Mark Whitehead 24 September 2018

Review finds 'insufficient financial controls' enabled £2m council fraud

The conviction for fraud of a former employee of a joint venture set up by Barnet council is a 'textbook example of why outsourcing fails', according to Labour.

Shadow communities secretary Andrew Gwynne, responding to the publication of the audit report on the £2m fraud case, said it showed the 'mass outsourcing experiment with our public services' had failed.

The report by Grant Thornton said there were insufficient financial controls in place for the outsourced finance and regeneration services.

Last month 38-year-old Trishul Shah, who was working as a capital investment manager for Regional Enterprise Ltd, set up by the council and outsourcing giant Capita, was jailed for five years.

He admitted two offences of fraud the result of 62 fraudulent payments on compulsory purchase orders in 2016 and 2017 totalling more than £2m.

The report by Grant Thornton said the council had insufficient oversight of the joint company which 'gave the individual access to cost centres on the ledger for illegitimate purposes'.

It said the council was aware of 'deficiencies in the governance arrangements' and had started work to address them, but it was not completed in time to detect or prevent the fraud.

Capita has pledged to underwrite the financial loss to the council.

Mr Gwynne said: 'In Tory-run Barnet, outsourcing has led to a litany of services problems, unstaffed library buildings, Ofsted ruling that the council is ‘failing vulnerable children’, and now accusations of major fraud linked to a Capita contract.

'Internal processes and monitoring clearly failed in this case - we urgently need action from the Government to ensure that this could not happen again.'

Banning urban pesticide use image

Banning urban pesticide use

RSPB and PAN are working on a letter from local councillors calling on the Government to introduce a national ban on urban pesticide use. Find out more below.
SIGN UP
For your free daily news bulletin
Highways jobs

Domestic Abuse (Perpetrator) Prevention Worker

Essex County Council
£30931 - £35362 per annum + + 26 Days Leave & Defined Benefit Pension
Domestic Abuse (Perpetrator) Prevention Worker - Multi Disciplinary TeamFixed Term, Full Time£30,931 to £35,362 per annumLocation
Recuriter: Essex County Council

Data Analyst - 6 month FTC

Essex County Council
£25081 - £29508 per annum + + 26 Days Leave & Defined Benefit Pension
Data AnalystFixed Term, Full TimeUp to £29,508 per annumLocation
Recuriter: Essex County Council

Transport Strategy Manager

North Northamptonshire Council
£55848 - £59442
We are looking for an experienced and talented professional to join North Northamptonshire Council Sheerness House, 41 Meadow Road, Kettering, United Kingdom
Recuriter: North Northamptonshire Council

Specialist Children and Family Worker - 12 month FTC

Essex County Council
£30931 - £35362 per annum + + 26 Days Leave & Defined Benefit Pension
Specialist Children and Family WorkerFixed Term, Full Time£30,931 to £35,362 per annumLocation
Recuriter: Essex County Council

Director of Children’s Services

Bedford Borough Council
Up to £136,757 per annum (pay award pending)
Bedford Borough Council is looking for a dynamic and visionary Director of Children's Services Bedford, Bedfordshire
Recuriter: Bedford Borough Council
Linkedin Banner

Partner Content

Circular highways is a necessity not an aspiration – and it’s within our grasp

Shell is helping power the journey towards a circular paving industry with Shell Bitumen LT R, a new product for roads that uses plastics destined for landfill as part of the additives to make the bitumen.

Support from Effective Energy Group for Local Authorities to Deliver £430m Sustainable Warmth Funded Energy Efficiency Projects

Effective Energy Group is now offering its support to the 40 Local Authorities who have received a share of the £430m to deliver their projects on the ground by surveying properties and installing measures.

Pay.UK – the next step in Bacs’ evolution

Dougie Belmore explains how one of the main interfaces between you and Bacs is about to change.