LBWF’s relationship with the local business sector: new revelations about the E11 BID Co.

I have written before about LBWF’s relationships with the local business sector, and pointed out that our council appears to treat certain businesses and business organisations rather more favourably than might be expected. Money is handed out, and assets handed over, but there seems to be no great urgency about due process. It is all very relaxed, even informal, and contrasts strikingly with the way that, for example, LBWF commonly interacts with the local community and charity sector (as I can vouchsafe).

Against this background, I have been looking again at the legal contracts that LBWF has signed with the E11 BID Co., specifically the Operating and Baseline agreements covering the first BID period, 2008-12, and then their almost identical successors for the second BID period, 2013-18.

The most interesting sections of these contracts, as will become clear, relate to monitoring and reporting.

For those new to the subject, the broad relationship between LBWF and the E11 BID Co. works as follows. LBWF has responsibility for collecting the annual BID levy from local traders (calculated as a percentage of rateable value); it then passes that on to the E11 BID Co.; and the E11 BID Co. spends the money as it chooses. In addition, LBWF is contractually required to deliver a package of baseline activities in the E11 BID area (referred to as ‘Standard Services’), covering matters such as highway maintenance, street lighting, street cleansing, and so on, pledging that these will be ‘at its own cost’, i.e. not paid for from the levy.

As will be immediately obvious, this is an unusual arrangement, and consequently the contracts involved contain quite elaborate safeguards. Responsibilities here are shared, and require that, amongst other things:

1. LBWF produces an ‘Annual Council Report to the BID Company’, covering such issues as the ‘effectiveness of the collection and enforcement of the BID levy’;

2. the E11 BID Co. produces an ‘Annual BID Company Report to the Council’, detailing inter alia (a) its receipts from levy payers and other sources, and (b) its total expenditure;

3. a joint Standard Services Review Panel meets at least twice yearly; and

4. the Standard Services are jointly reviewed annually.

All of this seems eminently sensible and proportionate. The levy payers can find out whether their money is being spent sensibly. Local taxpayers can reassure themselves that LBWF is providing the right level of ‘Standard Services’ but no more – in other words that there is no hidden subsidy. It is a set of arrangements that promises transparency, and thus accountability.

However, it now emerges that, whatever the contracts say, the reality has been very different.

By my calculation, since 2008, the two sides should have generated 16 annual reports, and eight reviews; and in addition be able to show that they have met at least 16 times.

So, using the Freedom of Information Act, I have asked a series of questions to discover whether all this activity actually occurred.

And guess what? The only thing that LBWF is able to produce by way of a response is the minutes of a single meeting in 2008 – in other words a mere one-fortieth of what on the basis of the contracts I could legitimately expect to see.

This is fairly astonishing stuff. LBWF has gone to the trouble of completing legally binding agreements with a ‘favoured partner’, but then completely ignored a very important part of their contents. Furthermore, by acting in this way, LBWF has badly let down local traders, who pay the levy, and local taxpayers, who one way or another finance the council. The promise of transparency and accountability is revealed as a total sham.

So what does LBWF say about this? Well, on 23 September 2015, I wrote to Chief Executive Martin Esom and asked for an explanation.

Despite his enormous salary, Mr. Esom does not deign to communicate with mere residents such as myself, and so the reply I have received is from Lucy Shomali, LBWF’s very recently appointed Director Regeneration and Growth. This reads as follows:

‘I am writing on behalf of the Chief Executive, Martin Esom, in response to your email of the 23rd September.

I refer to your…correspondence concerning the E11 BID Company, and the provision of the agreements between the Council and the BID Company. We note the provisions in the 2008 and 2013 agreements that you have highlighted.

In terms of monitoring the performance of our Standard Services in the E11 area, I would stress that rigorous contracts are in place across the Council, which set high performance standards for our contractors. The performance of the Standard Services, including highways maintenance and street cleansing services in the E11 area has constantly been to the standards and specifications set out in the relevant contracts.

The Council’s contract managers have met annually with the BID directors since its inception to monitor the progress of street cleansing services, and also have held informal dialogue throughout the year where any potential issues around performance can be raised and addressed.

The performance and progress of the BID was followed closely throughout this time by both the levy payers – to whom the E11 BID Company is directly accountable – and the Council, through progress meetings and on-going correspondence.

I would just also reiterate that the E11 BID Company is directly accountable to levy payers and not accountable via the local authority.

We are in ongoing discussions with the E11 BID regarding any further documentation or actions that are required on this matter and are content that performance reporting arrangements have been satisfactory during this time’.

So there you have it. When questioned in detail under the Freedom of Information Act, LBWF is forced to admit that, bar one early instance, it cannot show that any reporting and monitoring as required in its contracts with the E11 Bid Co. has occurred.

But when the freshly arrived Ms. Shomali is put on the spot about the same issue, she tells us not to worry, because she knows different – that monitoring and reporting have occurred, and moreover the results are very positive.

Who to believe?

All that can be said at this stage is that the truth will no doubt eventually out.

Related Posts

Mr. Fawaad Sheikh of the E11 BID Co.: the life and times of a local business leader

Private Eye reports the E11 BID Co.

The E11 BID Co. and its debts: the evidence

The E11 BID Co. and the re-ballot of 2012: was there full disclosure?

LBWF, the Local Authority Business Growth Initiative programmes, and the Waltham Forest Business Board, E11 Bid Co., and North London Ltd.