Will Waltham Forest Labour Group finally take proper action to deal with the Neighbourhood Renewal Fund scandal?

Over the last year or so I have become increasingly exasperated by the failure of the Labour Group Leadership on Waltham Forest Council to respond effectively to the widening concerns about how Neighbourhood Renewal Fund monies have been used in the Borough.

In February of last year, I asked a series of Parliamentary Questions about the concerns that were being raised: firstly about the use of money by EduAction who were at that time running the Borough’s education service, then to what extent Government Offices properly monitor the use of Neighbourhood Renewal Funds (checking the outcomes claimed) and whether the Government was satisfied with the work done by Dr Foster Intelligence for Waltham Forest (using central government monies), and finally about whether the Government Office for London was happy that money intended for five wards with high deprivation had been spent elsewhere.

These questions related to information passed to me from local residents that suggested that outcomes relating to non-existent children had been claimed in respect of the Youth at Risk programme, that £47,000 had been paid for a health needs assessment of the area that had not been reclaimed despite the organisation that provided the assessment acknowledging that the work concerned was inadequate and broke its own standards for accuracy, and that money had been diverted away from the areas targetted towards other pet projects.  The answers I received suggested that there was no formal process by which Government Offices checked whether the outcomes claimed for particular projects funded by them as the individual local authorities were the accountable bodies for the expenditure.  The Government Office confined itself to monitoring the progress of the local authority as a whole towards theoverall targets set.

I followed this up with a long series of requests to the Council under the Freedom of Information Act, as did local residents and others.  Eventually, the Council was goaded into action and published some of the findings of its own internal auditors and commissioned external reviews of some of its processes. 

These raised even more concerns – such as, the £6,000 received by one external contractor although £66,000 had been paid to him according to the documentation in the accounts.  Significantly, one of the external inquiries found that the documents about how individual decisions on payment of specific grants were made, by whom and the purpose for which the grants had been made were missing in a large number of cases.

In respect of a number of these issues, local residents have asked the police to investigate.

Now, the Council’s new Chief Executive has proposed a further and broader inquiry that will look at ALL of the Council’s procurement processes.  As the local newspaper says:

Documents reveal a systemic failure within the council to correctly allocate, administer and monitor Neighbourhood Renewal Fund spending since 2004.

A police investigation is currently conducted into allegations that EduAction, the company which used to manage education in the borough, used NRF money to boost profits.

The Better Neighbourhood Initiative (BNI) was launched in an attempt to target NRF more effectively, but it later emerged that many BNI contracts, totalling millions of pounds, did not follow rules to prevent fraud.

Throughout the developing scandal, the leadership of the Labour Group in Waltham Forest seems to have been hoping that the problem would simply go away.  Initially, they declared themselves confident that all decisions had been properly taken.  They resisted further investigations – so much so, that the traditional questions of “What did they know and when did they know it?” started to be asked.

At one stage, I received a phone message from one of them, noting that I was asking all these questions and inviting me to “resolve it within the Party”.  I am afraid there are wider public interest questions at stake here and these matters need to be seen to be resolved openly and transparently.

Now they have an opportunity: the Chief Executive has proposed a further inquiry (I assume this is not intended as another delaying tactic), so when they discuss his recommendation tomorrow night, they should acknowledge that things have gone seriously wrong, commit themselves to being totally open about who was responsible, and put in place all the necessary steps to restore public confidence.  Nothing less will be sufficient.

21 thoughts on “Will Waltham Forest Labour Group finally take proper action to deal with the Neighbourhood Renewal Fund scandal?”

  1. If only there were more people like you within the Labour Party! adly, this kind of nonsense happens throughout the UK.

  2. I would like to thank you for taking an interest in this particular issue.

    The people of Waltham Forest have not had a fair deal form the Local Authority, the primary schools have been short changed and in particular George Tomlinson Primary School who have a building out-of-date, illegal mobile classrooms, the school cannot deliver the full curriculum and more embarrassing do not have a library. What joke! The people who are behind all this mess should be suspended from the party and a full investigation should be conducted.

  3. I must really thank you for your personal concern about the worrying failures of governance within Waltham Forest and for resisting the temptation to join in what seem to be organised attempts that have been going on to sweep this whole sorry mess under the carpet and avoid acccountability.

  4. There are plenty of people like Lord Toby Harris in the Labour party, Matt. Lord Harris is putting poor children before well fed local politicians. That is admirable, not party political. Let’s hope the rest of his colleagues at Labour’s national level will now follow suit.

  5. You will have to excuse me if I sound sceptical, but I am one of the residents that has asked the questions, for years now, who has never received an answer about large or small sums of BNI money. This little group of residents have watched money disappear and have never received an account or a result. I am afraid to say in these comments above people do not realise how small the areas are for the BNI money, and that the school the gentleman names above is not in the 5 areas of the BNI funding stream. I live and have lived in one of these areas and it is a scandal that, our Council has cheated and lied to the residents of this small deprived area, and it is the same for the other 4. So if you are asking these questions, then I am glad But we will never get this money back, these residents will never see the benefit of this money. But the WF Olympics are ok out of it, a Borough wide scheme, but like many Borough wide schemes they benefitted from this money. Shame the people who really needed it, will not.

  6. This smacks to me of one of Caroline’s ‘well fed local politicians’ preening and self-aggrandizing now he has been put out to pasture in the House of Lords. He clearly hasn’t taken too much time or effort to acquaint himself with all the facts prefering to engage in smear (why else doesn’t he name the anonymous caller?) and deliberately trying to create the impression that illegality and fraud are being ‘covered up’ by the council. Not even the Tories in the council have suggested this, and have very honourably not sought to make undue political capital out of what everyone has acknowledged have been serious failings in the way that contracts have been tendered and monitored. But the problem is with the fact that procurement procedures have not been followed and contracts inadequately monitored, not that any actual fraud has occurred within the council. By acting in this manner, residents and Lord Toby Harris are perversely shifting the focus away from the very real inadequacies that have existed in this area and onto their own overblown conspiracy theories (“What did they know and when did they know it?”) Indeed the new chief executive’s report emphasises: “It is important for Members to note that this work (the detailed audit of BNI Initiative) has uncovered no evidence of fraud or corruption within the council at this time”
    At Full council on 24th July 2008 the minutes read as follows:

    The Leader of the Council apologised to the Council and local residents about the sloppy practices that had come to light in the application of the Council’s procurement policies and management of contracts as evidenced in the Interim Chief Executive’s report to Cabinet on 22nd July 2008.

    The Leader made clear his determination to address the issues raised in an open and transparent manner and to ensure that the agreed Action Plan is enforced. The Council’s Executive Directors will be personally responsible for the effectiveness of procurement within their directorates and all officers dealing with procurement and contract management will receive compulsory training.

    An external auditor will review the implementation of the new arrangements in six months time following which a further report will be presented to Cabinet.

    Councillor J. Macklin and Councillor M. Lewis also spoke on the item and highlighted the importance of sound practices in these vital areas.

    It seems to me that what Lord Toby Harris is calling for at the end of his diatribe happened 7 months ago and he just failed to notice. He clearly hasn’t read properly the chief executive’s report going to cabinet today or taken the time to understand exactly what has been happening on this issue for the last year. He seems to prefer believing he is some Bernstein/Woodward like figure exposing corruption fearlessly. He should grow up really.

  7. The parrot-cry of the Council PR machine – ‘it is important to emphasise that the inquiries have found no evidence of fraud’ – is hardly reassuring.

    Four of the investigations into the NRF/BNI fiasco were not charged with looking for fraud

    The two internal Corporate Audit and Anti-Fraud Team’s investigations certainly were, and it is true that one exonerated the Council, but we don’t know what the other one says, because it has never been released into the public domain.

    Anyway, all of this in some senses misses the point, because what we do know is that a programme worth millions of pounds, which might have made a great deal of difference to Waltham Forest’s poorest wards, has now been exposed as chronically mismanaged. To give some idea of the numbers involves, of the 105 Better Neighbourhoods Initiative projects which ran from 2006 to 2008, only three were procured according to the Council’s tendering rules; in more than half the cases no valid contracts were ever signed and exchanged; and auditing was virtually non-existent – meaning that what the expenditure achieved is anyone’s guess.

    As to the Council behaving ‘transparently’, that is someone’s pipe dream. It hasn’t. I’ve been researching these issues since 2003, and have regularly protested to Council officers and Lab-Lib politicians about how the programme was unfolding. For years, I met with indifference. Senior figures just ducked and dived. In a private e-mail of February 2008, which I obtained later under the FIA, ex-Interim Chief Executive Roger Taylor told Leader Clyde Loakes: ‘Mr. Tiratsoo is correct…in his complaint that I have not dealt with…[his correspondence] in timely manner…[and]… is also correct in saying that I have not fully answered his questions’. Even now, it is still impossible to get any sense out of the Council on several important issues – presumably because they are judged too ‘sensitive’ for those at the top.

    Indeed, if this story is gradually beginning to emerge in all its gory detail, this outcome probably has least to do with the Council itself.

    In short, Lord Harris has performed an important public service.

  8. Just one extract from the report evaluating the BNI:
    Relevant socio-economic data on the priority neighbourhoods, such as the Indices of Multiple Deprivation for 2004 and 2007, were not that helpful for determining impact as much of this data does not exist at an SOA level or, where it does, takes many months
    (or years) to be published. Much still refers to a period before the BNI team was established or at best to a period before any real BNI impact could be expected. This data was used well in developing Implementation Plans for the Priority Neighbourhoods. It was enhanced by the useful residents’ survey which was found to
    be helpful when used with service providers. However, this survey should have been conducted earlier and used far more in planning by the council and other service providers.
    Overall, the data from published sources and the survey reflects the mountain that has to be climbed to reduce deprivation and could also reflect the difficulties that LBWF faces because of the high level of transience of the local population. Judgements about BNI’s impact need a more detailed examination of qualitative information theme
    by theme.
    This more detailed examination suggests that the attainment theme’s projects did have an impact, particularly on the Not in Employment, Education, or Training (NEET) floor targets: the NEET’s percentage in Waltham Forest fell from 6.6% in January 2007 to 5.4% in January 2008, below the national average and below the 2008 stretch target of 5.6%. Project staff believe that this is, without question, attributable to BNI funding.
    On the other hand, the lack of attention to the links of schools to their neighbourhoods may have been detrimental to what was achieved, but more definitely has meant that schools in priority neighbourhoods have not contributed as much to neighbourhood
    renewal, and youth work in particular, as their potential to do so suggests.
    Our detailed evaluation of activity under BNI’s neighbourhood strand suggests that there have been a number of positive achievements in the priority neighbourhoods with the possible exception of Lea Bridge and Markhouse which has not had a neighbourhood manager for some time. However, the short term funding horizon of
    BNI, together with the late appointment of staff and the consequent pressure to spend in the first year has meant that many of the achievements are short term or will not be sustained without the ongoing presence of the Neighbourhood Manager/Coordinator.
    Nevertheless, successes were greater then suggested by monitoring data and the weakness in celebrating success had a negative impact on BNI’s work.’
    I do urge everyone to read the whole report as it criticises the council very harshly in places but also shows that such sweeping statements as “what the expenditure achieved is anyone’s guess” is factually inaccurate. You might also note that in the extract I didn’t select out only the bits supporting the council, but included the negative too. I do wish those like Nick Tiratsoo would be similarly balanced in their approach. There have been serious failings in the management of these contracts but that does not mean all of them become immediately useless and a complete waste of money. Could the money have been spent better. In some cases almost certainly yes, in some cases probably, in some cases, possibly and in yet more cases, almost certainly not. The programme has made a difference to these poorest wards and to suggest otherwise is misleading. Should the programme have been better managed? Yes. Has this mismanagement of contracts affected outcomes? Almost certainly. Does that mean we write off all the different initiatives that have been undertaken as misspent money? No, and it is possible to be critical and angry about the things that went wrong without ignoring the positive things that have been achieved within this initiative. Clive Stafford Smith, the human rights lawyer who has defended those on Death Row and those now in Guantanamo Bay was quoted in this week’s Observer as lamenting the left’s “tendency to complain” without focussing their energies also on something positive as well. He is dogged in his persistence on even more important issues than the one we are discussing, yet never loses sight that if your energy is always focussed on what is wrong with the world, you will never be helping to make it better. The BNI Programme was not perfect. It was very, very, very far from being perfect. But just one example, some people are in employment, education or training now that wouldn’t have been but for BNI. I can applaud that while still criticising the fact that council officers didn’t follow correct procurement procedures or monitor contracts adequately. Like Lord Harris, I am a member of the Labour party, but no, Nick, I am not a parrot for the council I am afraid. I am just someone who has read all the available public information and can see that while there has been an embarrassing lack of rigour in this area over several years, that hardly earns the use of such words or phrases as ‘scandal’ or ‘gory detail’. Where I suspect Nick Tiratsoo and Lord Harris have a point is that the council initially were very slow to react and probably were resistant at first to acknowledge the scale of the problem. But that can hardly be an accusation that can be levelled at them now. I find it hard to know what else the council could have done in the last 8 months to address these issues. If anyone has anything to add to their action plan, please share.


  9. Re the report you quote, it was put together by a consultant, and if you look at the sources used, you will see that it is for the most part based upon the opinions of those who were involved, in one way or another, in the provision of the programme. There is a yawning death of statistical evidence – unsurprising given the fact that there was all but no auditing of the programme.

    More generally, you seem to believe that I should be grateful that four years after I first alerted the Council to the major flaws in its neighbourhood progrmmes, and provided copious evidence, it investigated.

    Why should I be? What about all the money that was wasted betwix and between. And what about all the issues that remain unexplored?

  10. Posted on the local paper’s website:
    Redfox, Walthamstow says…
    11:28pm Tue 24 Feb 09
    I think we should start to ferret out the weasel who tried this cover-up.
    Senior labour councillor smacks of implying it was a cabinet councillor and by the process of elimination, being senior amongst those would suggest it is a straight choice between Messrs Sizer, the labour group eldest statesman so to speak, and Wheeler.
    Anyone got a lie detector machine?

    Ignoring the fact that Cllr Sizer isn’t even in the cabinet and hasn’t been for several years now, what comments like these demonstrate is that posts like the one Lord Harris has made here only serve to enflame the members of our community with a less than sure grip on reality, no doubt having watched too much bad drama on their TV and film screens. You can almost hear the panting pleasure as they feel they are getting closer to some great Watergate-like scandal that they can be at the centre of – about as far removed from the boring and mundane reality of local government as could be – this is a legitimate story that should embarrass a number of senior councillors and council officers, but a story about officers not keeping appropriate paperwork and failing to follow simple procurement procedures, and councillors failing to ensure that certain basic standards were adhered to, not some great conspiracy and cover up. My objection is not to the anger of residents and campaigners who are shocked at the inadequate management of BNI – indeed I share that anger – but to those who seem intent on going down this cul-de-sac of alleged conspiracies and cover ups that, as Mr Tiratsoo rightly points out, leaves people missing out on the central and important failings that have been discovered.

  11. Hi John,

    I think you need to make up your mind about who (if anyone) is at fault.

    The facts are as follows.

    (a) I first raised concerns about NRF in 2004 and 2005, and, after these were ignored or downplayed, wrote a long and damning report on one particular project, which I presented to the Leader and the Chief Executive in May 2006.

    (b) It took another two years for anything meaninful to be done, but by then the horses had largely bolted, in that further large sums had been shovelled out of the door without any controls.

    (c) I have evidence, a little of which I cite above, that LBWF has avoided answering my questions, or made statements to me that are frankly misleading.

    (d) There are several important issues – concerning Dr Foster Intelligence, the BNI ‘social cohesion’ projects, etc. – that remain outstanding, despite the fact that I have repeatedly brought them to the Council’s attention.

    (e) The situation is now judged serious enough for Harry Cohen MP and the local paper to call for a public inquiry, while the local Labour constituency party has also issued a sharply worded statement on similar (though not identical) lines.


    Is this the story of a local authority bravely facing up to its responsibilities?

    Or is it the story of a local authority seeking to engage in damage limitation, with the aim of protecting political and professional reputations?

    In short, has the administration added to, or detracted from, the reputation of the Labour Party?

  12. Hi Nick,
    There clearly has been faults at both officer and councillor level and that has been acknowledged and apologised for. I am not sure what purpose is achieved though in seeking scapegoats. It seems to me there was an ‘institutional’ problem in that officers clearly felt under no obligation to follow the council’s clearly laid out procedures for contracts and procurement. So although most of the contracts under discussion were strictly the responsibility of less senior officers, it would be grossly unfair to hang them out to dry, when their senior managers should have ensured there was a culture of strictly following these procedures within their directorates. And of course, while councillors can’t, indeed, shouldn’t be micro-managing contracts at this level, they do have a responsibility to ensure that not only are the correct procedures and rules in place (they were as far as I am aware) but also that they are being followed. That clearly didn’t happen and not enough questions were asked, especially considering the efforts you and others were putting into raising problems that were occurring.
    However, your final point e) shows that, probably fortunately for you, you are unaware of the internal politics within this particular constituency party, most of which have very little to do with policy or principle, but a lot to do with poisonous personal differences.
    I think that overall an administration that started in 2002 from a position of 0* from the audit commission and now has 4* (I believe the only council in the country to achieve this transformation) probably when judged as a whole could be regarded as adding to the reputation of the Labour Party – and this has been achieved while also having to coexist with an opposition party in joint administration, let’s not forget. But if you only look at this issue and forget everything else, then no, I suppose, then the picture is bleaker. But I refuse to take such a blinkered perspective, recognising that councillors and council officers are responsible for a great deal more than this BNI initiative. Considering the problems the council faced at this time many positive things have been achieved. Did they drop this particular ball – probably. Did they take too long acknowledging this – probably. Did they fail to take your concerns seriously enough and treat you as an annoying irritant – I suspect they did. Does this amount to ‘a scandal’ – only if there was proven evidence of widespread fraud and corruption or misuse of public funds. And I repeat, saying that money hasn’t been properly accounted for (as clearly has happened here) does not mean that it should be assumed it has all been misspent. The only allegation that I have heard the police are investigating is not with the council but Eduaction. Otherwise it is just another case of a bureaucracy working very slow and cumbersomely to change course and correct errors made in the past. Are they seeking to limit damage to the council’s reputation- of course they are, who wouldn’t? They have a legal responsibility I would have thought to do so. Are you seriously suggesting officers and councillors should be donning hairshirts, exclaiming ‘mea culpa, mea culpa..’? I had rather hoped we had moved on from these dark ages practices.

  13. Thank you so much for persuing the investigation into this matter. Many local people are totally exasperated with the Waltham Forest council and they way they tend to treat the local people. There is a culture of consultancy, PR spin but not listening to local people’s fears, concerns, wishes and ideas. I am grateful to all those involved in working hard to bring this to light.

  14. Hooray for the voice of reason amidst the insanity that is Clyde Loakes and Waltham Forest council. If only we had council leaders like Lord Harris in our wonderful borough.

  15. Thank you so much for your interest in this matter.I have lived here almost all my life and know what a difference even a small amount of money could have made. The people who live here are grateful to you for working hard to get this out in the open.

    We don’t blame “Labour” for what has gone on as we know it was the labour government who wanted this money to go to help the poorest neighbourhoods. We know labour MP Harry Cohen has refused to help brush this under the carpet and has written about the issue in his leaflets. We know it is local labour party people who have demanded any mis-spent money be returned to our area.(and been accused of ‘poisonous personal differences because they’ve been brave enough to try and act). But if the national labour party wishes to escape blame they need to act too.

    Any money spent on olympics, publicity or other vanity projects needs to be returned immediately and spent properly. It is too late now to save some of our young people who have been crually taken from us but we may be able to do something for the youngsters whose lives could still be turned around.

  16. Amanda: you are spot on.
    The sadness is that NRF was a very good idea.
    If the Council had worked in partnership with local people, small amounts of expenditure could have helped transform the poorer wards.
    Because it didnt, and because so much of the money was frittered away on consultants and/or projects that were fatally mismanaged, the opportunity for change has been wasted.
    Astonishingly (or perhaps not!), the Council does not track the impact of NRF in any systematic way, but there are staws in the wind. For example, when officers recently briefed a consultant in private, one made the following observation:
    ‘Criticism has come from neighbourhoods level [sic]: is the funding distributed fairly? Has the investment worked? Why does the Index of Multiple Deprivation between 2001, then 2004 and now 2007, show no improvement? In fact, number of SOAs in the Borough in the worst 10% in the country has gone up. Some have become relatively worse. Some Ward councillors have asked what the point of the programme is given this data’.
    That says it all, really.

  17. I must take issue with john’s statement that the internal politics of Leyton & Wanstead Constituency Labour Party “have very little to do with policy or principle, but a lot to do with poisonous personal differences.” I am a member of this Party.

    There are of course personal differences in politics, and if it were to be said of me that my interest in the BNI controversy is partly inspired by these I could not deny it. But I will not have this said of the authors of the BNI motion carried by my constituency party, who are sincere people who are simply concerned that money which ought to have been spent helping disadvantaged people in their own neighbourhoods has been misspent and that the Council has a moral duty to make amends.

    Neither is john’s statement justified in relation to the officers and members of my Constituency Labour Party as a whole. We have a strikingly pleasant atmosphere at most of our meetings and gatherings, because the good-natured majority have successfully resisted the attempts of the pedlars of poison to spoil things. We have a growing membership, and represent the best of Labour’s traditional values which must surely be the bedrock of a future Labour revival. Join us!

    As for john, if he is who I think he is, he is one of the people who attempted to poison the atmosphere of Leyton & Wanstead Labour Party and who have now mostly crawled off to some more congenial habitat. If he is really a member of the Labour Party, he will know who I am because I am using my real name. Perhaps john could throw away the mask of anonymity so that we can judge for ourselves his credentials for making this attack on us.

  18. Hello there John
    Dave is spot on, if you want a challenge then come out in the open. We do not mind if you are council leader C. Loakes who has helped this borough to gain a four star status. In reality is the council a four star borough? Are residents happy with this new achievement?

  19. Hi While searching for Blogs about legitimate government grants scams I found your site Waltham Forest Labour Group finally take proper action to deal with the Neighbourhood Renewal Fund scandal? – Lord Toby Harris. Thank you for the effort you have put in.

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