Use your rights: The People’s Audit sheds light on council finances

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Posted in Transparency, WhatDoTheyKnow, WhatDoTheyKnow (only)

What can you do if you suspect your local council of financial misconduct?

One solution is to take a good hard look at their books; and thanks to the Local Audit and Accountability Act we all have the right to do just that for a set 30-day period each year.

The People’s Audit is a volunteer-run network of people who are keen to raise awareness of these little-known rights, in the belief that local government spending should be open and accountable to local people.

At the same time, they’re using the Act to good effect themselves, as they probe into spending anomalies in their own borough of Lambeth. They’ve found that the Freedom of Information Act has proved a useful complement to their auditing activity.

Investigating financial misconduct

We spoke to Ben Rymer from The People’s Audit to find out more. What exactly have they uncovered to date?

“Perhaps the most worrying finding was around the Fenwick Estate regeneration project in Clapham. The chosen supplier was almost £6 million more expensive than some others who tendered. This is a massive red flag as the likelihood of this sum being accounted for by quality of work alone is slim.”

There’s plenty more: Ben says they’ve made concerning findings around public housing, procurement and contract management and how major works are overseen, from possible price fixing between contractors to payments for work that was never done.

For example, the group say that a sampling of some of the housing blocks on the Wyvil Estate in Vauxhall indicates that the council paid its contractors for more than twice the number of repairs that were actually carried out.

They also claim to have found evidence of land in Kenningham and Streatham being sold to a private developer at a discount of at least £1m, without any competitive tender.

And another major finding was that costs for Lambeth’s new town hall — originally flagged as a money-saver for residents — have overrun by more than £50 million.

Two Acts working together

So, some substantial discoveries. Where does Freedom of Information come into the picture?

Ben says that the two Acts can be used together, to good effect. “The Local Audit Act requires access to be given to documents relating to costs incurred by the council in the preceding financial year. Once these have been obtained, FOI requests can then be targeted more precisely using the insights gained from such documents.”

But there is a slight snag: with the Local Audit Act offering access only within a specific period of 30 days each year, the FOI Act’s prescription that a response must arrive within ‘up to 20 working days’ does not allow for much wiggle room, especially if the FOI response generates more questions that might be answered through scrutiny of the accounts.

Ben says that unfortunately, responses to both Acts are often delayed, refused on the grounds that they would take too long (despite similar requests to other councils being processed without an issue) or just ignored. “An extreme example is our attempt to obtain the original budget for Lambeth’s new town hall, which we have now been trying to get hold of for 18 months!”.

But all of this notwithstanding, WhatDoTheyKnow has been a useful tool for the FOI side of the People’s Audit’s investigations: “It is an easy way to organise FOI requests, and the fact that it’s all in public means that other people can use the information in the responses — though we do also submit requests directly to the council.”

“One notable success was when one of the team received some emails via WhatDoTheyKnow following the audit inspection period in 2015 which showed that the council had agreed to install gyms in libraries months before any public consultation on the idea.”

Making change

So, the group have uncovered plenty of concerning information — but have they actually made a difference?

Ben says that they’ve achieved a good amount of local and national press attention. More importantly, they’ve seen an increased focus on financial issues among the people of Lambeth, especially in the run-up to the local elections in the spring. “Given that we are all volunteers with day jobs and families we think this is a pretty good result!”

And they believe that there’s been some effect within their local authority too, although not as wholehearted as they would have liked. “They have published their responses to citizen audit requests and are making more positive noises about the importance of transparency.

“However, they are also imposing arbitrary limits on the amount of information which citizens can request and have put in place ‘guidance’ around requests which we think may be intended to discourage further requests.”

Your turn?

If the Local Audit and Accountability Act is new to you, you may be wondering whether you should be using it yourself. The People’s Audit think you should consider it:

“Local Government financial scrutiny is really important and these powers need to be used to their fullest to prevent wasteful spending or corruption. Many people don’t realise that councils are often £1bn+ organisations, or that UK councils spend a total of over £92bn a year. Yet since the Audit Commission was abolished there is very little scrutiny of this spend.

“Many local newspapers have closed in recent years so citizen audits and hyperlocal publications have become more important.

“The powers are hugely underused currently. However what we’ve hopefully shown is that a group of committed individuals can use them to good effect.”

If you’d like to do the same, find out more on the People’s Audit website.

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Image: Mark Longair (CC by-sa/2.0)

7 Comments

  1. I read with interest your piece on taxpayers using the Local Audit and Accountability Act. Lambeth Council is committed to transparency in all our work and financial management, and welcome interest & inquiries from residents.

    We’re always striving to increase transparency in council business and we work hard with residents to achieve this – at all times, but particularly through the Local Audit and Accountability Act. For example, our staff spent 170 hours responding to 52 queries made during the 30-day period this year and, last year, they dealt with a total of 172 queries. We’ve also published full details of these [http://love.lambeth.gov.uk/lambeth-publishes-responses-voters-inquiries-councils-accounts/] alongside our wider Transparency and Open Data disclosures [https://www.lambeth.gov.uk/elections-and-council/transparency-and-open-data].

    However, it’s also important to point out that, while the council publishes all of the information requested for under the auditing process, our critics don’t always share that commitment to transparency. The ‘People’s Audit’ don’t always publish the full responses to their inquiries – including the independent, external auditor’s letter rejecting 18 of a total of 20 issues raised by this group last year.

    The ‘People’s Audit’ have also failed to correct misleading claims, even when they have been proven to be wrong; notably their incorrect claim that the number of senior managers employed by Lambeth had increased by 377. The ‘People’s Audit’ have repeatedly been told that the increase was made up of pay increases for over 400 teachers employed in schools for whom the council provides the payroll administration; however, they have refused to correct the figures and continue to use them without correction.

    The article laments the closure of local newspapers and says citizen audits have become more important.  Transparency and citizen scrutiny are important, media outlets are governed by their own code of conduct that ensures that highest possible professional standards are maintained.  Citizen audits that fail to correct inaccuracies or publish distorted information for political gain further malign the audit process, to the detriment of public confidence.

    Your own piece repeats the incorrect claim that “costs for Lambeth’s new town hall … have overrun by more than £50 million”. This is based on a fundamental misreading of the figures: it confuses the £68m combined cost of refurbishing of the Town Hall and the construction of a new civic centre, with the £104m budget for the entire project – which includes additional benefits such as new housing. This mistake has been pointed out repeatedly to the ‘People’s Audit’, and an explanation of the figures has been published [https://www.lambeth.gov.uk/sites/default/files/ec-your-new-town-hall-ynth-scheme-key-facts.pdf], but the organisation continues to make this incorrect claim.

    All our residents have a role to play in a process of improving transparency for everyone – rather than simply using audit as an opportunity to attack the council – and that includes the ‘People’s Audit’. We have demonstrated our commitment to disclosure but, in the interests of true transparency, it’s not unreasonable to expect those demanding higher standards from us to play by the same rules.

    Cllr Andy Wilson

    Cabinet Member for Finance

    London Borough of Lambeth

    • Sadly, Lambeth Council construes as “attack” anything that calls council data or procedure into question, and then slings mud accordingly. You were present at the People’s Audit debate where you colleague continually referred to TPA being a “Green front” – following the lead of your former colleague Imogen Walker – regardless of evidence to the contrary. Post-that, and after the election, the same colleague referred to the fact that some TPA members had stood as Green candidates as providing proof of his original assertion, blind to the fact that this happened BECAUSE of what TPA revealed – that is, they stood AFTER the original People’s Audit debate.

      With such a seemingly parlous grasp on fact, are you surprised that people have a hard time taking Lambeth Council – and many other local authorities, sadly – at their word.

    • Cllr Wilson
      Appreciate you taking the time to reply.

      You say that your administration is “always trying to increase transparency in Council business”. However, this seems to be at odds with the recent direction of travel. Typical examples of would include:

      – Council meetings are now often scheduled at times which make it hard or impossible for working people to attend.

      – The Council has refused to release the guidance it claims to have received from the Met police indicating an increased terrorist threat which led to a huge wall being erected around the site of the recent Lambeth Country Show, and refuses to say how money raised by recent major events in Lambeth’s parks is to be spent.

      – Most relevantly for the People’s Audit, the Council still refuses to release the original budget for the New Town Hall project.

      While you quote the amount of time spent by officers in collecting and collating answers to the Peoples Audit questions, you do not mention the enormous potential benefits to the Council of the insights gained by the People’s Audit. At a time of central government cuts to local Government, many millions of pounds could be saved by each year by incorporating the findings of any or all of our reports. It is incorrect to say that the council publishes all of the information requested. This is part of the problem – the majority of information we ask for is withheld.

      As we have previously highlighted to Lambeth, the majority of the questions raised by our reports need to be answered by Lambeth council, not the external auditors, KPMG. As we stated in an open letter over a year ago “For you to suggest that KPMG’s response (whatever it might be) will satisfy our concerns is to completely mis-understand the nature of the auditor’s remit and the nature of the problem….The principle problem that our report has identified is the extensive financial mis-management within the council. This issue falls outside the external auditor’s remit. The majority of the questions that the report poses need to be answered by Lambeth council, not KPMG.” (https://twitter.com/PeoplesAudit/status/887972805110882304)
      Notwithstanding this, it is worth remembering that KPMG were responsible for auditing FIFA, Carillion, HBOS and Northamptonshire County Council and were singled out by the Financial Reporting Council (FRC) earlier this year due to a deterioration in the the quality of its audit work (https://www.theguardian.com/business/2018/jun/18/kpmg-singled-out-in-critical-report-on-audit-industry).

      I would add that the People’s Audit doesn’t have a problem per se with publishing the external auditor’s responses to us, but it wouldn’t be at the top of our priority list. We did explain to Lambeth that it could be moved up the priority list if they released information we have been requesting for months and answered some of our questions. However, this suggestion was refused.

      With regard to failing to correct misleading claims, your assertions are quite typical of the council’s attitude to any criticism. Of the 61 pages of our reports, the council chooses to home in on the 1 page where they think they might have a case, ignoring the other 60 pages of evidence of financial mis-management.

      You describe your concerns regarding the veracity of our work. If someone within Lambeth can provide evidence that our reports are wrong we would happily correct them. With regard to our report on staff costs, Lambeth have stated that the rise of over 400 senior staff is almost exclusively due to teachers receiving a pay rise rather than recruitment of new council staff. This claim would mean that there has been a 595% increase in the number of senior teachers in the last 10 years. It is not unreasonable to be sceptical of such a claim. When we asked for the data that backs up this assertion Lambeth were unable to provide it. We have asked further questions on this subject but Lambeth have been withholding the information that we requested

      You also express concern that “[c]itizen audits that fail to correct inaccuracies or publish distorted information for political gain further malign the audit process, to the detriment of public confidence”. As stated above we will of course correct errors if they are found. However, we can’t amend anything until we have verifiable evidence, which you have failed to provide. If you are serious about correcting errors then perhaps Lambeth Labour would like to apologise for the smear that they have been propagating that the People’s Audit is a front for the Green Party. We offered to provide evidence of this in an open letter dated 20th July 2017 to former Council Finance Lead Cllr Imogen Walker: https://twitter.com/PeoplesAudit/status/887972805110882304
      Nobody took us up on this offer. Instead Lambeth continues to peddle the line that the People’s Audit is a front group as it helps to divert attention from the serious charges made in our reports.

      All People’s Audit work is fully referenced throughout, and our network contains experienced professionals from a range of relevant professional areas. We do not publish our reports for political gain. Lambeth seem to be unable to comprehend that a group of citizens (of different political affiliations and none) have come together out of a shared concern about the financial decisions that the council has been making, many of which (such as demolition of estates and closure of libraries) make no financial sense. Any political affiliation of our members is set out on our website (http://www.thepeoplesaudit.info/about-2/).

      You describe a “fundamental misreading” of the figures around the new Town Hall. There is no misreading on our part. The council always sold the new town hall to the public as costing £50 million: http://futurebrixton.org/ynth/about/. However, since the early days of the project the Council has both downplayed the level of spend on the project and resisted calls for clarity regarding its true cost. In fact, initial estimates of the cost of a new town hall were in the range of £25m-£30m, less than a third of the current estimated cost of £104m, and just over half the £50m cost the Council used until just a few months ago. http://www.brixtonblog.com/30m-lambeth-town-hall-plans-for-brixton-blasted-as-vanity-project/5885).

      While strictly speaking it is true that, as you say, “an explanation of the figures has been published”, the “explanation” is wholly inadequate and gives almost no further detail or information than had not been released previously. After two years of trying, Lambeth still refuse to release the project’s original budget to the People’s Audit.

      The above shows that, while we remain committed to working with your team and the wider administration to bring about greater transparency and achieve the financial efficiencies we all want to see, there is a long way to go before we reach these goals.

  2. Lambeth Council is the least transparent organisation I have ever come across in my 45 years of adult life. It either refuses to respond or gives circular, vague and/or highly misleading information when pressed and its financial practices are appallingly bad.
    Even using Freedom of Information requests does not help. Nearly always late in replying and, on one occasion last year after 18 months of prevarication and false supply of information requested, the Information Commissioner expressed serious frustration at Lambeth Council’s failure to comply with the law by evasion and delay.
    Examples include its very close relationship with a small handful of large construction companies to which it gives ALL its maintenance and repair work without any tendering . This is a system that several independent experts have said is wasteful and inappropriate and which leaseholders across Lambeth have universally complained about as providing poor service and very bad value for money. In response, Lambeth Council inveigled a small group of residents to endorse its only real candidate as its own ‘independent expert’ whose tame report flew in the face of all the evidence to congratulate them. This is the sort of manipulation which is rife in Lambeth.
    It is time for central government to appoint commissioners to investigate the mismanagement and dubious financial transactions that are occurring daily.

  3. Greed and corruption are rife, anywhere you look!
    I worked as a construction planner and KNOW some of the scams being carried out.
    I live in Luton too and don’t believe all is above board in the town hall.
    (We were told we had won a school tender but about two weeks later a local builder, Neville, were appointed. I later discovered that Neville had representation on the council. They also, coincidentally, built most of the student accomodation in the town.
    In London, a housing association offered us a contract, IF their Project Director’s friend, one of our quantity surveyors, was made the Account Manager.
    This wish was granted and I later discovered that the Project Director had another friend who ran a number of sub-contract trade packages who, unsurprisingly, were involved with most of their projects.
    Of course, once this set up was in place, then materials were purchased from other “friends”, at exhorbitant prices, far in excess of exactly the same materials from competitors.
    I believe that corruption has taken a strong hold up and down the country in town halls and private connections.
    Why is little to nothing done to tackle the “black economy”, which is costing this country £billions?
    I have been in discussion with LBC since June about an unlicensed breakers yard at the end of our street, in a densely populated residential area. It is STILL “under investigation”!
    In my opinion, ALL local authorities need to be thoroughly investigated!