Agenda item

This report sets out the outcome of an investigation by Deloitte into the Earls Court Regeneration Scheme.

The Chairman moved that this item, which had been circulated after the main agenda, be heard first. He said that he hoped to hold discussion of the report in open forum, but that if the Committee wished to discuss individuals named in the report by name, excluding the press and public would be necessary.

Derek Myers, Chief Executive, said that he was happy to be named in the discussions, and that the decision to redact personal details was the decision of Deloitte, who had been appointed to undertake an investigation. He said that Deloitte had been commissioned, further to a complaint made to the police by Jonathan Rosenberg, to investigate allegations of a “movers list”. They were asked to assess whether any conduct by Council officers had been inappropriate and should lead to criminal or disciplinary investigation. He said that, in his opinion, the report offered assurance as to the probity of officers’ conduct, and that no further investigation was necessary.

Mike Clarkson, Deloitte, confirmed that Deloitte had insisted on the report being redacted, due to the requirements of data protection legislation.

Councillor Iggulden asked what experience of investigation the Deloitte investigators had. Mr Clarkson said that he was the managing partner of the public sector internal audit and anti-fraud investigation team, and had considerable experience of investigation work. His colleagues also had many years of investigative experience.

Councillor Cartwright said that he did not have an issue with the redaction of personal details, but was concerned by the late distribution of the redacted version. Mr Myers said that both versions of the report were distributed within 24 hours of their receipt. He said that the view of the Chairman and Vice-Chairman of the Committee was that the report should be considered as soon as possible.

Councillor Cartwright said that he had three concerns with the way the investigations had been conducted. Firstly, he felt that an investigation of computer records should have been conducted, and did not believe that a search of e-mails was inappropriately onerous. Secondly, that there was no investigation of officers’ qualifications, meaning that their ability to understand the potential illegality of their own actions was not tested. Thirdly, that there was no statement of truth by witnesses, as was common in tribunal investigations, though he acknowledged that Deloitte and the Council did not have police powers. Finally, he added that the suggestion put forward that a further investigation did not need to interview all tenants and residents, only those who had been listed on the database.

He concluded by stating that, in relation to the comments made in 5.9 of the report, local government officers should expect scrutiny when allegations of this nature were made.

Mr. Clarkson said that there was balance between cost and effort, and there would have been a very significant cost to an investigation of e-mail records. Deloitte’s approach had been to attempt to identify incidents that would act as a gateway to a wider and deeper investigation; their investigation had not identified any such incidents. As for the qualifications of the staff involved, Mr Clarkson said that the Council had a recruitment policy, which had been followed; further investigation would be outside the terms of the terms of reference. As regards statements of truth, the majority of statements had been digitally recorded.

Mr. Myers, referring to para 5.9 of his report, said that the allegations were of criminal conduct by officers, and could not be considered part of normal scrutiny. He said that an investigation that continues for an indefinite period without proper cause was not appropriate.

Councillor Iggulden noted that if emails were sent they would have been received by someone and no such e-mails had been produced to support the original allegation. Councillor Cartwright clarified that internal e-mails were those most in need of examination.

Eugenie White asked what the consequences of the allegations would be if true, both for the officers accused and the Council’s policy. Mr. Myers said that the issue was complicated, but that if the accusations had been substantiated, the matter would have very likely prompted both criminal and disciplinary investigation. He said that the allegations had arisen in the context of consultation on the future of the West Kensington and Gibbs Green estates. The Council had a statutory duty to consult its tenants, but it was not obliged to hold a ballot, and it had not held a ballot. He said that had the Council held a ballot, he could imagine why officers would have an incentive to offer residents preferable treatment for support. In the absence of a ballot, there was no comparable motivation. Further, he noted that Deloitte’s analysis of the consultation responses, which compared responses to the consultation amongst those marked as “Seagrave Road” on the Council’s database, showed a proportion of those residents as having objected to the proposals.

Councillor Ginn asked whether any evidence had been found that this list represented an early movers list. Mr. Clarkson said that while there was matching data between the hand written note and the information held within the overall consultation database, no evidence had been found that this constituted an early movers list.

Councillor Cartwright asked about the consultation meeting referred to in the report, where one slide had appeared to hold out the promise of early movement. He asked whether it was normal for no minutes to be kept of such meetings. Mr. Clarkson said that practices and standards varied, but that it was not unusual for no minutes to be kept, in Hammersmith and Fulham and at other authorities.

Councillor Iggulden said that residents had a clear incentive to move to Seagrave Road, but that the existence of a movers list had not been proven. He said that given that records had not been kept and the officers had denied any wrongdoing, it was unlikely that any evidence could be provided. Councillor Cartwright said that there was circumstantial evidence, and evidence that an individual resident believed themselves to be on the list.

The Chairman said that he was concerned that further investigation would be in the cause of proving a negative, in the absence of a “smoking gun”. He said that the findings would be referred to the police, who had powers to interview under caution if they believed it necessary.

Councillor Murphy said that the decision not to examine computer records appeared to use a circular logic. He said that he believed that an examination of those records should have been a first step, and that Deloitte appeared to overestimate the onerousness of such an exercise.

Mr. Clarkson said that Deloitte had checked that the e-mails were secure, but had not found a gateway to explore a specific element of that e-mail.

Councillor Murphy said that the approach seemed to be seeking paper evidence when an e-mail was much more likely to contain material substantiating the allegations, if they were true. He asked whether, in light of the promises made in the slide presentation and Deloitte’s acknowledgement of the perception amongst residents that a movers list existed, Deloitte ascribed this to incompetence on the part of the officers or as an inducement to residents.

Mr. Clarkson said that the slides were contradictory, and that, given that Seagrave Road was not originally included in the scheme, there was no evidence to support it being offered as an inducement.

Councillor Murphy asked if there was evidence that it had not.

Mr. Clarkson said that no evidence supporting the allegation that early moves to Seagrave Road had been offered as an inducement had been put forward during the interviews undertaken by Deloitte.

Councillor Murphy asked about the e-mail sent to an officer that had mentioned an early movers list. He said that the officer’s reply had not refuted its existence.

Mr Clarkson said that he disputed that interpretation, stating that the officer had made a general refutation of the e-mail.

Councillor Murphy asked why the Council had approached former officers on behalf of Deloitte, rather than Deloitte approaching them directly. Mr. Clarkson said that it was standard practice, and used to save time and assure those under investigation of the Council’s involvement.

Councillor Murphy asked whether it was standard practice for a group of officers to submit a joint report to investigators.

Mr. Clarkson said that it had happened during past investigations.

Councillor Murphy suggested that the report had been rapidly produced, given the short period between Deloitte’s appointment and the report being submitted, and asked Mr. Clarkson if he thought such behaviour raised questions. Mr. Clarkson said that Deloitte could not stop those under investigation from talking to each other, but that Deloitte had interviewed them separately and queried a number of points; he added that those under investigation had adopted this approach in the past.

Councillor Murphy asked if the Council document which had identified those ticked for Seagrave Road had any other purpose. Mr. Clarkson said that that the references to Seagrave Road were part of a much larger database, which contained details of all interaction with residents over the proposals.

In response to a question regarding 5.9 of the report, Mr. Myers clarified that officers who had been the subject of investigation and who had then left the Council had done so as a result of natural career development, and no inference should be drawn that they had resigned as a result of the investigation.

Councillor Murphy said that he believed that the cover report written by Mr. Myers lacked objectivity in dealing with the outcome of the investigation. Councillor Iggulden suggested that this was a distorted perception.

Councillor Murphy asked if Deloitte had undertaken any work with CapCo. Mr. Clarkson said that, before beginning the investigation, he had performed a conflict check in line with Deloitte policy, which had returned no conflicts.

Councillor Murphy said that in summary, he believed that an investigation of e-mails should have been the first stage of investigation. He said that he believed that an investigation of those e-mails, together with interviewing those residents on the Seagrave Road list, was necessary to achieve adequate assurance.

Mr. Myers said that the investigation had been thorough, and the Committee should note that further investigation would be extremely costly. He said that an investigation of e-mails would cost tens of thousands of pounds, reflecting the very considerable effort to do undertake a complete examination.

Councillor Iggulden noted that no further evidence had been brought forward during the investigation, despite residents being aware of the initial allegation.

Councillor Murphy said that he did not believe that an investigation of e-mails using a word search function would be as onerous as Mr. Myers said. He proposed that the Committee should request officers to arrange an investigation based on Option 2, with an investigation of e-mails between officers and interviews for those residents listed under Seagrave Road only.

The Committee voted on this proposal, and agreed on Option 1, by 3 votes to 2.

RESOLVED THAT

That the Committee accepts the findings of Deloitte as set out in their report, recognises that the Deloitte report is credible and sufficient, and accept, on behalf of the Council, that there is no case for further enquiries at public expense.