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CONDITIONS RIPE FOR CORRUPTION IN UK LOCAL GOVERNMENT
 

Star date: 22nd November 2013

TRANSPARENCY INTERNATIONAL REPORT MIRRORS SALFORD STAR EXPERIENCE

A new report into corruption in local councils by Transparency International, the world's leading non-governmental anti-corruption organisation, finds a "disturbing picture" where "the conditions are present in which corruption is likely to thrive".

The report finds lots of areas of concern, including low levels of transparency, networks of cronyism, the reduced capacity of local press and the removal of an independent public audit. And the findings mirror the experiences of the Salford Star at a hyper local level.

Full details here…


How many times has the Salford Star screamed it out that Salford City Council is getting less accountable?

The Star called for a public inquiry into issues around the Pathfinder `developers' goldmine' project. Ignored.

The Star called for an external audit of loans and money handed to Salford City Reds. Ignored.

The Star had to actually go on strike in the summer against the total lack of transparency at Salford Council – Freedom of Information requests ignored; legal rights to see Council information blocked; legitimate press requests for comments/information chucked in the bin (see here).

Both the City Mayor, Ian Stewart, and his Assistant Mayor Gena Merrett publicly slurred the Salford Star with accusations of `extremism' and `lies'…and when the Salford Star tried to drag Ms Merrett to a standards committee to account for her actions this was turned down by senior Environment Officer, Ben Dolan. Gena Merrett, as Assistant Mayor for Environment is, of course, his boss! (see here)

Meanwhile, every single community media in the city which could hold Salford Council up to account is actually financially supported/controlled by Salford Council. Except the Salford Star. Indeed, as goalposts were constantly moved, community reps were told they could be jailed if they agreed to fund the city's only truly independent community publication.

Whether people love or hate the Salford Star isn't the issue. What is at issue is the increasing lack of transparency and accountability of both Salford City Mayor and Salford Council – conditions mirrored throughout a country in which Transparency International finds a "disturbing picture" where "the conditions are present in which corruption is likely to thrive".

Transparency International is the world's leading non-governmental anti-corruption organisation. Its aims are to "raise awareness about corruption; advocate legal and regulatory reform at national and international levels; design practical tools for institutions, individuals and companies wishing to combat corruption; and act as a leading centre of anti-corruption expertise in the UK".

The organisation has just produced a 71 page report on `Corruption In UK Local Government: The Mounting Risks' which examines "safeguards against corruption and the rapid and substantial changes to this regime instituted by the current UK Government". It found lots of areas of concern – most of which have been experienced by the Salford Star.

"On the one hand, the conditions are present in which corruption is likely to thrive – low levels of transparency, poor external scrutiny, networks of cronyism, reluctance or lack of resource to investigate, outsourcing of public services, significant sums of money at play and perhaps a denial that corruption is an issue at all" the report concludes.

"On the other hand, the system of checks and balances that previously existed to limit corruption has been eroded or deliberately removed" it adds "These changes include the removal of independent public audit of local authorities, the withdrawal of a universal national code of conduct, the reduced capacity of the local press and a reduced potential scope to apply for freedom of information requests."

The areas of concern that show "a marked decline in the robustness of local government to resist corruption" include…

Localism

The Government has given councils more self regulation, or control over scrutinising their own affairs. The Transparency International report states "A decentralised model that relies on local institutions and individuals to act as a check on the power of elected members runs the risk that those individuals will back away from challenging those in local power for fear that their jobs, promotion prospects or status in a political party will be jeopardised".

With the proposed abolition of the Audit Commission, councils will be responsible for awarding their own auditing contracts with private firms of accountants. Indeed, Salford Council already uses a private auditor, Grant Thornton, which hasn't been the slightest help when asked to investigate financial matters by the Salford Star, particularly surrounding loans to Salford City Reds.

The report states: "A thorough and wide-ranging audit should be part of the system of checks and balances to counter corruption. We believe that the new system – in which local authorities themselves are solely responsible for awarding their audit contracts and where there is no back-stop support for auditors who are challenging the local authority – will narrow the scope and effectiveness of local audits, while increasing potential conflicts of interest."

Councillors, the Mayor and his Assistants

The Transparency International report states that…

• There is no longer a universal code of conduct to provide clarity to members serving on different public authorities and committees
• There is no longer a requirement for members to declare gifts and hospitality and no legal requirement for either a standards committee or the monitoring officer to check any register of interests on a regular basis
• There is no longer a statutory requirement for a council to have a standards committee
• There is no longer any obligatory sanction for members that violate the local codes of conduct, with overreliance on party discipline as a sanction
• Since the abolition of Standards for England, there is no longer a national investigations body for misconduct
• Some local authorities may struggle to appoint the required independent persons of the appropriate calibre and legitimacy to perform the new role that has been created under the self-regulation system
• The system relies too heavily on the new offence of failing to declare a pecuniary interest – which is arguably unenforceable and misses the point that transparency is not sufficient to deter corruption
• The ability of chief executives, financial officers and monitoring officers to hold elected members to account would be compromised by proposals to abolish their statutory employment protection.

While not all of these are true of Salford Council, the case of Gena Merrett shows how important it is for an outside independent body to investigate cases of inappropriate standards.

Meanwhile, as Salford Star pointed out in a previous article (see here), elected reps don't have to declare any gifts or hospitality under £100 value – and a lot can be had in Salford for £99.99!

Private Contracts and Outsourcing

With cuts in budgets and the increased use of private contractors to carry out council services, the report states that there is an increased risk of "lucrative opportunities for corruption".

It adds that the system is "is inevitably vulnerable to cronyism, and favouritism as well as outright bribery. It is difficult for anyone without considerable knowledge and expertise of the area to hold those involved accountable."

Particularly vulnerable situations involve companies set up to take on council contracts which hire council employees to do the job… "These structural changes have altered the powers and responsibilities of members and officers, with a potential impact on the opportunities to engage in corruption" states the report.

"If local authority employees abuse their access to insider information or their ability to shape policy or contracts whilst in office in order to create opportunities for themselves, their friends, or for private-sector companies for which they will later work, this is corrupt" it adds "In addition, it might have consequences in terms of services being provided at low quality or poor value for money. The transfer of individuals from government to private-sector roles, sometimes known as the 'revolving door', has been associated with many apparent conflicts of interest at the national level.

"Research conducted for this report suggested that revolving-door type corruption is difficult to prove, but may not be uncommon and is certainly creating suspicions which, in themselves, undermine public confidence" the report explains "Back-scratching' might involve the provision of bribes or favours, or the promise of future employment or kickbacks from contracts."

The Salford Star can think of at least one instance where something like this might have occurred…

Meanwhile, in terms of the procurement process generally the report goes into great detail about the awarding and managing of contracts and states… "departments are often left to manage contracts – raising risks not just of corruption but also of inefficiency"…while contractors either increase the price or use cheaper means to fulfil contracts… "…the number of variations – that's where people make money" a procurement expert is quoted as saying "The profit is often determined by the award of work under the framework contracts, particularly where the pricing basis is not clearly defined, so that so that you can end up with charging for extra work by hourly rates"

The report concludes that "There is a risk that the local authority's procurement team could collude in that strategy. If contracts are written with a view to such re-negotiations of terms and rates, or with provisions for charging extra for unforeseen eventualities or errors, this may be corrupt".

The key, states the report, is more transparency in the awarding of contracts. But, as Salford Star has reported, virtually all private contracts are dealt with under Part 2 of committee meetings where the public is excluded and reports are not open to inspection by the press or anyone else.

Indeed there was a case, only last week where Salford City Mayor, Ian Stewart, agreed compensation for `land at New Bailey Street' – with no details, no financial amounts and the only stated reason being that it "will assist with the implementation of the Central Salford Regeneration proposals".

Planning

The risks for corruption in planning are well documented but the Transparency International report points to two particular aspects of planning that are ripe for corruption…

Change of Use - "All land under the control of local authorities is categorised as being suitable for certain types of usage, such as 'green belt' or 'residential', but local authorities have the authority to grant permission for a change of use" the report states "Such change-of-use permissions are particularly valuable in the United Kingdom where 'development gain' – the increase in the value of land as a result of change of use – is not taxable Thus, developers may seek to corrupt planning officers or committee members to approve an application for change of use."

Section 106 – these are the payments to the Council from developers for roads, playgrounds, parks etc in return for planning permission. The Salford Star has documented scores of instances where 106 payments and affordable housing commitments have been waived or changed.

While councillors now say that it's the ConDem Government forcing their hand, this has been going on in Salford for years before this Government came to power. While there's no suggestion of any corruption in Salford, the Transparency International report explains that experts in the field who they interviewed "expressed suspicions that councillors or officers might be receiving bribes in return for negotiating Section 106 agreements on terms that are favourable to developers at the expense of the public interest, or for not monitoring or following up on Section 106 promises".

It adds: "Research conducted by Unlock Democracy has found that, while councils in England and Wales have entered into commitments related to Section 106s worth around £90 million, in around two-thirds of cases, they have failed to register the deals with the Land Registry. This effectively nullifies the agreements. It is very difficult to hold local authorities to account in this area because data is held by around 350 different organisations and reporting arrangements are not standardised."

Senior Council Officers As Political Puppets

With a huge understatement, particularly in the case of Salford where we have a Mayoral system, the report states : "Council leaders often have great monopoly and discretionary power, while accountability is weakened by the fact that people around them may be disinclined to challenge their authority…

"…It is therefore essential that key personnel among the officers – such as the Chief Executive [now gone in Salford!], the Chief Financial Officer and the Monitoring Officer – have the independence to scrutinise the conduct of leaders of local authorities and the confidence to challenge them if necessary" it adds "To this end, several important officer roles in local government have statutory protection, meaning that it is not possible for council members to decide to fire them without an external investigation by a designated independent person."

The Government launched a consultation this year to remove this statutory protection, "threatening to make these roles much less independent and more vulnerable to political, social or personal influence" states the report.

A Free Press – The Role of Journalists, Electors and Whistleblowers…

So where are the checks and balances on local councils? Opposition parties? The reports cites `one party councils' for a reduction in accountability. Salford is almost a one party council (see here).

Whistleblowers? The report quotes a whole list of cases where whistle blowing by council employees has led to dismissal or sanctions.

The electorate? While people can stick an `X' in an election ballot box, first they have to know what the hell is going on to be properly informed.

Which leaves…the Media…Except that local media has been weakened in recent years, with the loss of hundreds of journalists jobs and a greater reliance on advertising for revenue as sales have dropped.

"With advertising revenues in freefall, there are also risks that the scrutiny function of local press may be compromised" states the report "with journalists being unwilling to criticise local authorities or local companies because they rely on them to buy advertising."

In Salford, the Mayor and the Council also have their own propaganda Life magazine, plus all community media (except the Salford Star) under its control, via funding mechanisms.

REPORT CONCLUSIONS

While the Transparency International report states that its intention was not to prove that corruption exists – and, indeed the Salford Star is not accusing Salford Council of corruption – what it does imply is that the `safety net' in relation to corruptuion is being greatly reduced.

The report identifies twelve areas in which local government is particularly vulnerable to corruption; identifies sixteen recent changes that it believes increase corruption risk for local government; and makes twenty-two recommendations that will help to mitigate these risks.

"We are aware that local authorities are under pressure financially and that any solutions need to reflect this" it concludes "At the same time, that means it is easy to overlook the threat from corruption in the face of other pressures – but this in itself creates the enabling environment for corruption.

"Without proper accountability, there is a risk that more members and officers in local government will exploit – and perhaps even seek out – opportunities to behave corruptly" it adds "Moreover, one of the greatest aids to prevention is the fear of being found out. The new framework removes vital pieces of the local government counter-corruption architecture. The risk of being found out is reduced as a result.

"Overall, we conclude that the corruption risk for local government in the UK has increased, and that as a result corruption in UK local government is likely to increase…"

Transparency International recommends that the Government "needs to review the changes that are taking place in local government to ensure that they do not inadvertently create an enabling environment for corruption. This will require – at a minimum – a corruption risk assessment, strengthened whistleblowing systems, enhanced audit procedures, extension of the Nolan Principles and Freedom of Information obligations to private sector services contracted out by local authorities, re-introduction of a common ethical standard and a willingness to adjust or amend other recent changes if that should prove necessary."

To read the full Transparency International report – see www.transparency.org.uk

Stan wrote
at 16:45:00 on 10 March 2014
Can anybody really be surprised by this report . It really explains how undemocratic decisions are made against the wishes of the People . Still think this is Democracy .?
 
John wrote
at 12:16:03 on 26 November 2013
'True Salford', you seriously think change will come from voting Conservative?!! And vote UKIP if you can't own up to wanting to vote BNP and want to vote for a racist party (never mind all the other bonkers things they are)
 
Kenneth w mckelvey wrote
at 20:16:47 on 25 November 2013
#A Briggs is right butThe biggest liberty Takers in the UK are the people with business's who make untold millions of pounds in the UK like Peel Holdings and then dodge the tax on those earnings/ What the politicians are not explaining to the people of the UK is the Fact that 67 Billion£s of tax that is dodged Annually /Has got to be made up by upping the tax on people Like us/ They upped VAT to 20% / They upped these outrageous Taxes on Alcohol Cigs Petrol etc They are now considering upping tax on Food/When all they have to do is to pass One New Tax Law Stating if you make money in the UK you have got to pay a fair Tax in the UK like the rest of us Mortals
 
True Salford, former Labour loyalist wrote
at 20:16:31 on 25 November 2013
Look if people in Salford want change then they need to vote UKIP or Conservative. Voting Labour just means putting another mouthpiece in place, voting for an independent or a minority party is just a wasted vote.
 
Kev wrote
at 16:40:18 on 24 November 2013
Interesting reading. Of course as long as the electorate are fooled into thinking this is Democracy , then the Taxpayer-Robbing Parasites will continue to impose their will . We , the Electorate , must end this .
 
A.Briggs wrote
at 16:40:01 on 24 November 2013
This is nothing new. Corruption deliberately instigated against taxpayers is rooted in the corrupt undemocratic political system that we are forced to tolerate - for now . Revolution is coming , and not a day too soon . Corrupt politicians , local councillors and their toadies will get their just reward in the Peoples Courts.
 
Matt Simpson wrote
at 14:27:10 on 23 November 2013
An excellent article, certainly gives a lot of food for thought about the people that keep getting voted in. Roll on May.
 
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