For those who are not yet following me on Byline there is now a two part investigation by me into the cost – both financial and personally damaging – to British taxpayers of cabinet minister Chris Grayling. His nine years in office – from Employment Minister to Lord Chancellor and now Transport secretary – have brought misery to millions of people whether they are rail commuters, prisoners, victims of criminal attacks or faced discrimination at work. Some people have even had to plead guilty to criminal offences they did not commit to save money. Others have become victimised twice because of the debacle of his probation privatisation programme.You read the two part series in byline here and here.
To my surprise the number of hits on my blog soared to a new record of 464,000 this year- up by over 350,000 from just under 100,000 last year.
This huge increase was almost entirely to the support given by this blog to the plight of the 50s born women who are facing up to six years delay in getting their pensions.
I was persuaded by Joanne Welch, director of the BackTo 60 campaign – who I knew from previous work she had done in helping the victims and survivors of child sexual abuse – to investigate for the energetic campaign whether the government’s reasons for raising the pension age from 60 to 66 were justified. I found they were not on all counts from money, longevity to equality.
The result was a blog which revealed that a decision taken by the Thatcher government in 1988 – as much as £271billion had been denied to the National Insurance Fund – by the abolition of the annual Treasury grant and later limitation of grant payments by successive governments. This post attracted a phenomenal 188,000 and more hits. It still is attracting new readers today.
Subsequent blogs on the subject attracted 14,500, 19,000, nearly 31,000 and over 33,000 culminating in over 56,000 when – against the odds- the 50s women with the help of Michael Mansfield QC won permission for a judicial review. The blog telling you how you can boot out your MP if he or she won’t support the campaign – attracted nearly 31,000 hits – and led to an amazing 4,600 hits on the House of Commons library reference paper which gave a constituency by constituency breakdown of where the affected women live.
Thanks for the deluge of Christmas greetings from so many 50s women this year supporting the blog and my work.
The other main achievement this year which I can’t blog about – as I was member of the independent panel- was the report on the scandal at Gosport War Memorial Hospital where at least 456 elderly people had their lives shortened by the over prescribing of drugs. I am very proud of this report and the amazing professional collaboration led by former Bishop James Jones, who chaired the panel inquiry, that produced the findings hidden from people for nearly 20 years.
I also this year worked with the extraordinary Professor Suman Fernando, who at 85, is a tireless campaigner for mental health reform and author of a book outlining the history of racism in psychiatry.
I was a member of a working party which tried – with only partial success – to influence Theresa May’s planned reform of the mental health act. They were particularly exercised by institutional racism in mental hospitals which sees a disproportionate number of Afro-Caribbeans sectioned every year and some appalling examples of deaths in police custody. The mental health service is in a pretty bad state anyway.
I am unhappy about the outcome and will blog about this later.
domestic and sexual abuse
Last December I was invited to attend a national conference hosted by the BBC on domestic abuse and addressed by leading figures in government, the ministry of defence and Cressida Dick, the Metropolitan Police Commissioner on how employers could help people suffering domestic abuse.
This campaign was led by Elizabeth Filkin, another tireless campaigner and a former Parliamentary Commissioner for Standards. I blogged about it last December and was reminded this Christmas again when I willingly agreed as part of a libel settlement with John Hemming to donate £500 to the Victim Support charity and got it earmarked solely for dealing with domestic abuse.
There also was a great story of hope for child sex abuse survivors when a former victim who successfully saw his abuser jailed for 33 years for crimes committed in North Wales decades ago set up a successful volunteer project in Cumbria to tackle the issue of child sex abuse. See here
fire engine scandal
This year has seen a very gratifying outcome for those who followed the scandal over the privatisation of London and Lincolnshire’s fire engines which led them to be handed to a bunch of spivs who milked the contract for personal gain.
I have been following the story since 2011 when the Fire Brigades Union raised the issue of Assetco taking over responsibility for maintaining and replacing London’s fire engine fleet.
This year the Financial Reporting Council caught up with former Assetco directors John Shannon, Frank Flynn and Matt Boyle and barred them from practising as accountants for 16. 14 and 12 years respectively. They were branded fraudsters and liars for the way they handled the firm’s accounts and the Serious Fraud Office has been passed their details. The blog got over 4000 hits.
The accountant from Grant Thornton who supervised and passed the fraudulent accounts has also been fined along with his firm.
lack of reporting
The one common theme in all these stories – with the major exception of Gosport – has been the paucity or non existence of coverage in the mainstream media. They have been diverted by wall to wall coverage of Brexit but I think it reflects the fact of an increasing reluctance to put resources into proper investigative journalism. The country will be a far less informed place if this continues and it will give a green light to those who think they can get away with bad practices, incompetence, maladministration and fraud and ruin the lives of ordinary people without any proper scrutiny.
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A damning report was published this month by the Rail Accident Investigation Branch into an incident nearly a year ago which led to 450 passengers being urged to leave a stranded train and walk along the tracks within inches of a live high voltage electric rail.
The report is not only critical of this incident but raises the question whether there are systemic failures in our semi privatised railways which need urgently addressing. It reveals a string of other incidents that have happened in the last five years.including two cases where express train drivers had to lie under their trains to avoid being mowed down by trains coming in the opposite direction.
A Virgin Express train driver had to cower under his Inverness to London express just north of York to prevent being mowed down by a 105mph express in the opposite direction. The trainee signalman had failed to tell the driver of the stopped train that he had not halted other trains in the area.
Exactly the same thing happened again at Stafford six months ago when a Manchester to London Virgin express stopped because of a fault. The driver who was badly shaken had to hide under the train to avoid being run over by an express coming in the opposite direction.
Passengers getting out on to the tracks at Gospel Oak and waking to the station in 2013 – and a suburban train going forward without permission to take passengers off at Hackney Downs and almost overrunning a junction where it could have crashed into a train coming in the opposite direction.
This latest report was about a passenger train that was halted outside Peckham Rye station in South London last November after a fault automatically stopped the train.
The driver , who did not have a guard, got the go ahead from the private operator Aviva’s control centre to get passengers off the train. As the report says:
“This involved passengers climbing down vertical steps to ground
level, very close to the live electric conductor rail (third rail) and walking along the side
of the line for about 30 metres to Peckham Rye station.
“Soon afterwards, an operations manager from Govia Thameslink Rail, which manages
Peckham Rye station, contacted the member of station staff and realised where they
were and what was happening. The operations manager immediately instructed
the driver to stop the evacuation, and requested that he contact the signaller and
his company’s controller for further instructions. ”
…”The train driver and the signaller did not reach a clear understanding
about the actions that were required to safely detrain the passengers. The delay
caused unrest among the passengers on the train and contributed to stress and task
overload of the driver, which affected his decision making. The driver’s experience
and skills did not enable him to cope with these demands, and Network Rail did
not effectively implement its own procedures for managing an incident involving a
The scandal revealed here is the lack of communication between Aviva’s control centre, Network Rail, the signalman, which all put passenger safety at risk.
Of course both Network Rail and Aviva have said they have taken measures to deal with it. But the report reveals that in Aviva’s case very little has been done – particularly at its control centre. Inspectors returned after the incident and found:
l the environment within the control room was noisy and poor equipment was still
being used, both of which may cause distraction, and the floor plan was still too
2 poor communications (verbal / IT systems and written notes) were observed
and still evident;
3 a lack of coordination and awareness of the different roles within the control
room was still evident”
Simon French,Chief Inspector of Rail Accidents concluded: “Following previous incidents, the railway industry has put in place policies for managing incidents in which trains become stranded. This incident has shown that when things go wrong, these policies may not be effective. …. We are recommending that, both locally and nationally, the incident management arrangements should be reviewed, and processes put in place to exercise them regularly. It’s not enough to have a plan – it must work when it is needed, and if it has never been practised the chances are it won’t work.”
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This month one of the most devastating reports into a privatisation rip off was published by the Financial Reporting Council, which regulates chartered accountants. It involves a saga much reported on this blog, the failed privatisation of London and Lincoln’s fire engines, handed over to what are now revealed to be liars and fraudsters who ran Assetco at the time.
The three top directors, chief executive, John Shannon; chief financial officer, Frank Flynn; and group financial controller, Matt Boyle, could not even be bothered to attend a tribunal hearing to defend themselves against 27 allegations of misconduct. Shannon and Boyle are thought to be somewhere in South East Asia Flynn is in Northern Ireland
Between them they lied and hid millions of pounds ripped off from income paid by London fire brigade – the London Fire and Emergency Planning Authority – through a string of Northern Ireland companies and a consultancy to Abu Dhabi and falsified invoices from the London authority to boost the income of Assetco duping shareholders so they could live on the hog with large salaries.
The worst culprit was John Shannon who has been banned as practising as a chartered accountant for 16 years – a new British record – fined £250,000 and ordered to pay £300,000 in costs. This was the same man who wined and dined the now disgraced former Tory chair of the London fire authority, Brian Coleman, while simultaneously ripping off the authority for personal gain.
His story included in a damning FRC report is a trail of dishonesty and improper financial gain for himself and his family, His first act in 2008 was to take £1.5 million out of Assetco, ostensibly to invest in a Northern Ireland property company, Jaras Property Development. In fact the report found the money was transferred almost immediately from the company to Mr Shannon’s personal bank account to pay off a loan.
To compound his action when Assetco’s accounts were prepared for 2010 he created a false invoice and lied about the use of the money to fellow directors and the auditors, Grant Thornton.
The second dishonest act involved Assetco’s take over of Graphic, a company that provided lettering for vehicles, in 2010. Mr Shannon claimed he was owed £685,000 by the company. No documentation was ever found to prove the debt but the money taken from Assetco was the exact same money owed by this son, Joel, to clear a debt with another business he was running. The report concludes this was a sham.
He then moved to fiddle the accounts of another Assetco business, Assetco Abu Dhabi, which was launched with a £15m share issue. Included in the costs was a management fee to a firm called XYZ2 for £900,000. In fact there were no management services provided by this company, instead the money was used to pay off interest owed.
Earlier Mr Shannon and his fellow directors Frank Flynn and Matt Boyle inflated the goodwill value of three other companies,UV Modular Limited (“UVM”), The Vehicle Application Centre Limited (“TVAC”) and Simentra Limited (“Simentra”). All three had been bought by Assetco and had huge operating losses, all became insolvent, yet between them they were valued at over £15m.
UVM which built ambulances and mobility vehicles for the NHS was ” in a parlous financial condition ” and collapsed. It got contracts from the NHS by offering cheap deals which meant it lost money.
TVAC built chassis and fire appliances was acquired in 2007 and went bust in 2008 and was an operational disaster. But it was obviously intended to service fire engines for London.
Simentra had just three staff and was supposed to provide management advice for emergency services.
The report found Mr Shannon was well aware of this yet allowed the £15m for goodwill to be included as an asset in the company’s accounts.
Mr Shannon, Mr Flynn and Mr Boyle also inflated income from the London fire authority on purchasing equipment and providing emergency crew training. All this led to inflated accounts which Mr Shannon claimed he had not seen but the report found that he had lied to them about his knowledge of what was agreed to be published in the accounts. There is an earlier report on my blog here.
The conclusions against Mr Shannon are stark :” While there have been no actual convictions, certain of the activities contained within the allegations could be characterised as causing or facilitating fraud. The Jaras and Graphic Allegations amount to fraud on AssetCo by Mr Shannon. The XYZ Investment was also a fraud.”
The report also says the level of dishonesty even put the fire fighters work at risk. It is as well that Assetco operations in London and Lincolnshre went bust before the tragic Grenfell fire or their services would have only compounded the problems.
Most of the misconduct by Flynn and Boyle was to assist in covering up rather than exposing the dishonesty of Shannon.
Raymond “Frank” Flynn (former Chief Financial Officer) for banned from practising for 14 years and Matthew Boyle (former Financial Controller) for 12 years. Additionally, £150,000 and £100,000 respectively have been imposed and they share paying part of the £400,000 costs bill.
The Financial Reporting Council has a memorandum of understanding with the Serious Fraud Office which could launch a criminal investigation.
The SFO told me that they were aware of the case but could neither confirm nor deny whether they would take action. In my view they should pursue these people – even if they have left the country- with the aim of securing convictions so they can spend some time in British jails.
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On Wednesday two very highly paid civil servants £185,000 a year Richard Heaton, Permanent Secretary, Ministry of Justice and £190,000 a year Michael Spurr, Chief Executive, HM Prison and Probation Service will appear before MPs to explain their latest botch up – the privatisation failure of parts of the probation service.
I hope MPs on the Commons Public Accounts Committee will not only be briefed by the excellent National Audit Office report and investigation into the failure of Community Rehabilitation Companies – the fancy name for profit making companies like Sodexo and Seetec.
They should also read the coruscating report by Dame Glenys Stacey HM Chief Inspector of Probation and Peter Clarke HM Chief Inspector of Prisons last June on the performance of these companies and their failure to either help ex offenders go straight or protect the public from child abusers and perpetrators of domestic violence.
This sorry tale goes back to 2015 when Chris Grayling ( he of the current Virgin rail privatisation botch ups) was Justice Secretary and thought it a brilliant idea to privatise swathes of the probation service for prisoners serving 12 months or more who were at low risk of self harm.
From the very beginning they bungled it. They planned to give the 21 companies £3.7 billion until 2022 to handle and help large numbers of prisoners. The companies planned for this but Whitehall had overestimated the number of low risk ex offenders leaving prison and underestimated the number of high risk ex offenders who are still being helped by the publicly run probation service. As a result the companies would only get £2.1 billion.
So of course now the companies are in deep trouble facing losses of £443m by 2022. So what do these top civil servants do. They give them more of your cash to help them with their profit margins.
They have had a £42m bail out for dealing with fewer offenders in 2016 and another £22m to keep the companies going while the ministry kindly re-negotiates their contracts to deal with fewer ex prisoners.
It has now agreed to pay another £278m up to 2022 but has changed the terms of contract so the private firms will get even less money if any of the released prisoners re-offend.
Now if you read the inspectors’ report on the performance of these companies, this is a sick joke. The inspectors think their provision is so bad and useless that they might as well not exist.
They said: “Clearly there is more time for resettlement work with these prisoners, but CRCs are making little difference to their prospects on release. We found them no better served than their more transient fellow prisoners were some eight months ago. The overall picture was bleak. If Through the Gate services were removed tomorrow, in our view the impact on the resettlement of prisoners would be negligible. ”
But not only are they useless but they could be a menace to society. They were so bad at rehabilitating prisoners – they spent their time sitting at desks writing up reports on the computers – rather than helping them face to face. Some prisoners left to become homeless with little chance of getting a job.
But more seriously they let out child abusers, violent individuals who had beaten up their partners and drug addicts putting their victims at risk by having no proper supervision or rehabilitation plans.
In my view this £300m would be better spent funding refuges for victims of domestic violence ( in desperate short supply) or linking it back to the publicly run service.
You are paying for these companies to prey on the taxpayer without delivering any decent result and also allow released criminals to prey on their victims by their failure to rehabilitate them. No doubt the two highly paid civil servants will distance themselves from their failed policy when they appear before MPs on Wednesday
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This year my small news site received an extraordinary boost from a five year old post which appeared to have been regenerated by the Grenfell fire tragedy.
The Grenfell disaster showed the bravery of the London fire brigade in tackling such a grim scenario. Heroism and extreme tragedy side by side.
The post that got revived in the wake of the fire was the almost unbelievable story of how an Old Etonian baronet living in a semi in Wellingborough, Northants had got his hands on the management of London’s entire fire engine fleet for £2. It is probably still the most egregious act of privatisation in this country. He of course had to hand it back after a few weeks as he couldn’t run it.
The public authority had been powerless when the dodgy private company they gave the contract to maintain the fire engine fleet- Assetco London – handed over London’s fire service to the baronet as the directors realising the game was up and fled the scene.
The good news here – though it has never been reported by mainstream media- is the authorities in their own slow way are ensuring the perpetrators get their just deserts.
Grant Thornton , the auditors for Assetco, have been fined £3.5m (reduced to £2.275m after they co-operated with the Financial Reporting Council) and found guilty of no fewer than 12 cases of professional misconduct. The details are in this blog.
Robert Napper, the individual accountant responsible for auditing Assetco was fined £200,000, reduced to £130,000 after he co-operated with the inquiry. He had already retired but I traced him to an Oxfordshire village enjoying his expensive wines.
Now Assetco directors John Shannon, Raymond ” Frank ” Flynn and Matthew Boyle are to face a disciplinary tribunal by the Financial Reporting Council on January 15. The statement is here.
The press release reads:
“The Formal Complaint contains multiple allegations against each of Mr Shannon, Mr Flynn and Mr Boyle. The Formal Complaint includes allegations they acted dishonestly or recklessly; that they breached the fundamental principles of integrity and objectivity in the manner in which they prepared the financial statements; and that their conduct fell significantly short of the standards reasonably to be expected of members of Chartered Accountants Ireland (CAI). The complaint covers a wide range of issues which pervaded AssetCo plc’s financial statements.”
Some idea of what was going on has already been covered on this blog. Don’t hold your breath that the London Evening Standard will cover the story.
The original blog attracted over 2,500 hits when it was published. This year it topped my ratings with over 14,700 hits – showing that readers are interested in such issues.
Altogether over five years it has received some 20,000 hits.
The other stories have been posted on both my blog and byline.com – so the figures on my blog will be a small proportion of the number of hits on the stories.
The second highest hit from readers tells the heroic story of a London Midland train driver whose quick reaction in nine seconds prevented a commuter disaster near Watford. It came out in an accident report and had over 5170 hits and can be read here.
Two stories about the plight of the Conservative Party also rated highly. A story revealing that membership of the Conservative Party had plummeted to 100,000 attracted nearly 5000 hits and one on changes to the Tory Party constitution attracted well over 1700 hits. The two blogs are here and here and on Byline here and here.
On my site it got 2600 hits – mainstream media have finally followed it up last week but put the blame on Jeremy Corbyn instead.
The attempt to force Unison to rerun the election for the general secretary Dave Prentis also attracted a lot of readers. Again the public hearings by the Certification Officer received no coverage in mainstream media except the Morning Star. All the blogs received over 1000 hits – the largest being over 1850 hits for a blog publishing the statement of a former union official who accused the union of ” anti Democratic practices”. The link is here and here.
The issue is not quite over as a judge is due to hear the opponent’s case again for an appeal on February 8.
Three other issues made the top slots – the bonus payments to top DWP civil servants who set up the hated Universal Credit payments which I also wrote up for the Sunday Mirror; the scandal of 3.3 million pensioners who will have to wait years for the state pension and the prospect of two Tory Lord Chancellors facing legal action for institutional racism over the appointment of judges and tribunal members.
All this has to show that there is a public appetite for investigative journalism and the mainstream media are increasingly ignoring important stories by sticking to a narrow agenda. Much more to come in 2018.
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The present government has two song sheets. One is that Britain must big up everything we do to become a ” world leader ” after Brexit. The second is that we must do everything we can to cut the deficit – whether it is fresh benefit cuts or selling off anything the government owns as fast as possible..
The two came into conflict recently with the sale of the Green Investment Bank – and the deficit cutters won. The story of the sale of the Green Investment Bank is told in a recent report by the National Audit Office. Unfortunately the detail did not lead to much coverage in mainstream media which is why I am writing about it now. I have written a news story for Tribune magazine.
The deal which has allowed the sale to go ahead to Australian private equity bankers Macquarie for £1.6 billion is at the lower end of the its worth and without waiting for returns from big wind farm projects which are still under construction with public money.The NAO said this could have netted another £63m. This is the same company, by the way, that owns Thames Water, responsible for some of the worst pollution in the River Thames and also locally on the Wendover Arm of the Grand Union Canal (see an earlier blog).
The companies behind the sale did very well. The business department paid out a £1.1m success fee to Bank of America Merrill Lynch and a retainer of nearly £300,000 for completing the sale – part of a bill for £4.5m to sell the bank.
Macquarie picked up the bill for another £5m success fee paid to UBS by the Green Investment Bank itself to handle the sale.
The Department appointed Herbert Smith Freehills (HSF) to act as its legal adviser for the sale. HSF’s fee increased from £1 million to £2.36 million owing to the extended period required to complete the sale, the need for advice on restructuring GIB, the retained assets, the special share arrangements and judicial review which failed to challenge the sale.
Altogether Macquarie paid over £10m of the state bank’s fees to get their hands on the state bank. But what did they get in return?
An article in the This is Money website gives us a clue. It shows the government removed the restriction that the Green Investment Bank should only concentrate on the UK so Macquarie could make money worldwide and ignore the UK if it wanted. Greg Clark, the business secretary, personally signed this concession.
Macquarie of course denies this pointing out that it had invested £38m in a West Yorkshire waste from energy from waste project and insisting it will be a big player in the UK and Europe.
But events since the take over suggest otherwise – and there is no guarantee either that it will continue to focus only on green energy. Greg Clark let the bank get away with a non binding public statement to finance green projects for the next three years and the setting up of a trust – the Green Purposes Company -which could shame the new owners if they fail to keep to their pledge.
The evidence of backsliding comes from the trustees. In theory they have powers to prevent changes to GIB’s green purposes, but this does not extend to control of, or input to, investment decisions.
The five trustees are independently appointed and seem to be sound environmental figures. They include James Curran, former chief executive of the Scottish Environmental Protection Agency, and Lord Teverson, a former Liberal Democrat energy spokesman.But they are not paid to monitor such a big private equity company and a check on the website of the Green Purposes Company does not give much comfort either.
It reveals the first project is in Sweden – with a 300 million Euro investment in what will be Europe’s largest onshore wind farm joint with the US listed company GE which is in financial trouble in the United States.
The second is in a £30m investment in solar power in India – admittedly with a UK solar park company, Lightsource, partly owned by BP. The company is concentrating on green power in the Middle East, Asia and Europe as part of its partnership with BP.
And the third investment will be a 136 million Euro energy from waste scheme in Dublin, jointly run by a New Jersey incineration company, Covanta.
So far the new bank has invested £38m in the UK and over £400m (partly with GE) abroad.
The NAO conclude in their report the future direction of GIB’s investment focus and its relationship with the trustees remain untested. From the first four projects it seems quite clear that the UK will be on the sidelines. The 436 million Euro investments will be great news for Donald Trump’s ” America First ” policy but not such great news for Theresa May.