Last week a bombshell internal audit report from Salford Council exposed a web of financial dealings whereby public funds were diverted to, yet again, subsidise Salford City Reds rugby club, now known as Salford Red Devils.
The report revealed...
Up to £164,000 of Salford City Council money set aside to pay for match day costs of the rugby club which should have been paid to the AJ Bell Stadium joint owners, Salford City Council and Peel Holdings. The details were confirmed in a letter by former Strategic Director Martin Vickers to Peel Holdings
This was all done with the full knowledge of Salford Mayor Ian Stewart. The report notes... "The City Mayor has confirmed that he was involved and was aware of, and in agreement with the contents of this letter at the time it was sent and had discussed the matter with the Deputy City Mayor" [Councillor David Lancaster].
No decision notice was ever published, meaning the payments/subsidies were not open to scrutiny by councillors, the media or the public.
The person who should have noticed the misdeed was the Council's Monitoring Officer. But the Monitoring Officer was Martin Vickers.
The Report adds: "The City Mayor has stated that whilst he was involved in the making of the decision to fund the match day costs he does not know why the proper governance procedures including producing a Record of Decision were not followed by officers at the time." Yet...
...the City Mayor has "Primary legal and strategic responsibility for the operational management of the Council and the development of its plans, policies and priorities." In other words, City Mayor, Ian Stewart, is legally responsible for the management of these decisions.
There's a lot more, including that the rugby club was given two years free rent at the Stadium, apparently worth over £700,000 (rugby newspapers reported at the time, wrongly as it turns out, that this was the sort of figure the Reds were paying for two seasons)...That Martin Vickers was given a pay-off of £78,000 before he left the Council, yet a Council loan he took on for a car was not deducted from that pay-off (see full details and background of the whole report in previous Salford Star article click here).
The conclusions to the internal audit were a complete whitewash On Vickers walking into a job with Salford Reds weeks after arranging these deals and taking a huge pay-off, the report recommends to "strengthen the Council's consideration of such matters in future"...On Vickers being the Monitoring Officer despite being the one who should have been monitored, the report recommends the Council to "consider the creation of an independent Monitoring Officer role and the appointment of a qualified solicitor to that post"...
...Even worse, the report recommends that to cover for the secret decision to subsidise match day costs for the Reds which `did not follow due process and ensure transparency', a decision is backdated by a year and that the payments continue!
The conclusions of the report are a complete whitewash but what is the Audit Committee going to do about it when it meets in public at the Civic Centre tomorrow morning (9am)?
The answer is, `Don't expect much!'. Of the nine man Committee, six are Labour Party councillors (Councillors Jim Dawson, David Jolley, Joe Murphy, John Walsh, Stephen Hesling and Assistant Mayor, Roger Jones); Conservative Councillor Robin Garrido is in the Chair, and there are two independent members, Tony Bannister and Rabbi Grant.
Labour Party councillors are already playing the report down, talking of mere `defects in the process' which will be sorted. But the audit report, we understand, is just the mere tip of an iceberg which only a full external investigation, Public Inquiry or police investigation could uncover.
In the meantime, here's some questions that the Audit Committee members might like to ask...
1) Martin Vickers had a staff car loan from the Council How much was this for? What were the pay back terms and interest on the loan? How much of the loan has been paid back and when?
2) Did Martin Vickers ever own a property on Salford Quays? If he did, did he ever put the flat in the Council's name to avoid a community charge?
3) If the Mayor knew about the decision to subsidise the rugby club, how could he `not know' why `the proper governance procedures...were not followed'?
4) Is the Mayor, who has `legal responsibility' for such decisions, willing to accept such responsibility? If so, he should resign.
5) Why did the Chief Financial Officer not pick up on all this after all, he's the one who writes the cheques?
6) Why did the external auditors Grant Thornton, not pick up on the secret subsidies? At the Audit Committee meeting tomorrow, Grant Thornton's report on the Council accounts state that "Financial governance arrangements at the Council generally are adequate...Our audit is not designed to test all internal controls or identify all areas of control weakness. However, where, as part of our testing, we identify any control weaknesses, we report these to the Council. Our work has not identified any control weaknesses which we wish to highlight for your attention".
The whole point about having local councils in charge of public money is that they are supposed to be transparent and accountable to the citizens who pay and entrust them with that money. This internal audit report shows a serious breakdown in transparency, accountability and trust.
Somebody must take responsibility for these breakdowns and it has to be the elected politicians. Will the Audit Committee make them take responsibility, or, at the very least, order an external investigation? Don't hold your breath. Expect a whitewash!
Those affected by cuts to services for vulnerable people have been absolutely horrified by the revelations of the report. They have called a demonstration outside Salford Civic Centre in Swinton tomorrow morning 8am-10am (for further details see here).
The Salford Star will be broadcasting live from the Audit Committee meeting To watch click here http://bambuser.com/channel/salfordstar
UPDATE: 27th August
Salford Mayor Scandal Whitewash Over Salford City Reds Investigation - click here
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