2:36pm Fri 11 Jan 13

Trevor 2 says...

I foresee another whitewash!
I foresee another whitewash! Trevor 2

5:18pm Fri 11 Jan 13

NT says...

Just to be clear, between 2003-04 and 2011-12, LBWF paid O-Regen £2,144,147 in some 3,500 separate transactions, which covered everything from rent for training facilities, to the ill-fated Youth At Risk programme (for this see the Independent Panel report), to Team Leyton, to the NRF/BNI.

LBWF payments to O-Regen for Worknet were a subset in these transfers, with the contracts worth £1.3m, but actual payments worth only a fraction of that (because of under-performance).

The LBWF spokesperson is typically vague about which particular contract the Council is allegedly considering taking legal action over, but I would suggest that the fifth and largest Worknet contract is a good place to start, because the allegations about double-counting here were well documented, and reached the ears of several officers and at least one portfolio holder.

But I suppose that the most interesting question concerns who or what will be the defendant in the action. O-Regen is defunct, so no case there. Trustees will claim managers misled them, and anyway will LBWF want to risk the ire of the local 'great and good'? Ex-O-Regen managers might be a possibility, but they will claim - with some justification - that LBWF knew very well what was going on and did little about it, or even encouraged it, the the contracts were anyway vague as to target outputs, promised LBWF support was not forthcoming, etc., etc.

So its difficult not to believe that this is just bluster, designed to distract attention away from the fundamental fact that a Labour-run Council mismanaged a £9m. programme for the unemployed, yet still ended up quids in - because large amounts of un-spent Worknet funding ended up in the Council's reserves, and may then have been spent on absolutely anything...

PS You might be wondering about payments prior to 2003-04: they are apparently too difficult to itemise, at least when responding to a mere peasant such as myself.
Just to be clear, between 2003-04 and 2011-12, LBWF paid O-Regen £2,144,147 in some 3,500 separate transactions, which covered everything from rent for training facilities, to the ill-fated Youth At Risk programme (for this see the Independent Panel report), to Team Leyton, to the NRF/BNI. LBWF payments to O-Regen for Worknet were a subset in these transfers, with the contracts worth £1.3m, but actual payments worth only a fraction of that (because of under-performance). The LBWF spokesperson is typically vague about which particular contract the Council is allegedly considering taking legal action over, but I would suggest that the fifth and largest Worknet contract is a good place to start, because the allegations about double-counting here were well documented, and reached the ears of several officers and at least one portfolio holder. But I suppose that the most interesting question concerns who or what will be the defendant in the action. O-Regen is defunct, so no case there. Trustees will claim managers misled them, and anyway will LBWF want to risk the ire of the local 'great and good'? Ex-O-Regen managers might be a possibility, but they will claim - with some justification - that LBWF knew very well what was going on and did little about it, or even encouraged it, the the contracts were anyway vague as to target outputs, promised LBWF support was not forthcoming, etc., etc. So its difficult not to believe that this is just bluster, designed to distract attention away from the fundamental fact that a Labour-run Council mismanaged a £9m. programme for the unemployed, yet still ended up quids in - because large amounts of un-spent Worknet funding ended up in the Council's reserves, and may then have been spent on absolutely anything... PS You might be wondering about payments prior to 2003-04: they are apparently too difficult to itemise, at least when responding to a mere peasant such as myself. NT

5:21pm Fri 11 Jan 13

NT says...

Apologies: in para 3 line one it should be 'The council spokesperson'.
Apologies: in para 3 line one it should be 'The council spokesperson'. NT

6:34pm Fri 11 Jan 13

SXH says...

well said NT
well said NT SXH

9:31pm Fri 11 Jan 13

Techno3 says...

Once again, NT, you show why your unawarded knighthood to services to this borough is long overdue.
Once again, NT, you show why your unawarded knighthood to services to this borough is long overdue. Techno3

12:00am Sat 12 Jan 13

SXH says...

Techno3 wrote:
Once again, NT, you show why your unawarded knighthood to services to this borough is long overdue.
I agree for what he has done over the years i have known him.
[quote][p][bold]Techno3[/bold] wrote: Once again, NT, you show why your unawarded knighthood to services to this borough is long overdue.[/p][/quote]I agree for what he has done over the years i have known him. SXH

4:39pm Sat 12 Jan 13

barbus44 says...

Techno3 wrote:
Once again, NT, you show why your unawarded knighthood to services to this borough is long overdue.
Pity we can't say the same about the troll!
[quote][p][bold]Techno3[/bold] wrote: Once again, NT, you show why your unawarded knighthood to services to this borough is long overdue.[/p][/quote]Pity we can't say the same about the troll! barbus44

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