Published:

4 comments

One predictable theme that has emerged from the General Election campaign is that of a lack of public trust in politicians – or more generally of the “system” or the “establishment”. The Prime Minister has identified the failure to deliver on the EU referendum result as a significant cause. Logically enough, he proposes that the best remedy would be to “get Brexit done.” I’m sure that’s right. But it will not be enough. Destroying something tends to be much easier than repairing it. Even before 2016 there was already increasing dismay over public affairs – the MPs’ expenses scandal proved very damaging.

Amidst the minestrone of cynicism, what is the chance of winning back a crouton of goodwill? Transparency is the only answer. It has been applied to MPs’ expenses but also much more widely to public spending. Sir Eric Pickles, as Communities and Local Government Secretary, brought in rigorous measures to require local authorities to publish data about spending items, assets, and salaries of senior staff.

The principle has been to shift accountability from Quangos to local residents. The “armchair auditors” are being relied on to challenge municipal waste and corruption.

Therefore I was concerned to see that a recent investigation by the Bureau of Investigative Journalism has found that “local authorities are refusing to let the public access key information on how their money is being spent.”

It claims that councils are redacting documents to “protect commercial interests”, “setting up council-owned companies that are removed from scrutiny” and “failing to respond to members of the public who try to exercise their right to inspect council finances.”

Under the Local Audit and Accountability Act 2014, citizens and journalists have the right to inspect the accounts and related documents of councils, police, fire, and other local authorities “and to object to them if they believe something is amiss. It is an especially important right at a time when public bodies are under unprecedented financial pressure.”

But when the Bureau’s journalists and its volunteers “attempted to exercise that right, some authorities withheld or heavily redacted the information. There was often little evidence that the public interest had been considered and no way of challenging the decision short of a costly court battle.”

The Bureau says:

“In one case, the Bureau was prevented from reading a contract because a council officer believed the company involved would sue. Another council refused access to the accounts of a company it had set up to manage a large property portfolio, raising concerns about transparency and accountability.”

Duncan Hames, director of policy at Transparency International UK, said:

“It’s critical that the public and press are allowed access to key documents about the finances of local authorities to ensure there is no place to hide for the misuse of public money. The law is clear that this financial information should be out in the open, so it is imperative that those failing to comply do not continue to withhold it from public scrutiny.”

Various culprits are named and shamed:

Haringey council provided a contract they had with property developers but it was heavily redacted. This is permitted if the information is considered commercially sensitive. When asked for the redactions to be reconsidered, the council insisted there was no remit to do so under the Act.

West Sussex county council, which has tens of millions of pounds in investment properties, completely refused to release copies of contracts relating to property consultants for fear of prejudicing commercial interests.

Other councils asked the companies in question for permission before deciding to provide — or not provide — copies of invoices and contracts.

A council in the north of England provided a large number of invoices but declined to supply contracts because, its finance director explained, one of the companies had a history of taking legal action against local authorities and the council could not afford to be sued…

The Bureau submitted a request to inspect documents relating to property consultants used by Ashford council in Kent. In response, the authority said it did not own investment properties and so had not paid for any external advice. Instead it said that the properties in question, worth £27 million, were owned by A Better Choice for Property Ltd and that the company was not subject to the LAAA – even though it is entirely owned by the council.

The council later confirmed its company had used property consultants but would not disclose the fees because they were “commercially sensitive”.

Several local authorities — including Essex, Liverpool and Woking councils — simply ignored or failed to comply with requests to inspect their accounts…

Buckinghamshire county council provided a copy of a letter which showed it had contracted property consultants Carter Jonas to find and acquire investment opportunities on the authority’s behalf. The council later confirmed it had paid Carter Jonas £840,391 in relation to the purchase of investment properties, from 2017 to 2019…

Spelthorne borough council, which has borrowed £1 billion to spend on property investments, provided copies of contracts it has with the consultants Cushman and Wakefield. According to the documents, the company’s responsibilities included the “identification and procurement” of properties and “promoting Spelthorne borough council as the most credible buyer”.

Another invoice showed that the real estate agency Colliers International was paid almost £240,000 for its role in the £19.8 million purchase of a car park by Leeds city council in March this year. The decision to buy the car park was made under what is called “delegated authority”, meaning it was made by council officials behind closed doors.”

The good news is that the “government has announced an independent review into the transparency and quality of the financial information published by local authorities, which will focus specifically on the Local Audit and Accountability Act.”

Official obstruction must be tackled. Freedom of Information rules must be extended to quasi public sector bodies such as housing associations. Both councils and housing associations should be required to publish Fire Risk Assessments. What about extending the right of local audit inspections to NHS trusts?

Where people are interested in carrying out checks they will find the most shocking examples of how their money is being wasted – that was the experience in Lambeth.

Sunlight is the best disinfectant. I hope that the existing transparency rules will be enforced, that they will be extended, and that the public will be encouraged to exercise them.

4 comments for: Councils are obstructing “armchair auditors”

Leave a Reply

You must be logged in to post a comment.