Council Fraud up £50m Eric Pickles- so let’s relax auditing nearly 100 authorities

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Eric Pickles: Slashing audit checks as council fraud booms

Detected fraud in local councils has jumped £50m in one year – with the biggest scams involving cheating on council tax benefits, unlawfully subletting council homes and false benefit claims.

 You would think Eric Pickles, the communities secretary, and Grant Shapps. the local government minister, would only be too delighted that someone is collecting this, advising councils how to tackle the problem, and saving the taxpayer up to £185m.

But soon you won’t know because the Audit Commission, the body that collects  all this information,  is to be abolished. And to save more money the government is raising the ceiling on councils that needed to be fully audited from £1m to £6.5m next year.

 Perhaps you might think these councils – mainly town and city councils, museums and drainage boards, are paragons of virtue and nobody working so close to the parish pump would dream of defrauding them.

But read the Audit Commission report,Protecting the Public Purse 2011, (summary and download here http://bit.ly/sSfVJG ) and you will find that one parish clerk managed to defraud four councils  out of £63,000 and get an 18 month prison sentence. As the report reveals: “The clerk forged signatures, altered cheques, and made unauthorised payments to herself and her family. ”

The chair of one of the parish councils said, “We have had to take out a £30,000 loan as a result of her leaving us practically bankrupt.”

In another reported case a parish council clerk set up an internet banking account for the council without its knowledge. He used this account to pay himself. The clerk told councillors the council did not require an audit. Councillors believed him and failed to ensure their responsibilities for protecting public money were undertaken properly.

So perhaps it is a bit stupid of ministers to decide that 96 authorities each spending between £1m and £6.5m a year WILL no longer require a full audit – the perfect excuse for the fraudster who conned his local councillors.

Not only is  this an opportunity for fraud but incompetence as well. An investigation I did for Exaro News revealed that among the 96 – a number had recently had their accounts qualified because they were full of mistakes or just plain wrong. One authority, Swanage Town Council, was  qualified twice in successive years. Another council, Tavistock, was told by its auditors to  resubmit its accounts to the council because they had approved completely inaccurate documents.

 You will find the full story and the  list of authorities on the Exaro News website ( http://bit.ly/vWuRFK ). In the meantime you could always ask Mr Pickles to justify what he is doing – his work e-mail is eric.pickles@communities.gsi.gov.uk . Bet you he won’t want to know.

Barnet blogger row takes website hits to over 75,000:Twitter following tops 2000

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Interest in Barnet council’s appalling attempt to criminalise and censor Mr Mustard, a local blogger, took the total number of hits on this website to over 75,000 – they are now over 76,500.

 The blog attracted over 3150 hits last week – making it the second all time most popular blog. The only blog that has been more popular is one exposing how Tony Blair’s millionaire donors are now charging 6.5 per cent on their loans to the Labour Party – which has had 4258 hits. Thanks to local Barnet bloggers,Guido Fawkes, the Guardian, Liberal Conspiracy and the Taxpayers Alliance for highlighting the Barnet blogging scandal.

 The Barnet row even surpassed interest in the ever popular audit of Brian Coleman, Barnet councillor and chair of the London Fire Brigade, whose  greedy expense claims,   £100,000 plus council allowance payments and use of cheap subsidised housing has now attracted 2738 hits.

And  thanks to some 27 kind souls are now regularly subscribing free to the blog – so they can follow every word if they want to.

 Armchair audit is about to be revived – so watch for some new analysis of  the wealth of top people leading the charge to cut pay, jobs and services.  Meanwhile Twitter following has jumped over the 2000 mark – so thanks for that!

Barnet’s mad and bad plan to censor and criminalise the nation’s bloggers

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Barnet Council: Attempt to criminalize blogger Pic courtesy:http;// telegraph.co.uk

You couldn’t make this up. Barnet Council already facing trouble for illegally filming residents and bloggers coming to hear a council meeting on cuts, is now  seeking to censor and criminalize bloggers across the nation.

 The council has put in the most ludicrous complaint against a local blogger, Mr Mustard ( real name  Derek Dishman)  to the Information Commissioner claiming he has committed a criminal offence  under the Data Protection Act by not registering as a data controller  because he has made critical comments  about whether some of its officials have real jobs.

Using his right as a citizen he puts in regular FOI’requests to the council.  The row appears to have begun over critical comments questioning the council appointing a £50,000 change and innovation manager, Jonathan Tunde-Wright with  a remarkably verbose and tediously worded job description – for a job that seems to involve privatising everything. Phrases like ” delivery of  system thinking interventions” gives a  flavour ( see http://bit.ly/sQUmyA for full offending blog)

Now  Mr Tunde-Wright has his  personal website which contains his own creed for his work and  a commitment to “transparency and engagement “, ” community and accountability” and also a strong Christian belief :”  My quest to unravel the mystery of the cross of  Jesus Christ. That is a lifetime mission.” Nothing wrong with this ( Tim Montgomerie when at Conservative Home believed both in Jesus Christ and David Cameron). His website – with some interesting comments on council cuts following the recent BBC film is (  http://jonathan.uk.com/)

Now look at what Barnet Council did. On the day the Mr Mustard’s blog appeared they complained to the Information Commissioner seeking he had broken the law – and could face a £5000 fine- because he had ” processed personal data unfairly” and had no protection under the Data Protection Act.

 The council claims wrongly that ” the individuals involved do not refer to their employment with the council on their personal websites “( in fact Jonathan’s contains a link direct to Barnet Council) and ” views on the merits of their personal websites and blogs is not in the public interest.”

Initially rebuffed the council then came up with an extraordinary description of what Mr Dishman was allowed to blog without being forced to register or be prosecuted for unfairly processing data.

According to Barnet the only things bloggers can write about is their own personal data, their own family defined as people related by blood or marriage and their own household, anybody living in their house or flat.

Everything else requires registration and can be subject to legal challenge. The council even found an obscure Swedish case, involving a European Court judgement, against a member of the Swedish church  who released details of a number of local people waiting to be confirmed as why this must be done.

Luckily there has been an extremely robust response from the Information Commissioner.  They have dismissed Barnet’s second attempt with these words: ” If the ICO were to take the approach of requiring all individuals running a blog to notify as a data controller … it would lead to a situation where the ICO is expected to rule on what is acceptable for one individual to say about another.”

“Requiring all bloggers to register with this office and comply with the parts of the DPA exempted under Section 36 (of the Act) would, in our view, have a hugely disproportionate impact on freedom of expression.”

Thank God for some sanity. But what Barnet was really up to – to suppress freedom of expression, local comment  and intimidate someone who was using his right to ask them difficult Freedom of Information requests. By threatening to criminalize someone who in the ICO’s words writes a blog as a hobby, the authority is out-of-order.

If Barnet had succeeded it would have had enormous implications and costs for bloggers across the country. As Conservatives who are committed to transparency, the council should know better. They need to put up and shut up!

Barnet did not answer my questions about this. But I did contact both bloggers.

Mr Dishman said: “The likely response of the ICO if I needed to register would have been to invite me to register. I would have paid the £35 p.a. which is the only criteria to enable registration. If the council had succeeded in getting me fined £5,000 I would have paid it and then the blog would have become hyper critical and my work rate would have increased. What where they thinking? ”

He said he had no quarral with Jonathan Tunde-Wright or any of the officials named on his website.

Mr Tunde-Wright seems a bit bemused. “Speaking as a private individual it has felt like being caught in a crossfire somewhat.

” I think it is ironic that people like myself (and there are many of us in the public sector) who are truly passionate about public service and community empowerment appear to have been the targets of certain bloggers – talk of picking the wrong targets!

” I also do feel that by going beyond the Post to naming the Post Holder, referencing my personal blog and making particular comments, the said blogger may have crossed the line and placed myself and my family in this uncomfortable place of feeling harassed online.”

Barnet finally issued a statement to the Guardian today(tuesday):

“The council was concerned that an individual had used information gathered by the FOI process and linked this with other information to ridicule and abuse individual members of staff. The council consulted with the ICO as to whether this constituted a possible breach of the Data Protection Act.

 The ICO asked the council to make a formal submission, stating this was a currently a grey area.

It should be stressed that the individuals about which the council were concerned were not part of the council’s senior management team. The council does not tolerate the abuse or bullying of any of its staff.”

Why the Tories have only themselves to blame for not reining in BBC excesses

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Jeremy Hunt : Playing a blinder in making sure the public don't know too much. Pic Courtesy: The Guardian

Remember the great fuss from the Conservatives on how they were going to hold the BBC to account, expose those mega salaries paid to Graham Norton and Jeremy Paxman and make sure the taxpayer got the best value for their money from the BBC.

Well if you beleive  culture secretary Jeremy Hunt and Lib Dem culture spokesman Don Foster, it will be all happening from next year in the new cash frozen agreement to fund the BBC. He has spent the last year telling us about his success in allowing Parliament’s National Audit Office the right to launch any inquiry it likes into whether the BBC is value for money.

To quote him directly: “It is right that licence-fee payers have confidence that the BBC is spending money wisely, so I am pleased that the NAO now has the right to full access to BBC information. Its new power to decide which areas of activity to scrutinise will increase transparency while maintaining the BBC’s independence.”

In fact this statement is the worst kind of spin and churnalism. The hilarious fact is that the national papers that were critical of the BBC, the Daily Mail and Daily Telegraph plus for that matter the Huffington Post website  ( see it here http://huff.to/vDq6y5 ) fell for the whole thing, hook line and sinker.

How do we know this to be true? Well reluctantly after both the NAO and culture ministry had refused to reveal it,  all the correspondence between the remarkably named Amyas Morse, head of the National Audit Office, Jeremy Hunt and the Chris Patten, chairman of the BBC Trust and his predecessor Sir  Michael Lyons, were released under a  Freedom of Information request to Exaro News, the new investigative website I work for. You can see  the two detailed factual articles at http://www.exaronews.com/ .

What they reveal is that Amyas – the nearest person we have in Britain to ” Mr Taxpayer” was engaged in a bloody war of attrition with the BBC and Mr Hunt on behalf of you, the licence fee payer, to get proper unfettered access to the BBC and that he lost.

At one stage he was extremely fed up.  In Whitehall language he wrote, ” “I am concerned that audit access that depends on continuing agreement between the government and the BBC rather than on statute leaves important matters unresolved and may mean that, in practice, the coalition’s proposals may not take things much further forward in terms of independent scrutiny of the BBC.”

In even more stark language he said:”“I am disappointed that it remains your view that my reports should reach Parliament via the BBC Trust and secretary of state.” “It raises the possibility that the BBC Trust or the secretary of state could redact material or, indeed, not publish the report.” You can  download all the letters at the Department of Culture, Media and Sport website See http://bit.ly/ujwp60 if you want to trawl through them.

The reason why this public official is so cross is plain to see. Why he might have the right to investigate what he likes, he is shackled by what he can find out. For a start all those BBC stars can protect their deals from public scrutiny because he has no statutory right of access and cannot override the Data Protection Act.  Even the Royal Household is not so well protected from this and the mega salaries, also paid by the taxpayer, and  the rest of Whitehall can be  scrutinised.

Also no other organisation  examined by the NAO can delay the publication of a critical report by running off to the secretary of state.

Hunt also rejected giving the right of the NAO to audit the BBC accounts – something I am told auditors find extremely useful because  throws up very quickly information when money is misspent.

  He told Morse: “I do not intend to give the NAO statutory access. “I am not persuaded that I should require the BBC to appoint the NAO as its external auditor. I do not consider this is a necessary step in ensuring that the government commitment on NAO access is achieved.”

 Finally he put a gun to his head: ” “If we do not reach agreement, the NAO will not have access to the BBC at least until there is another chance to review the agreement in 2016.”

Hunt has played a blinder over this. He convinced the media that he is Mr Good Guy when actually he is a baddie. The trouble is that  it is you, the licence payer, who have been conned. You could tell  him if you want to. His e-mail is jeremy.hunt@culture.gsi.gov.uk.

Update: Danes and British firms entertain Coleman to eye up AssetCo mess

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The new foreign shareholders of AssetCo could well be soon approached by British and Danish companies keen to take over  their business in London and take on new private fire contracts in the capital.

 The gift and hospitality logs of  Tory fire chairman Brian Coleman, and Boris Johnson’s fire adviser , David Cartwright, show they have recently been entertained by the top people from both firms.

David Cartwright had lunch with Richard Bond, development director of Serco, at the East India Club, the private schoolboy’s favourite haunt in St James’s Square, where he is chairman. While Brian Coleman was entertained by Jeroen Weimar – managing director of Serco at Livebait – a slight bit of a restuarant climb-down for Coleman.

The Danes not to be outdone sent their chief executive ,Allan Larsen, of Falck Danmark A/S. who met the £150 bill for both Coleman and Cartwright for dinner at Butler’s Wharf, Chop House.

 Both companies are known to see the fire service as a new target for privatisations once the new Localism Bill becomes law later this year.I also know that Boris Johnson, the mayor, is well aware of Serco’s interest.

 Meanwhile in the run up to the election Brian Coleman shows he has no intention in slacking on  his expenses claims – he has already notched up £1621 on taxis, mileage, accommodation and we are only just half way through the financial year. It looks as though he will  match his £3500 plus claim  last year without too much sweat. I have updated my armchair audit of Coleman on this site to take account of these new developments.

Grant Shapps: The man killing the public right to expose another Dame Shirley Porter

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Grant Shapps: Abolishing the public's right to object

Eric Pickles, the communities secretary, and Grant Shapps, the housing minister, will shortly be publishing the government’s response to their consultation on the rather boring subject of holding councils to account after they have closed down the Audit Commission.

Hidden in this rather dense document is a rather nasty proposal which seems to go against everything they stand for in opening up councils to scrutiny. The ministers are on record in wanting to encourage armchair auditors, more localism, more public rights, openness, you name it.

Eric Pickles is even a  fan of my friend Mrs Angry- a thorny red rose in the side of true blue Barnet Council- much to chagrin of Brian Coleman and his friends.

 So it rather bizarre that top Tory politicians should include a measure to abolish a 150 year old right that brought to light one of the worst scandals in local government.

Dame Shirley: Would have been saved by Grant Shapps. Pic courtesy:busheywood.com

 The exposure of Dame Shirley Porter in the 1990s for the infamous ” homes for votes ” scandal that included ” gerrymandering ” votes by selling council homes in Tory marginal seats was only possible because of a public right to force an auditor to investigate.

As the report says: “Members of the public currently have rights to question the auditor of an audited body about its accounts and raise objections… in respect of unlawful items of account or matters on which the auditor can make a report in the public interest..

“Auditors have only limited discretion to refuse to investigate objections, but the costs of investigating objections, which are recovered from the local public body and, therefore, funded by council taxpayers, can be disproportionate to the sums involved in the complaint, or to the normal audit costs of the local public body.”

This rarely used power is now being scrapped because  as the paper says: “we consider that the rights for local government electors to object to the accounts are both outdated and over-burdensome on auditors, local public bodies and council tax payers.”

So  effectively Pickles and Shapps are saying it is too burdensome  for auditors to expose corruption and certainly not in the interest of local people to have the power to force the auditor to do it. One wonders why ministers are so keen to do this. Are they expecting more corruption? Do they not want the most forensic skilled person – the auditor – to examine accounts but rather as they propose go to lay people like the Information Commissioner and the local government ombudsman to do it? Or is Mr Shapps repealing this measure as a gift to a  secret fellow Tory heroine of his, Dame Shirley?

 I think we deserve to be told. You could try to get answers. Grant Shapps is a great user of Twitter, so you may send a tweet to @grantshapps. Eric Pickles is more old twentieth century and not very techy but he does have an email address, eric.pickles@communities.gsi.gov.uk.

 In the meantime I have written a full piece – one of five – on life after the Audit Commission – on the new Exaro News website. The link is  http://bit.ly/n8vRpc .

Taxpayer subsidised Brian Coleman’s hypocritical cheek in berating a single mum

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Brian Coleman: Paying half the rent of the single mum he berated

I don’t want to be seen hounding  Barnet and London Assembly Brian Coleman on this website but his latest outburst takes more than the biscuit. The man who takes £128,000 from the taxpayer in council allowances – he’s probably about the third highest paid councillor now – has recently berated a desperate single mum with a six-year-old son for complaining that she is  facing a £150 a month rent rise to £1100 a month.

 She wrote to him for advice as she said ” out of desperation in the hope that someone can offer me guidance”. Mr Coleman was unsympathetic to say the least. Ms Sharada Osman wrote back surprised at his lack of empathy.

Mr Coleman told her ” I am afraid you have to live in the real world where the country has no money and residents will have to deal with their own issues rather than expecting  ” the system” to sort their lives out.”

What Mr Coleman did not tell her was that he was living in a subsidised  flat, courtesy of the Finchley Methodist Church charity, where he doesn’t even  have the responsibility of painting his windows.

His  rent is £546 a month – half that of Ms Osman. In the real world – the rest of the road-people are paying £1100 a month, according to local estate agents.

Don’t believe me. Well his fair rent agreement is a public document obtainable on-line from the Valuation Office Agency. Search Electronic Rent Register and put in N3 1ND and you can read for yourself and even print your own personal copy.

Then I might suggest – as Mr Coleman seems finally to have got over his technophobia and can use e-mail, send him a e-mail about what you think about it. His work e-mails are

 
 I’ll be interested to see if you get a reply.

The American and British time bombs still under Liam Fox and Adam Werritty

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Together forever?- Adam Werritty and Liam Fox. Pic courtesy:http://www.parker-joseph

When Cabinet Secretary Sir Gus O’Donnell publishes his report this week on whether  former defence secretary Liam Fox broke the rules over his curious working relationship with ” adviser” Adam Werritty, it may not be the end of the matter.  There is still unfinished business across the pond in the US and there could be a kickback in Britain as well.

To use a metaphor that Mr Fox and his friend might be familiar just as  foot soldiers sent into battle in Afghanistan have to be wary of  the explosive danger of hidden IED’s in Helmand, Fox and Werritty are still in the middle of a minefield where one false step could be fatal.

One reason is that  a blogger from Manchester-Stephen Newton who had been pursuing  Fox and Werrity’s  Atlantic Bridge  Neo Con”charity” in Britain for two years – put a formal complaint into  the  US Internal Revenue Service about its sister organisation in America.

Basically the accusation was similar to the British charity whose organisers have just closed down rather than obey charity rules- that  Atlantic Bridge Inc was not a non-profit educational body which should avoid tax.

In a  cryptic reply, the IRS said it would evaluate the information they had received and decide whether to investigate but would not contact him until the investigation was complete. 

Remarkably ( and perhaps Revenue and Customs should do this here) they said that he might qualify for a financial  whistleblower’s award if Atlantic Bridge was found to be tax dodging.

 The IRS has still to inform Newton about his award  but has made it clear it will never discuss what action it is going to take. See his own website http://www.stephennewton.com/  for his  take.

 The signifance of this  is the US operation is totally bound up with the  British one – to the extent that it funded Liam Fox’ s charity and that some of the people thought to have bankrolled Adam Werritty on his trips with the minister may well be connected. On top of this as Sunny Hundal pointed out on the Liberal Conspiracy website last week, (see http://bit.ly/n53Oye ) they include through the American Legislative Exchange Council  links to powerful arms dealers like the Koch Foundation and the tobacco industry. It also backs the Tea Party. And one has only to look at the Guardian, Observer, Sunday Telegraph and the Times to see how extensive these connections are.

Now ,if and it is still if, the IRS acts against Atlantic Bridge Inc, this is only going to intensify the pressure on the people who have been backing Fox and Werritty and set a whole new trail going in the US ( no wonder the blogger has taken calls from the Wall Street Journal).

Meanwhile in Britain the trustees of the Atlantic Bridge charity have closed it down rather than comply with recommendations from  our own Charity Commission to make it less partisan.  the Commission seemed  to think it had to treat Atlantic Bridge with kid gloves. Indeed  unlike the treatment of the Smith Institute – slammed for links with Gordon Brown – it was almost obsequious in its dealings with a body that had five Tory shadow ministers advising it ( though two, Michael Gove and Chris Grayling can’t remember attending – I hope they take their present paid jobs more seriously!)

The Commission gave the charity months to change its rules – despite a decision that it was partisan which would disqualify it for charity status. Adam Werritty at the time objected to the findings-saying he was ” disappointed” by the ruling.

There was also the small question that five Conservative ministers-Liam Fox,George Osborne, William Hague,Michael Gove and Chris Grayling plus John Whittingdale ( current chair of the culture,media and sport committee) were all members of its advisory board of  what  is now known not to be a properly constituted charity.

 If I was a sharp tax inspector at Revenue and Customs I think I might decided to approach  the accountants of prominent donors like  Tory donor Michael Hintze   ( £47,000 in two years according to Atlantic Bridge Accounts) and see whether the donated money qualified for gift aid-saving tax payments by both the donor and the charity. And then I would claim it back.

Atlantic Bridge also charged unbelievable sums to attend its events -£400 a time and £700 for VIPs- to go to a  reception at the Lanesborough Hotel in Hyde Park Corner to see Henry Kissinger get the Thatcher Medal for Freedom. Luckily under gift aid rules, at least the people going could not get a rebate from the tax authorities. No doubt it was these lavish occasions that encouraged Werritty on his high living vists, funded we now know through his private company.

There is an interesting irony about all this – the resignation will enable Fox and his friend Werritty to continue their lobbying. Journalists should keep an eye on the Advisory Committee on Business Appointments website over the next few months to see what lucrative jobs Fox applies for next.

 Just like the Afghan war, this story will run and run.

Berkhamsted goes live – community TV launched

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View of Berkhamsted's Grand Union Canal- Dee TV's HQ is alongside it. Pic courtesy http://www.localauthoritypublishing.co.uk

Today (Sun) sees the launch of Dee TV – a community web TV station- covering Dacorum – that for those who don’t know their Roman history- is Berkhamsted, Tring and Hemel Hempstead plus a host of Chiltern villages in Hertfordshire.

 It has been set up as a private initiative by mum and daughter, Lindy  and Mischke Weinreb, two of the more colourful people in the town, with local web and graphic designer, Alistair McDowall. Expect it to be an interactive TV station reporting on local events. Its initial site has lots of short films on it-  a couple from local schools, interviews with local artists and musicians and a report of a local rock concert on The Moor at Hemel. It also provides a lot of coverage for local charities.

 I have no personal interest in the site  – but am really pleased to see  more community activity and journalism in the area. So far it  is feel good rather than controversial but there’s room for everything. You can see for yourself at http://www.deetv.tv.

Back to the Future: David joins Exaronews Fleet Street’s first investigative news website

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From today I have started to put some of my investigations on a new City financed website, Exaronews.

For the first time in my long 40-year-old career I have started to work off Fleet Street in New Fetter lane and my local is El Vinos, where old hacks never die.

Fleet Street today more regarded as a heritage tourist stop where people reminisce about print and hot metal  will now become the venue for  a new cyberspace revolution-the rebirth of detailed investigative journalism on the web. The wheel is turning full circle with a site entirely dedicated to investigative journalism and detailed analysis of government,Whitehall, politics,foreign news and City investigations..

If you register for exaronews you will start getting,free of charge, stories from me examining Whitehall,  ( how £13bn of taxpayers money was qualified)local government  (the government’s plans for the Audit Commision)and the present dispute between the BBC and the National Audit Office. But there will be much more to come. Eventually there will be a charge -not all investigative journalism can be free!

Watch this space and enjoy government, politicians, senior civil servants and City people being brought to account by forensic examination of their policies.The link is http://exaronews.com