Documenting Past Failures: (6) Cllr. Loakes, PwC, and the BNI Community Cohesion Projects

As I have described in the previous post in this series, the PricewaterhouseCoopers (PwC) report was a revelation. The figures already recounted tell much of the story. But to get a full picture of the chaos that PwC uncovered, it is necessary to look at some of its unpublished findings on individual BNI files, and there is no better place to start than with the batch concerning ‘community cohesion’. Let me set the scene.

At the beginning of 2007, I was becoming increasingly anxious about the BNI programme (not least because there appeared to be a looming underspend on the financial year of substantial proportions) and so contacted Cllr. Clyde Loakes, Leader of the Council and Chair of the Local Strategic Partnership (LSP), seeking reassurance.

Cllr. Loakes told me that, yes, there was an underspend, but this had been anticipated, and a range of ‘substitute’ projects, approved by himself, were being prepared for immediate roll out, and would bring ‘benefit to local neighbourhoods’. Moreover, he told me, the administration of the programme had been significantly improved, so that monitoring processes were ‘much tighter now than in previous years’, and contracts were in place ‘which clearly link outputs and achievement to payment’. All in all, he pledged: ‘I assure you that I take this programme very seriously and have taken steps to ensure that the lessons learnt are implemented’ (e-mail, 8 March 2007).

Shortly afterwards, I discovered that the ‘substitute’ projects were aimed at producing ‘community cohesion’ across the borough, something that had little to do with the NRF programme’s aim of addressing deprivation in a target group of seriously afflicted wards, and so I again approached Cllr. Loakes for an explanation. As before, he emphasised his personal involvement, and left me with the impression that there was nothing to worry about: ‘In relation to Community Cohesion and given the increased activity recently in this area, the LSP endorsed a proposal to support work from the underspend…You will appreciate that the very nature of the projects and their utilisation of underspend funding warranted a quicker process than that for the longer-term projects which were agreed by the LSP at the beginning of the BNI programme. This process enables myself as Chair of the LSP to approve projects under delegated authority from the Executive Board and I only gave my approval following the production of appropriate paperwork for each project and detailed discussion with officers’ (e-mail, 16 April 2007).

Subsequently, I asked various questions about the Community Cohesion projects at regular intervals, but it was not until nearly a year and a half later that I found out the full truth of what had happened.

By that time, PricewaterhouseCoopers had appeared on the scene and started to examine the BNI files forensically. I have already described how it exposed a range of general failings, but as regards the Community Cohesion projects, the conclusions it reached were particularly bleak

To start with PwC clearly found even delimiting the Community Cohesion projects difficult, because none had its own designated file, and so the details had to be pieced together from information found in other files.

In the end, PwC concluded that NRF money had been used to pay for nine Community Cohesion projects, worth between £250,000 and £260,000 (tellingly no firm figure could be established). It had looked to ascertain whether the projects had been tendered, monitored and audited in line with LBWF standard policies, but found that in all nine cases evidence of any such activity was entirely missing. Such a finding was breathtaking, and clearly contradicted Loakes’ assurance to me that procedures had been tightened up. It appeared that LBWF departments and outside organisations alike had been given chunks of money and told to get on with it, with no effort made to check whether they delivered anything useful or not.

In addition, some of the projects threw up even more worrying questions. Project 74 was called ‘Cohesion Training for Head Teachers and Teaching Staff across LBWF Schools/Colleges’, a rather grand title for a project which in fact had delivered merely one event, a conference on 28 March 2007, at the Olympic Conference Suite, Leyton Orient. This by itself was hardly impressive, but it was the details that then emerged which were particularly startling. The objective had been to get 50 teachers to attend. It was established that Orient hired out the Olympic Suite for £600 plus VAT per day. Yet PwC confirmed that the amount paid out to the organiser of the event was no less than £24-26,000.

Project 32, confusingly named only ‘Community Cohesion’, was equally perplexing. PwC found it involved a payment of £66,011 to ‘Heaton Wilson Communications, P040 9QH’. However, when checked, the post code in question was found to be on the Isle of Wight. And when the person who lived at this address was traced, he admitted that he had done some work for the LBWF press office, though not on community cohesion, and not for anything like £66,011 – indeed the sum he claimed to have been paid was a mere £6,600. Asked to explain, the best that Council could do was to blame the messenger: ‘the discrepancy in the figures is down to a misplaced comma and an extra digit being recorded by accountants working for consultants PricewaterhouseCoopers’.

Finally, Project 74, named ‘One Community Campaign’, only added to the confusion. The basic facts were that it involved a payment of £34,000, and had been signed off by LBWF Head of Corporate Communications Kath Myers, an officer allegedly very close to the Labour leadership. The problem here was that the One Community Campaign had already run to completion in mid-2006, many months before the BNI underspend had been identified, and thus logically must have been supported by a much earlier budget allocation. And the possibility that the £34,000 was to allow the Campaign to run on could be completely ruled out, because Ms.Myers had also signed for project No.76, ‘Refocusing of One Community Campaign’, itself worth another £30,000.

All of this would have been almost comedic, but for the fact that so much public money was at stake. Jonathan Bunn at the Waltham Forest Guardian well captured the story’s essence, and included some further background and detail. His most comprehensive piece is here: