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

Solicitor/ Barrister / Chartered Legal Executive Commercial & Contracts (x2)

Warwickshire County Council
£50,856 to £57,083 per annum
Warwickshire Legal Services (WLS) are looking for two qualified lawyers to join their award-winning, motivated, and nationally recognised legal team. Warwick
Recuriter: Warwickshire County Council

Head of Finance and Deputy s151 Officer

Conwy County Borough Council
£77,153 - £88,545
We are looking for an experienced and strategic financial leader who can operate confidently in a complex, political and fast-changing environment. Colwyn Bay, Conwy
Recuriter: Conwy County Borough Council

ICT Engineer Digital Squad

Durham County Council
£35,412 to £39,152 p.a. (Pay Award Pending)
An exciting opportunity has arisen within the Microsoft 365 Team for an ICT Engineer (Microsoft 365). This role will support Durham County Council's B Durham
Recuriter: Durham County Council

Storekeeper Driver

Durham County Council
£26,403 - £28,598
An opportunity has come up in Highways Services for a Storekeeper/Driver.  They will assist the Stores Supervisor in delivering a customer focussed St Durham
Recuriter: Durham County Council

Care Support

Durham County Council
Grade 4 £25,583 - £26,824 (pay award pending)
We're recruiting to a permanent role within our Pathways Service, which delivers day services to adults with complex needs, Monday to Friday. There i Durham
Recuriter: Durham County Council
Linkedin Banner