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.'

SIGN UP
For your free daily news bulletin
Highways jobs

Procurement Manager

West Northamptonshire Council
£49587 - £52860
At West Northamptonshire Council, we’re looking for an experienced Procurement Manager to play a pivotal role in the delivery of high quality, value for money services. This is an exciting opportunity to join our forward-thinking central procurement an Northampton
Recuriter: West Northamptonshire Council

Revenues Manager

West Northamptonshire Council
£65098 - £71353
We’re looking for a Revenues Manager to lead our Council Tax and Business Rates service, ensuring high-quality delivery, compliance with legislation, and a strong focus on customer experience. In this role, you’ll lead the strategic direction of Coun Northampton
Recuriter: West Northamptonshire Council

Licensing Manager

Fenland District Council
Hay 1 £55,642 - £59,256
We are seeking a highly skilled and influential Strategic Lead for Licensing Services Cambridgeshire
Recuriter: Fenland District Council

Street Cleansing Team Leader

Royal Borough of Greenwich
£40,547 - £41,870 (includes additional allowances)
Street Services - improving residents’ lives Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

Practice Development Lead

Royal Borough of Greenwich
PO5 - £52,194 to £55,323
Are you ready to shape the future of Adult Social Care in Royal Greenwich? Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich
Linkedin Banner