Tag Archives: brian coleman

Scandal of John Shannon and Brian Coleman: Unacceptable faces of capitalism and politics

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John Shannon: dismissed by his own firm

This blog has followed  relentlessly the unfolding drama of  AssetCo, the company in charge of London and (until last week) Lincolnshire’s fire engines, which nearly went bankrupt last year and had its shares suspended until recently on the stock exchange.

But nothing can compare with the latest revelations in a dry annual report on the AssetCo website (link for anoraks who want the lot is  http://bit.ly/HVeFEN ). This much delayed report for an 18 month period – it had to be produced to allow its shares to be retraded- tells the real story behind the company’s near collapse which saw its share price drop from 60p to junk stock 1.75p. It has now emerged that dividend payments may have been unlawful, the company has been seriously ripped off by its former chief executive and the accounts were false for both 2009 and 2010.

 Revenue had been overstated by a massive £18.6m and a claimed operating profit of £17.4m was actually an operating loss of £11.4m.

But the company still owes banks a massive £43m – despite creditors taking a 78 per cent hit and its auditors, Grant Thornton  (also owed most of their fees) resigning.Even the restated figures cannot be guaranteed and PriceWaterhouseCoopers,who independently audited the firm, have qualified these accounts. Grant Thornton incidently missed all this -just as they did over MetPro-Barnet’s bust private security firm-bankrolled by Barnet Council.

As the company itself says:”errors include the effects of mathematical mistakes, mistakes in applying accounting policies,oversights or misinterpretations of facts, and fraud.”.

Worse it is quite clear that the only major source of money for the firm in Britain is the council taxpayer in London which is keeping  it afloat to the tune of £3om a year. Even here banks are going to have  to give another bail out and Lloyds have a massive interest because they currently own the London fire engine that comes out on call.

 This is where the scandal of Brian Coleman, the Tory chair of the London Fire Brigade, and John Shannon its former chief executive come in.

Coleman was entertained at least four times by Shannon and accepted an expensive Christmas hamper from Harvey Nicks (see the armchair audit of Brian Coleman in previous blog) and has been AssetCo’s cheer leader.

Now it is clear from this report that Shannon was dismissed by the board of AssetCo because of this financial shenanigans.

I quote: “The new board have been informed that under the stewardship of Mr. Shannon and Mr. Flynn there was a lack of transparent reporting, requests for information were ignored, and related party transactions were entered into without full board approval. The new board cannot be certain that all issues have been captured.

Mr Shannon was dismissed as an employee for breaches of fiduciary duty and whilst the company has not carried out a full investigation, as previously announced in May 2011 in connection with the claims against the Company by Messrs Shannon & Flynn in support of the winding up petition, it identified counter claims against John Shannon of £4.6 m and also counter claims for breach of fiduciary duty of £3.4m against Frank Flynn.

Frank Flynn was the chief financial officer and a mate of John Shannon.

The report reveals that Shannon and Flynn also shared the bulk of a £847,000 pay out in dividends that are probably illegal. And Shannon before he was dismissed managed to up his salary and benefits to a staggering £492,000 and Flynn got an unapproved £30,000 redundancy payment.

Even worse they appears to a dodgy property loan amounting to £1.5m to Shannon. This involved a property company called Jaras.

 The report says: “In respect of the ‘Jaras’ transaction, AssetCo have reviewed internal communications between the date in December 2009 when the £1,500,000 was first paid, and finalisation of the 2010 audited accounts,the management and statutory accounts for the business occupying the property and concluded that:

a) on an arms length basis it would be difficult to substantiate effectively paying six years rent in advance in respect of the property,

b) the payment was originally classified as a Directors’ Loan and was subsequently reclassified as

prepaid rent in order to satisfy audit disclosure requirements, and

c) the business occupying the property is now in Liquidation. ”

It adds: “there is sufficient doubt that either Jaras (where a Receiver has been appointed) or John Shannon will repay the amount.”

The report also reveals that London AssetCo which has assets of the London fire brigade has been moved to another off the shelf company and the firm’s  Middle Eastern operations (see another blog they are servicing the military in the United Arab Emirates)  are now based in a Bermuda tax haven, to keep them secure from any other collapse in Britain. Wise move, as Lincolnshire have sacked AssetCo.

Brian Coleman: AssetCo cheer leader and entertained by John Shannon

The real scandal in this story is that this woefully badly run company has been kept afloat by politicians in London. Coleman and Gareth Bacon should shoulder this blame -with their blind belief that privatisation is the only answer.

 But Coleman is more culpable because of his personal  links with Shannon and acceptance of gifts from a man  now dismissed from the firm. Shannon may get away with all this but you do have a choice next month to make sure that Coleman never darkens the London fire brigade again.

Removal  would be a service to  Londoners  and you have a vote at the Greater London Assembly elections in Barnet and Camden.

Brian Coleman: “Human Rights-My Backside!”

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Brian Coleman - no to human rights

Tory councillor Brian Coleman – standing for election again this May as London Assembly Conservative member for Barnet and Camden – is at it again!

 In an interview for a foreign TV station he is making it clear again that he wants stringent controls over everybody who blogs on the internet – after the failed ” complaint” by his local council Barnet to try and get local blogger Derek Dishman fined and registered under the Data Protection Act for publishing public details about the views of Barnet officials on their own websites. If successful Barnet would have prevented bloggers writing anything about anyone except their own family and housemates -without being licenced by the DPA.

In an extraordinary interview – see www.youtube.com/watchv=0uuj1il43xg&feature=youtu.be  the councillor demands censorship and libel action against bloggers- and evidently beleives they don’t have right to criticise him or anyone else without bweing taken to court.

 What is worse it appears after this youtube except was put up on the website t00manycuts.blogspot.com  followed a comment on Twitter Mr Coleman successfully moved to have the authors removed from their Twitter account. I don’t quite know what  the tweet said but it was not flattering and it may to do with the fact that he is living a subsidised Methodist housing charity flat while claiming £128,000 a year council allowances from four authorities and organisations.

Coleman has never responded to the accusations – but always been happy to condemn poorer people who complain about rising rents.

 Curious to know what David Cameron, Grant Shapps ( the local government minister) and Boris Johnson might think of his views on human rights and the internet. But if you are planning to vote for him, he is obviously standing on a platform of removing human rights from all Barnet and Camden citizens. Great platform for a democracy!

 Let him know  your views on this> he is contactable on

toomanycuts.blogspot.com

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!

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.

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.

Judge aids rescue package for ” bust ” privatised London fire firm

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Mr Justic Floyd-Helpful to AssetCo Pic courtesy:thisislondon.com

A High Court judge came to the potential rescue of AssetCo, the near insolvent owner of London and Lincolnshire’s fire engines, by granting the company  another month to negotiate an extraordinary deal with its  creditors to wipe out debts of over £100m.

Mr Justice Floyd, sitting  at the Royal Courts of Justice in London, granted applications to adjourn  moves until September 28  to wind up the firm in favour of allowing  the company to open negotiations with its creditors on a deal that will recover some of their lost investments.

Mr Lloyd Tamlyn, for AssetCo, explained that if the company went bust now, the banks and other investors would be lucky to get 0.5 per cent of their money back. But if they agreed to negotiate with the company on a deal they could walk away with 23.5 per cent. In return they would have drop any further demands for cash, wiping out the £100m plus owed by the firm.

 In effect investors in AssetCo look set to lose some £77m. Since the judge was aware that this case was being reported, AssetCo were careful not to ( as at other hearings) list who is owed what.

But from the previous hearing ( where the registrar was not aware he was being reported) the creditors named included  state-owned Halifax Bank of Scotland which is owed £12m and energy company, EDF, which suggests AssetCo may not have paid fuel bills for premises they run in London. Others include FD Direct, the Inland Revenue. They will still be big losers.

The difference the deal would make is shown by Northern Bank who are owed £1.3m and have been very active in opposing moves by AssetCo to give preferential pay outs to its lawyers and accountants.

Adam Goodison, for Northern Bank,  who had pressed for the company to be wound up, explained to the court why the firm is now ” content”  for the deal to go ahead. This followed negotiations that changed the creditor status of Northern Bank, so it could benefit from the proposed pay out.

If AssetCo went bust the bank would be lucky to get £10,000 back from the £1.3m they put into the company. Under the revised deal the bank would get back nearer £300,000. The same would apply to other creditors.

 The question – dealt in passing during the hearing – is where has AssetCo got the cash to even finance this deal? It appears to have come from money raised from international financiers who have given another £10m cash to the company on top of money raised earlier this year which severely diluted its share price to near junk status.

At the last court hearing the financiers were named as North Atlantic Value LLP, a part of the J O Hambro Capital Management Group, Utilico Investments Limited and Henderson, which incorporates the interests of Gartmore Investments Limited.

A hint came from Northern Bank’s lawyer after the hearing when he told me that the deal could be “good news” because it could rescue the company and remove most of its debts. He thought investors were ” taking a punt” on the firm’s future.

The majority of the investors will still have to agree before the deal can go ahead and it will need final approval of the court on September 28 – but the judge’s move means that it could get Brian Coleman, Tory chair of the London Fire Brigade, off the hook from seeing London’s fire engines owned by administrators.

 Once the debt is cleared it then makes the company more attractive to a take over. Nothing more was said in court about a bidder – known to be Arcapita Bank in Bahrain – which suggests they have gone cold on the idea.

The situation is far from satisfactory and does not rule out a slow death of the company,reflected in its low  2.2p share price, valuing it at £5.52m today.

FBU general secretary Matt Wrack said: “Privatising emergency services is stupid and dangerous. The long, slow death of AssetCo is a perfect illustration of this.  We still do not know what is going to happen to London and Lincolnshire’s fire engines.  They are, we believe, going to be the property of AssetCo’s creditors when AssetCo finally goes under.  I call on the London Fire Brigade and the government to bring the fleet and their maintenance back into public ownership.”

This blog was trying to contact Tudor Davies, head of AssetCo, for a comment.

Exclusive:Are London’s fire engines to be owned by a firm whose advisers advocate jihad?

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Arcapita's swish Bahrain hq: Picture courtesy:http://thebigprojectme

Just when the appalling story of the near bankrupt company,AssetCo, which owns London and Lincolnshire’s fire engines, nears its conclusion,  there is a new and extraordinary twist to the tale.

AssetCo in desperation to stave off bankruptcy on Monday is negotiating a take over with Arcapita Bank, a Bahrain based but Arab and Indonesian privately owned company. This firm because it is owned by Saudis is governed by Shariah law and any transaction must be approved by a special committee of  Sharia advisers.

 Now an investigation by me has come across extraordinary information about their advisers and their views and connections with militant Islam. Enough for me to contact the company in Bahrain and ask for an explanation. Which is more than Brian Coleman, chair of the London fire brigade and Bob Neill, the fire minister, can do- because they have rendered themselves  powerless to do anything  under the terms of the contracts in selling off the fire engines and recruiting auxilliary staff to AssetCo in the first place.

Here are the details and the company’s response. They are three allegations, that they employed an adviser considered so dangerous by the government that he is banned from entering Britain; that they currently employ an adviser who advocates aggressive military jihad and there were involved in a big controversy in the United States over allegations that  their top man had secretly funded Osama Bin Laden.

The first case involves  Yusuf Al-Qaradawi , a man banned from entering Britain since 2008, after advocating the abduction and killing of US soldiers in Iraq and the killing of Israeli citizens. On other matters he is  tolerant, including allowing Muslims to consume a very limited amount of alcohol . He condones wife-beating as a last resort so long as it done lightly and thinks homosexual acts should be punished by the death penalty. He was chairman of  Arcapita Shariah Advisory Board.Ironically he came to Britain in 2004 and Ken Livingstone, the Labour mayorial candidate who approved the original AssetCo contract, shared a platform at City Hall which was condemned by Bob Neill, then a London Assembly member.

The company confirm his former employment: A spokesman said: ” He was an adviser only on aspects of shari’ah law and our relationship with him ended inFebruary 2002. ”

But since he has left he was had been replaced by another adviser Muhammad Taqi Usmani , a senior Pakistan Muslim scholar, and former judge who has recently advocated ” aggressive military jihad.” According to an article in The Times see http://thetim.es/pcASva– he believes Muslims should live peaceably in Britain,”  only until they gain enough power to engage in battle”. He has since corrected this impression suggesting a more ambivalent attitude to jihad.

He also as a former Pakistani sharia judge argued against the women’s protection law which made rape a criminal offence.

The company said ” We believe the report to be a mistranslation of what he actually said. He did not advocate aggressive military jihad.”

The final area involves a row in the US when Arcapita took over Cypress Communications – a company which manufactured a state of the art computer security kit. There was an allegation that the chairman of Arcapita,Mohammed Abdulaziz Aljomaih – was discovered on the ‘Golden Chain’ list of Bin Laden supporters and financiers which was seized in 2002 during an anti-terror raid in Bosnia.

There followed an inquiry by the Committee for Foreign Investment in the US  on whether the company -like the take-over of  US ports by a Dubai firm- and it ended with the company being allowed to run the company but not allowing non US national access to sensitive computer software. See:http://www.nationalcorruptionindex.org/pages/profile.php?profile_id=325

The company’s response is: “This claim was thoroughly investigated by the US authorities at the time and they found that Al Jomaih, chairman of Arcapita, was not the same person named in the list. Restrictions on non US citizens  were applied at the time, like any other foreign company buying a US company in a sensitive area , but these have since been lifted.”

The only person so far to raise this issue of Arcapita has been Matt Wrack, general secretary of the Fire Brigades Union. In a letter to Bob Neill he says: ” I am sure you will appreciate the importance of this at a time when we are still considering the outcome of the inquest into the 7/7 terror attacks.

“The simple truth is that this privatization has been a complete and utter disaster for all concerned. The complacency and lack of foresight of those responsible is an utter scandal as is the continuing attempt to pretend there is nothing wrong”.

My conclusion is that the arrangements which could lead to Arcapita taking over London’s fire brigade prove there is a major flaw in the government’s privatisation agenda .

If a firm that cannot be vetted can take over such a sensitive area- particularly as London Fire Brigade plays a major role in protecting the capital for future terrorist attacks, there is something seriously wrong.

 I cannot prove that Arcapita is not a fit and proper company to run the operational side of the London fire Brigade ( they own other less sensitive things like Freightliner and Viridian, N Ireland’s electricity). They also point out that their advisers are not employees of the company and they do not have any say in the operation of the company. Nor having just done a blog about the media misrepresenting Muslims, do I want to create scare stories.

But as a citizen I would want my elected representatives to guarantee that in such a sensitive area, they are safe to do so, and there is no hidden agenda behind this take over.

Anything less would be grossly irresponsible and playing with the lives of everybody who lives in London- whether they be Muslim, Jew, Atheist, Christian or whatever. I hope Mr Neill and Mr Coleman are listening.

Too expensive to investigate Barnet Council- the auditor’s excuse

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Barnet Council " too expensive to investigate"

Paul Hughes, the auditor who refused a public interest inquiry into the appalling £1.3 m MetPro security staff scandal exposed by my fellow bloggers has rejected a further appeal for an inquiry into Barnet Council’s extraordinary inability to monitor  its own contracts properly.

Only last week his inaction was singled out by Eric Pickles, the communities secretary, in a speech to the annual conference of the Chartered Institute for Public Finance and Accountancy (CIPFA) – the big wigs of the accountancy profession – for  missing the scandal altogether when his firm Grant Thornton audited Barnet Council for a £373,000 fee. Instead Pickles praised Barnet bloggers, Mrs Angry and Mr Mustard among many others, for finding out  what Mr Hughes missed. ( see my old colleague Patrick Butler in Society Guardian).http://bit.ly/pujHys Now he says he can’t really investigate because it will be too expensive for the taxpayer.

In a letter to Andrew Dismore, the  former MP for Hendon and Labour candidate challenging Brian Coleman for the London Assembly next year, he says:

“In considering whether to undertake work in connection with a public interest report we are required to balance the additional cost top the taxpayer with the nature and scale of the issue. The relevant Audit Commission rates for the level of staff  that would be required for this are up to £380 an hour (engagement lead) and £210 per hour ( manager) and there is some risk that at a cost to the taxpayer we can only repeat what is already in, or will be in, the public domain.”

” Our view remains that the most appropriate response for the taxpayers of Barnet is to allow the council to complete its own review before committing to any detailed investigation work on our part.”

He does promise that he will not hesitate to use these powers ” in the public interest” when the oucnil reports back in September if the soon to be privatised management are not ” robust” on their response.

Not surprisingly Mr Dismore is not satisfied. He writes back that  he finds his reply   “very disappointing, as I know will many other Barnet residents. Can you please set out  in detail what steps you will be taking to “monitor the situation and assess the management and internal audit review work”.

So there is no change here. The bloggers who got MetPro need to keep Mr Hughes on his expensive toes. A reminder: his e-mail is paul.hughes@uk.gt.com.

Exclusive:London’s fire brigade owners to go bust owing £140m on Monday unless a take over succeeds

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AssetCo: In a even deeper hole Pic courtesy TheScottishSun

AssetCo, the owners of London and Lincolnshire’s fire engines will go under on Monday, owing a staggering £140m to creditors unless a take over deal is agreed in the next 48 hours, a registrar’s hearing was told on Thursday evening.

In an extraordinary move in advance of Monday’s Companies Court hearing to examine thecompany being liquidated or going into administration, directors of AssetCo , lawyers, and  investment bankers sought to grab £86,000 in fees before the company went bust.

 Matthew Parfitt, lawyer acting for AssetCo, revealed that lawyers and investment bankers working on potential take over bid said they would ” down tools” or ” down pens” on saving the company unless the Registrar, Mr Briggs, validated fee payments immediately.

He  said  two directors, Tudor Davies and Tim Barrett, threatened to quit the company today (Fri) unless the court authorised payments of £25,000 for a week’s work and up to £1000 for expenses for hotel bills and meals. It was revealed Mr Davies is charging AssetCo £3000 a day for his work and Mr Barrett £2000 a day.

Mr Adam Goodison, acting for creditors Northern Bank, owed over £1.3m, revealed the figures, when he opposed any move to pay out the cash. He speculated whether there was ” panic among the professionals working for the company ” that had made them seek this order. Other creditors were sitting in the Room 412 at the High Court to observe what was happening to their money.

Mr Briggs described Assetco’s submission as ” extremely unattractive” and agreed with Mr Goodison that the company was putting ” a gun to the head of the court” by threatening to ” down tools”unless they received ” a substantial amount of cash.”

He refused to authorise the payments saying ” he hoped the gun will now not go off.” Instead he adjourned any decision to Monday’s hearing which stopped directors getting preferential treatment.

The scale of AssetCo’s woes were revealed in a submission from Mr Parfitt. They show that on Monday it could  go down owing between £117m and £140m and that money was disappearing on a daily basis.

Among the  major new creditors are state owned Halifax Bank of Scotland which is owed £12m and energy company, EDF, which suggests AssetCo may not have paid fuel bills for premises they run in London. Others include FD Direct, the Inland Revenue.

 He tried to talk up the one unnamed bidder still  said to be  in advanced talks saying the deal would mean all creditors would be paid in full ,all bank loans restructured and the company recapitalised. But his statement to the court means that four out of five potential bidders have now walked out.

Mr Briggs queried why in these circumstances the company had not give in confidence details of the bid to the court – which happens in similar cases- so the court could decide itself.

 Mr Goodison went further: ” If this deal is so wonderful why is there any need for this order and it would be unnecessary if it goes ahead.”

Then he detailed the demands for payment. They included a £25,000 flat weekly fee from a foreign investment bank which will get hundreds of thousands of pounds from a success fee if  it goes ahead and £36,000 to a firm of solicitors that has drawn up  the plan for administration.

The only people who came out well were Mr Parfitt and Mr Goodison who declined to take costs for the 90 minute hearing.

Matt Wrack, FBU General secretary said: “The demands the directors and advisors made to the court beggar belief.
“The London and Lincolnshire fire brigades do not own their fire engines and kit and are in crisis because they privatized all of their operational assets. Both brigades, the Mayor of London and Government have shown extraordinary complacency.
“The entire operational assets of both brigades could be seized by creditors and sold off in full or in part. Neither brigade appears to have any fallback plan of any credibility.
“The foolish decision to privatize all fire engines and kit leaves them sitting on the sidelines with no power over what happens to their critical operational assets.
“What was put before the court is a public scandal and makes clear in whose interest private companies work. Yet the only people making an issue out of it are the firefighters on the ground who do care about what happens and the impact it could have on public safety.
“There must be an end to privatization in any critical emergency service.”

 My comment on this is simple. Apart from this being another example of City directors blatantly trying to fill up their boots with oodles of cash at the expense of other people , questions must be asked about all the people who agreed that this company should be given multi million pound contracts. In London I am afraid this includes Labour mayoral candidate Ken Livingstone and Val Shawcross ( he declined to give a quote to me for a Tribune article this week), Boris Johnson  and Brian Coleman, chair of the fire authority, who extended AssetCo’s role. In Lincolnshire I am told senior officials were involved with the firm and then there are all the former fire chiefs who taken jobs with them.

AssetCo shares dropped nearly 13 per cent today to an all time low of 2.22p making it  worth just £5.77m. If  on Monday AssetCo goes down, there must be  an official inquiry.

Exclusive :The district auditor’s disgraceful response to the Barnet MetPro scandal

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Andrew Dismore: Right to complain Pic courtesy: thejc.com

The scandal over  the employment of security guards by MetPro Rapid Response is one of the worst examples of a council failing to monitor outsourcing of a service – the only one I know where an authority never even signed a proper contract. See my earlier blog at http://bit.ly/ktHKbs

 So it is  outrageous that  Paul Hughes, the  district auditor,has refused a request from Andrew Dismore, the former MP for Hendon and now Labour’s challenger to Tory Brian Coleman, for a full scale public interest inquiry into the affair.

Andrew rightly decided to report the council to the district auditor and call for a public interest report into the scandal. In his letter to Mr Hughes he pointed out:” Having been at the Council meeting when the Robocop style of security used by MetPro at the request of the Council first came under criticism, the consequent investigations have revealed a catalogue of catastrophic failures by Barnet Council and its leadership.

” This poor contracting and lack of financial control  is not a one off, as the Iceland investment fiasco and cost overruns of the Aerodrome Rd bridge confirm.

“What is especially worrying, is that the internal audit found there were inadequate systems to ensure the same thing did not happen again. The “One Council” initiative will create dozens of opportunities for more to go wrong too, with consequent mammoth losses to Barnet’s long suffering tax payers, if immediate corrective action is not taken.”

Mr Hughes reply is equally instructive:

“Where the body is already taking action to remedy deficiencies the auditor may conclude that a Public Interest Report at that point would only have limited impact and may in fact have the effect of unnecessarily undermining public confidence in a public body” (my italics).

“Therefore,whilst we consider that the matters raised in the internal audit report do represent serious internal control issues, our view is that a public interest report is not required at this time.”

He goes on to say the reasons he has refused a further inquiry is because Barnet has promised to investigate further and reform its procedure and because ” the matter is already in the public domain”.

He leaves a faint hope of reconsidering his decision if the council responds by significantly delaying reforms or the failure is found to be systemic (by the council investigating itself).

Barnet has responded. It is cutting  nine more jobs in the department supervising contracts – presumably to increase the scope for more mistakes.

 As  the leader of Barnet Labour Group, Alison Moore  says:” How will cutting posts help deliver an “effective and responsive” procurement service when the council are about to embark on complex privatisations?  I suspect this decision has more to do with saving money than sorting out the service. This is a barmy proposal.”

Andrew Dismore has challenged this pathetic decision of  the auditor whose company Grant Thornton managed to miss the MetPro scandal for three years and pass Barnet’s accounts without any question.

His letter warns: “Nothing could further undermine public confidence in Barnet’s administration, which is now at rock bottom as any objective resident would confirm and as evidenced by the Council’s own satisfaction surveying.”

 “My request for the public interest inquiry was not just in the context of Metpro, but more generally into Barnet’s contract letting and monitoring processes and checks. Only this week, the Hendon Times has carried on its front page yet another example, this time in the contracting (or lack of it) for care services, where failings at the social care centre with whom the Council failed to follow proper procedures and checks and to agree a formal contract actually led to the death of a resident with learning difficulties. Barnet are serial offenders presiding over a catalogue of procurement disasters. ”

…” there appear to be more deep seated problems with procurement and contracts that throw real doubt about the council’s capacity to take on the highly risky “easyCouncil” service outsourcing.  In the circumstances, I would invite you to reconsider your decision. ”

Mr Hughes will know that a public interest report by him could have wider implications for other councils. Given Barnet boasts it is a Tory flagship council that is blazing the privatisation trail – that is even more reason to check its public probity in this area.

Of course  there might be other reasons. I am sure Mr Hughes is a man of such probity that he  couldn’t have reached his decision in the knowledge that Grant Thornton, under new audit reforms following the abolition of the Audit Commission,, would need to persuade Barnet to continue its lucrative auditing contract. I mean he wouldn’t decide the commercial profits of Grant Thornton are more important than public probity. Or that given under the present rules Barnet will have to pay for the public interest report, that he could save the council money and avoid annoying Brian Coleman by refusing to investigate.

But you don’t have to sit back. If you, and say, all the bloggers in Barnet think Mr Hughes is wrong you can demand he reconsider. I suggest you do this to back up Andrew Dismore. You can email the auditor at paul.hughes@uk.gt.com .

A judge is likely to look sympathetically at large numbers of residents demanding the district auditor investigate  the £1.3m non contract with MetPro and Mr Hughes’ decision is subject to judicial review. I hope it won’t have to come to this.