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Mr. Livingstone: I was about to refer to the Bill when I moved on to my second item, which is the range of investigations which are currently under way. I have seen the auditor, the old district auditor, Price Waterhouse and the Metropolitan police fraud squad. I have written to the Director of Public Prosecutions. I have been all over the place, and written to the charity commissioners and Her Majesty's Customs and Excise, because VAT fraud is involved. At every stage, people have passed the matter on to somebody else, or said that if I had information, I should give it to somebody else.
I would like to see amendments to the Bill--I hope that they will be tabled in Committee--which will give the audit system total power to get stuck in to these matters. I have had endless correspondence with the DPP and the police, and both have said that they have looked at different parts of the matter. But we need someone who is able to look at the totality of corrupt practices in local government and someone who has enhanced powers to deal with the problem.
Nowhere is that more necessary than in the case of Brent council. I shall give a list of the present problems in Brent. Police investigations have taken place into Councillor Bill Duffin, former councillor Leslie Winters, former councillor Nkechi Amalu Johnson and former councillor Judith Harper. These investigations are on different matters. The ombudsman is investigating Councillor Duffin again, and Councillor David Tobert. The district auditor is investigating the council leader Councillor Blackman, and Councillors Cormach Moore-- the Conservative chief whip--Alan Wall, Jack Sayers and Richard Buckley. An internal council auditor is investigating Councillors Buckley, Blackman, Wall, Moore, Sayers and Carol Shaw.
This is nonsense. There should be one body or one individual to whom members of the public, councillors and Members of Parliament can go to make their complaints. Such an individual would be able to draw all the matters together and come to the right conclusions, because--at present--that is impossible. I estimate that I have spent an entire working week in the past 18 months in the company of Price Waterhouse, the district auditor and the fraud squad. How many members of the public can do that? How many councillors have that time?
I have been ably assisted by two diligent councillors from Brent, Steve Crabb and John Duffy, who have spent virtually their entire time on the council digging into the files. That is not going to happen in most areas, as most people do not have that sort of time. What we have discovered in all this is an endless series of multiple and overlapping examples of corruption.
I have referred to the case of Bill Duffin. Although the Metropolitan police fraud squad recommended prosecution to the Crown Prosecution Service, the CPS-- quite unwisely--decided not to proceed. Mr. Duffin was in the ridiculous position of being chair of the housing committee while working for a local landlord specialising in bed-and-breakfast accommodation. Mr. Duffin took his employer to meet officials without revealing who he was.
He did so to try to find out ways in which his employer could increase his take on housing benefit, a matter of immediate concern to the Government who are concerned about current housing benefit bills.
Fortunately, when the matter came to light--and despite the fact that the Crown Prosecution Service decided not to proceed against him--Mr. Duffin was removed from his position by the whole council. Individual Conservative councillors, to whom I pay my respects, voted to remove one of their colleagues because they felt that corruption had been sufficiently proved.
The most serious example of what has been going on-- I know that you will remember it from some Adjournment debates on the subject, Madam Deputy Speaker--is the Irish centre. This is the most distressing case, and the case on which I spent virtually all of my working week spread over 18 months with the auditors and the fraud squad. I was desperately trying to push everyone in the same direction so that we could reach a conclusion.
The simple facts of the case are that a council grant of
£231,000 was paid for building works to be done at the centre. Not all the works were done, and not all the money was spent. Three councillors--Councillors Wall, Moore and Sayers, to whom I have referred--sat on the management committee of the Irish centre. They were present when it was decided not to proceed with spending the grant for the purposes for which it was given-- namely, to provide access for disabled persons and changing rooms for actors, singers and dancers. Instead, it was decided to spend the money on building a bigger bar.
Those councillors felt no need to report that to the council. Instead they sat there and decided all sorts of other peculiar things. Although they were in receipt of public money they decided not to have a contract with a regular recognised builder, but to do a great big "on the lump" job, with people turning out day by day and being paid cash in hand without any real records or other checks.
I wrote to the leader, Councillor Blackman, asking what he intended to do about that, but I have never had a reply. Rather than trying to sort out what had been going on, Councillor Blackman had been trying to secure political support, and was prepared to pay out council tax payers' money for that purpose.
I have written to the present district auditor, and things are slowly trundling on. But we are talking about events that happened in 1992, 1993 and 1994, and I am still not in the happy position of being able to see a district auditor's report, because it is still being worked on.
Things are not yet as bad as in Westminster, which is the most serious case, but they are bad enough. We want a new set of powers to enable district auditors not only to proceed on such issues, but to move speedily, so that their investigations do not become almost historic. By the time the situation in Westminster involving Lady Porter is sorted out, she may well have died, in view of the length of time that it is taking. I see Conservative Members chuckling at that idea. Perhaps they are not fans of Lady Porter any more--although at the time they could not get enough of seeing her and advocating her cause.
What concerns me most is the length of time involved. Where there is a suspicion of fraud the issue should be resolved rapidly, so that even if the police decide that there is no case to take to court, and there will be no prosecution, the issue is resolved so that the public can
make up their own minds. Even if there is no question of simple illegality, the issue is whether things have gone beyond the bounds of what is considered broadly acceptable.
I shall not go through all the details, because they have been the subject of various Adjournment debates. However, the key to the issue is the fact that when people started to raise concerns about the Brent Irish centre, rather than resolve the matter, Councillor Blackman covered it all up. When members of the public wrote to him saying that there was a problem and that things were going wrong, his supporters on the management committee voted to expel the people who were raising the concerns.
People have often come to me and said that they are unhappy about something being done by a Labour council or a Labour councillor, and my first response is to say,
"Let me send the matter straight to the police. Let us call in the auditor." I do not have the resources to investigate such matters, and it seems bizarre that even with the new powers in the Bill there will be no real compulsion for a council leader to act decisively to bring matters forward. I hope that an amendment will be moved in Committee to give councillors a duty to go immediately to the appropriate authority, whether that be the auditor or the police, with any matter of concern. That duty should extend to Members of Parliament too.
The conclusion of the sorry tale of the Brent Irish centre is that while all that was going on, the 1994 elections hove into view. Brent would be a much sought-after jewel in the crown for either party. Brent elections always bring much welcome publicity for Front-Bench Members on both sides of the House, so it tends to be fairly bitterly contested. Clearly in 1994, with a hung council, that was going to be the case.
I have referred all the matters to the district auditor, but I am still waiting for him to resolve them. That is sad, but it is probably not his fault, but that of the present limited powers. As in Westminster, people have been tardy in agreeing to meet him, and it has been difficult to get responses from them.
In the run-up to the local elections, Councillor Blackman met the organiser of the Brent Irish centre privately, and on 17 March 1994 he agreed to give the centre another £70,000. Part of that money was to pay for the works that the council had already paid for, but which had not been carried out. I am not aware of any other example of a council paying twice a grant to do basic works, yet nobody raised a question. I would have expected the leader of the council to say, "Haven't we paid for this already squire?" But that does not seem to have crossed Councillor Blackman's mind. His only answer was, "How much do you want, and when can you take it?"
Another bizarre feature of the further £70,000 grant is that the application was too late. The council's cut-off date for new grant applications had passed, but an exception was made by Councillor Blackman and the deadline was overridden. What is more, when the grant was received the financial year had barely started. I often wait eight or 10 weeks for a reply from Brent council to a letter about a housing benefit case, yet here we have someone who asked for £70,000 in March and received it eight weeks later, with all the terms on which it was to be given changed without reference to a committee.
One aspect in particular depresses me, and we need to think about it in connection with the Bill. When I was in local government, as leader of the Greater London council, I could not move without a finance officer and a legal officer authorising every penny of expenditure by the council. If we wanted to spend money there had to be a report, and that report had to be seen by a lawyer. There had to be a concurrent report, and it had to have been seen by the treasurer, too.
Yet in Brent £70,000 was paid out, and the only monitoring was that the person who received it would tell the leader of the council what had happened to it. I am amazed that that is legal, and I hope that the Labour party will propose an amendment to the Bill to make it impossible. No council money should ever be spent until there has been an authorised report to a committee. I thought that that was already the law. Clearly there has been much damaging drift in the normal checks and balances in local government.
No sooner had Brent Irish centre received its £70,000 grant than an illegal leaflet--I have a copy of it here-- was circulated in the main Irish areas of Brent saying, basically "Vote Conservative and defeat the Labour candidates". Lo and behold, the largest swing to the Conservative party anywhere in England took place in the wards where that leaflet was circulated, and control of the council hangs on the casting vote of the mayor. That was not simply a question of financial corruption, and the leader of the council bribing a community group for support. The corruption may even have determined the outcome of the election, so the case is very serious.
That was another issue that I raised with the auditor and the police. The police were very helpful, and made a report to the Director of Public Prosecutions, and I got back a nice letter saying that it had not been possible to identify who was actually behind it all. The DPP should have an overall report about the totality of the events, rather than the police investigating the narrow issue of who produced an illegal leaflet while the auditors investigate where the £70,000 has gone.
There should be one overall unit. Calling it the district audit service is meaningless to the public; it should be called the anti-corruption unit--a much more popular title, which people would understand and which would clearly define its remit. If one person had been overseeing the whole matter there would have been a firmer response.
I wrote to all the individuals concerned and raised the matter with Ministers, saying that I was worried because everybody was looking at separate little bits of the jigsaw and no one could see the influence of the Mr. Big, Councillor Blackman, who had been pulling all the strings.
I wrote to the councillors concerned--the three councillors on the management committee and Councillor Blackman--asking them a series of detailed questions. I shall not go through them all now, because I do not want to stretch your patience, Madam Deputy Speaker, but there were three pages containing 13 questions in all. I asked questions such as whether they remembered agreeing the expenditure, whether they remembered seeing the monitoring report, why they had not pointed out the discrepancy to council officers, and whether they had told the leader of the council. I also wrote asking the leader of the council what he had done about it all. Silence. Not a peep.
In any new powers for the district auditor we should make certain that the power of prevarication is removed from corrupt officials, Members of Parliament and councillors. I want there to be somebody who can say,
"I want those people in today," and they will come in-- and if they do not, the police will feel their collars and bring them in.
The most obvious example is the delay by many members of Westminster council who wasted the district auditor's time month after month by finding reasons not to meet him. It is outrageous. We would not normally tolerate that. When people commit serious crimes, the police pick up them up and bring them in. Councillors should be grateful that they are invited in to meet the district auditor. Councillors should not have the right to negotiate about when they should meet the district auditor.
I have a letter from the Department of the Environment raising those issues. It says:
I have a letter from the Treasury Chambers. Customs and Excise had discovered that a lot of money had disappeared and there were irregularities. I asked for a meeting with Customs and Excise to find out where the money had gone. The letter said that, under its rules, Customs and Excise cannot discuss individual issues. That is fair enough in protecting the ordinary taxpayer or honest business from political intervention. However, when VAT fraud by Mr. Brendan Mulkere is part of an overall pattern of corruption, it should come within the district auditor's remit, which should not be narrowly defined.
I also have a letter from the Crown Prosecution Service about the leaflet, a copy of which I have here if anyone wishes to see it. The letter says that the CPS has decided not to proceed.
I did not, in the first instance, write to the chairman of the Conservative party but a resident in Brent did. That resident had been aware of what was going on with the fraud on the council and wrote to a Mr. Hanley, whom I assume to be the Minister of State, Foreign and Commonwealth Office, the right hon. Member for Richmond and Barnes (Mr. Hanley), on 15 March 1995 detailing £137,000 of grant that was being imaginatively recycled and a whole range of other problems. I shall not mention the constituent's name in case that person does not wish to be pestered by the media.
The reply was a letter from Tim Rycroft, special adviser to the party chairman, dated 22 March which said:
If I get a letter from a member of the public saying that there is corruption on the local council, I do not pass it to the Labour party and say, "Get a leaflet up about this." I send it on to the police. Why did not the right hon.
Member for Richmond and Barnes pass all the allegations, which were clearly overwhelmingly about Labour councils, to the police immediately instead of holding them back for party advantage?
The letter concludes:
This Mr. Rycroft was not even aware that he was talking about a Conservative council. He just thought,
"It's another Labour council, let's bang out a leaflet." That is a complete negation of the responsibility of the right hon. Member for Richmond and Barnes to the law to pass damaging matters that have been communicated to him immediately to the proper authority.
Finally, I thank the House for having tolerated me. There is one last matter of interest, which I have also raised before: the role of the leader of the council, Councillor Blackman. By one of those accidental miracles that occasionally bring joy to politicians, Councillor Blackman asked if he could have a larger computer. It is right that councils should provide leaders of councils, and the leaders of the opposition groups on councils, with proper computer facilities so that they can conduct their business. No one objects to that.
At the same time the leader of the Labour group asked if his computer could be upgraded. One weekend, council officers came in, unaware that there might be a problem, and gave Councillor Blackman a new computer. His old one was so much bigger than the Labour group leader's computer that they decided that rather than waste the taxpayer's money--and I applaud that--they would give the old computer to the leader of the Labour group. It never occurred to them that anything dodgy was happening in the council, so they did not think that there was any point in deleting the files of leader of the council before passing the computer to the leader of the Labour group.
No one noticed anything for ages until someone touched the wrong key on the computer and a whole wad of the previous correspondence of Councillor Blackman suddenly spewed forth in great detail. I will not embarrass the Government by repeating that correspondence. Broadly, it was what you would expect: the leader of the council writing to the Secretary of State for the Environment and officials in No. 10 Downing street asking them to rig the rate support grant settlement because there might be a by-election in Brent and they did not want to lose the council. That is rather tasteless but it is not illegal, as I am the first to admit.
What was found afterwards was much more sinister-- the transcript of a private conversation that a Labour councillor had held in his own home with a member of the public who had come to see him about the corruption at the Irish centre. It is clear that the leader of the council in Brent was worried that Councillors Duffy and Crabb-- the people I worked with to expose this stuff--were getting close to exposing the corruption of Brent council and his corrupt use of council funds to bribe the electorate through the £70,000 paid to the Irish centre.
Councillor Blackman was involved--I cannot say that he originated it but he was certainly in receipt of what resulted from it--in sending someone to interview
Councillor Duffy. That person was wired up to make a clandestine recording, went to Councillor Duffy's house, had a long conversation and passed the tape recording to the leader of the council in Brent, who then no doubt used council staff to transcribe it on to his computer. Councillor Blackman then started a whispering campaign saying that Councillor Duffy might be sued about what he had said at the meeting.
I do not know about other hon. Members, but I find it hard to believe that any hon. Member would resort to wiring up members of the public to bug conversations in the homes of opponents. It is certainly not lawful to use council resources to transcribe, circulate and use such transcriptions.
I wrote immediately to Councillor Blackman asking for some justification. I have never had a reply. I am not normally one to invoke the Evening Standard in my defence, but it took up the matter up very well and ran a headline that stated:
After a long story, the article concluded:
I do not believe that corruption is a party issue. What has happened in Brent is that the corruption that people got away with in the last Labour council emboldened others to think that they could do the same. When that happens, people join the party to line their pockets. That has happened in my local party.
A local property developer who saw what was happening in Brent joined the local Labour party, signed up all his employees as members of the local branch, took it over and got two cronies selected to stand for the council. He then employed two Conservative councillors, and perhaps even a Liberal, and got them all on the planning committee so that he controlled it. In the time that he was effectively in control of the planning committee, 100 separate planning applications which the council officers had recommended against were granted. That caused some concern in the area.
That is why I say give us a district auditor with real powers, who can strike fear into the hearts of corrupt people in whatever party, and give him the powers so that those who abuse their public position cannot hide behind delaying techniques, such as the use of legal advice and so on, to avoid being held to account. Give the district auditor powers to seize documents and meet people immediately so that such matters can be dealt with in the financial year in which they take place, not after the books have been closed some years on down the road. Let us create an audit system with real powers which will mean that corrupt people will lie awake in their beds at night thinking that they may not get away with it.
"Ministers have no general powers to intervene."
"Thank you for your letter of 15th March 1995 on the subject of the London Borough of Brent. The Chairman has read it with interest"--
he did not do anything about it though--
"and asked me to thank you for taking the trouble to send it to him.
Since the Chairman raised the issue of waste, bureaucracy, mismanagement and corruption in Labour-controlled councils we have received a great many letters on this subject. All are passed to our Research Department who will consider how we might use the information you have given us in our campaign."
"Although our priority during this local government election campaign remains the promotion of the positive case for voting Conservative, we do intend to continue to expose the lamentable record of our political opponents in local government. Your letter will help us to do so."
"Computer secrets land Tories in rigging row".
That is an honest assessment of the situation.
"Mr. Blackman was not available for comment today."
Nor was he the day after or any other day since. Councillor Blackman has never once explained anything relating to the grants, the bugging of Labour councillors or his attempt to suppress the debate on the Ad Shop report.
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