UPDATED WITH VITAL INFORMATION: Changes to the Barham Park restricted covenant for payment of £200,000 goes ahead allowing the building of four 3 storey houses in the park

 

 Planning Committee  preliminaries and the section on the restrictive covenant.      (Video by Brent Council including  rather irritating facial focus. Captions by Wembley Matters)

At last night's Scrutiny Committee it was interesting to see Muhammed Butt, as chair of Barham Park Trustees sitting on the opposite side of the table to his brother Cllr Saqib Butt, a member of the Scrutiny Committee that was scrutinising the Trust's actions.

In the event, as the video shows, Cllr S. Butt, along with Cllr Dixon and Clr Maurice were excluded from the section of the meeting regarding the restrive covenant because they were members of the Planning Committee that had approved George Irvin's planning application to build four 3 storey houses in Barham Park. A decision that could only implemented by removal/amendment of the restrictive covenant, an action subsequentally approved by the Barham Park Trustees on payment of £200,000. Cllr S. Butt is vice chair of the Planning Committee. Legal officers felt that the three should not take part because of how a possibe conflict of interest could be perceived by the public.

Cllr Lorber declared an interest but continued to take part as a member of the Scrutiny Committee after being warned by legal officers that a complaint might be made about his participation.

Sorry if this is confusing, it is complicated, but Philip Grant's address to the Committee, read for him by former Labour councillor Gaynor Lloyd, sets out the issues:

The Report to the 24 February Trust Committee meeting states:

‘The restrictive covenants were imposed in August 2011 to preserve the area's character and limit development.’

Those aims are just as important now as they were in 2011.  Barham Park is one of Brent’s Historic Parks and Landscapes, a heritage asset which  the Council promised to protect.

The covenant does that by prohibiting ‘any development in or upon the Property’, which is inside the park and a Site of Importance for Nature Conservation. Planning Committee were misled into granting the development consent in 2023 and I’ll explain why if you ask, so the covenant is the last line of protection.

The Trust’s February decisions appear to mirror the Council’s Property Strategy, which Cabinet approved last year. They do not reflect the charitable aims of the Trust, or the wishes of residents who are meant to be its beneficiaries.

The Charity Commission recommended local people should have a voice in the Trust’s decisions, and two years ago I suggested to Debra Norman how this could be achieved. My idea was ignored in the Governance review later that year, and the Chair refused to allow my suggestion to be heard by the Trust Committee in September 2023.

Other residents and councillors have also had requests to speak refused. Brent Council is the sole Trustee, and as the Trust Committee are not acting in the Trust’s best interests, I would ask you, please, to refer the matter back for further consideration.

When officers were challenged by Paul Lorber to publish Charity Commission advice on the covenant removal they referred to Commission's inquiries after a complaint from a member of the public. They had sent a response and the Commission was satisfied with the Trust's processes.  They appeared to be referring to the letter published on Wembley Matters  where the Commission said they were taking not further action 'at this time' but would keep the complaint on file in case there were other concerns in the future. LINK.

The detailed discussion included much confusion, particularly over whether the proposed development was car/garage free or not and comments made by the Planning Legal Officer that statements could have been drafted more clearly, can be heard in the video.

The final decision, made by the the Scrutiny Committee's three members left standing - Cllr Long, Mitchell and Malloy, plus Chair Cllr Daniel Kennelly voted NOT to refer the matters covered in the Call-in back to the decision maker, Barham Park Trust, or Full Council. Cllr Lorber voted to refer it back.

The decision took immediate effect so the changes to the restricted covenant and its purchase goes ahead and the four houses will be built.

 

 UPDATE WITH COMMENT FROM PAUL LORBER

 This comment was too long for the normal comment word limit so published here instead: 

Anne Wade (comment below the article) explains very clearly how important Barham Park is to local people and why it is important to keep up the fight to preserve it for the benefit of local people and not of private developers or Councillors who simply do not care.

If the Labour Councillors who act as Trustees or Council Officers managed the affairs of the Barham Park Trust ( a charity) effectively there would be no issues and no need to carry out any Scrutiny.

As I have pointed out for some time (and Wembley Matters has covered my concerns) the Barham Park Trust is managed very badly by both the Labour Trustees and by Brent Council Officers. I will give you some examples:

1. When Labour closed the Public Library in Barham Park they brought in a tenant who took over the Library space and most of the rest of the building. The Council claimed that dealing with just one tenant would make things simpler.

Over a number of years that tenant failed to pay their rent and built up arrears of over £60,000. A large amount is still outstanding today - this has cost the Council/Trust thousands of pounds in lost interest.

2. Most tenants occupying the building have Leases which state their rent and the service charges. The rents are subject to regular reviews. Council Officers working on behalf of the Trust failed to carry out rent reviews (until I pointed it out to them) and failed to charge service charges. This has cost the trust many thousands of pounds.

 

3. The Trust was persuaded to employ consultants at a cost of over £20,000 to undertake a major feasibility study to upgrade the buildings to generate commercial rents. The proposal is to replace the space occupied by long standing community organisations with Hotel Rooms and Shops. The Trust was told that a Silver Option would cost £3,162,000 and the Labour Trustees gave this a go ahead. While the consultants said that to deliver this option would require 'vacant possession' NO one bothered to ask when vacant possession could be achieved. As  the Barham Community Library lease does not expire until October 2031 and much can change in 7 years this was a pointless exercise.

 

BUT it gets worse. Having told the trustees that the Council and not the Charity would pay the £20,000 consultancy fee - they charged the £20,000 to the Charity anyway "because the Council had no authority to pay it". Yet it is the same Councillors and same Officers who advise and make decisions for the Trust and for the Council.

 

AND to top it all - 2 years after the £20,000 was spent on the consultants and the Trustees accepted the £3 million option it turns out that the £3,162,000 cost is exclusive of VAT and that the  Barham Park Trust would have to cough up over £600,000 in VAT extra on top if the daft project was proceeded with.

I could go on listing a catalogue of disasters inflicted on the Barham Park Trust as a result of poor management and poor  oversight by the Trustees but I will save that for another day.

I will however say something about the saga of the Covenant.

The first point to make is that it was put in place to prevent further building work in the Park. It was part of the deal with George Irvin and he knew full well what the restrictions were when he bought the two existing houses. That was it - NO more!

If he does not like it he could always sell the two houses back to the Council - after all the Council has two Companies specifically buying up properties in the open market and there is nothing to stop the purchase of these two with the restrictive covenant in place.

The Council has now been dealing with the Covenant issue for 4 years. Council officers have spent vast amount of their time on this. Their time has not been costed but it won't be cheap and is met by Council Taxpayers and not by George Irvin.

Almost two years ago Council Officers advised the Trustees that it is normal for the development gain arising from varying the Covenant to be split on a 50/50 basis. The Trustees agreed to proceed on the basis of this advice.

The Trustees were presented with a 'revised' (it is not clear why it was revised) valuation showing the Development Gain/Profit that would arise after all the demolition, rebuilding and other costs at their meeting in February 2025. They have decided to keep the valuation and the figures confidential from the eyes of the public.

Members of the Scrutiny Committee were provided with a copy of the valuation a few days before the Scrutiny Meeting.

At the Scrutiny meeting I challenged Councillor Butt, Chair of the Trustees and Councillor Officers about the 50/50 advice and why the Trustees (all members of the Labour Cabinet) were prepared to accept a gross payment of £200,000 when this was a very long way from a 50/50 split. While I cannot disclose the exact figures I can say that my intervention at the Scrutiny Meeting was because the difference is MASSIVE! - and it is the Barham Park Charity which is the big loser.

On a final point it is important to stress that the £200,000 selling price is the 'gross' amount before expenses of the valuation and much more. The Trust will therefore benefit by much less than £200,000 although through another 'oversight' this is not mentioned in the Trustee Meetings either.

I (and others) have now been challenging Brent Council about the mismanagement of the Barham Park Trust and the neglect of Barham Park since at least 2011 (the year they closed Barham Park Library). Vast amount of money has been wasted on mismanagement and pointless consultants reports.

I am sorry to say that Barham Park is not safe in the hands of Brent Council or its self appointed group of Labour Councillors as Trustees.

It came as no surprise that the Labour Councillors on the Scrutiny Committee voted on block in support of their Leader.

There is however only so much that can be covered up. Watch this space.

 

 

Charities Commission: 'No further action at this time' on Barham Park Trustees but concerns remain on file

 A member of the public has received the following response from The Charities Commission after expressing concern about the sale of the restrictive covenant to George Irvin by Barham Park Trustees.  I understand that this is not the first complaint made to the ommission about the conduct of the trustees.

 

The covenant sale and Baham Park operational matters are the subject of a Scrutiny Call-in by opposition councillors on Thursday.

A petition to Brent Council on these matters had reached 510 signatures  at the time of publication of this article.  PETITION

Barham Park Trust accounts withdrawn for second year. Cllr Lorber claims 'accounts wrong and misleading'.

Speakers were not allowed at the Barham Park Trust meeting yesterday, once again limiting the scrutiny of Trustees who are all Brent Cabinet members. Yesterday the accounts had to be withdrawn. Cllr Paul Lorber today write to Brent Council's Chief Executive:

 

Last year I challenged the accuracy of the 2022-23 Barham Park Trust Accounts (the Charity)

I pointed out that they were wrong because:

1.  They were wrong on the basis they were prepared and presented. They did not show correct information in a clear and transparent way.
2. They were wrong because they did not reflect the correct rent due to the Charity.
3. They were wrong because they did not show the Service Charges due to the Charity.
4. They were wrong because they did not show the correct service charges due to the Charity.
5. They were wrong because around £20,000 of architects charges that were authorised to be paid by the Council were charged to the Charity without authority.
6. They are wrong because insufficient interest was paid to the Charity by Brent Council for use of the Charity’s Cash balance.
7. They were wrong because expenditures incurred on behalf of the Charity by the Council were not shown in the Accounts.
8. They were wrong in many other aspects too many to list here.

My concerns were discussed at a meeting with you and the Director of Finance.

I did not accept the explanations and justifications given as I consider them to be wrong and flawed.

The 2022-23 Accounts were withdrawn from the Barham Trust Meeting in September 2023 and only represented in January 2024. In my view they were still wrong.

You asked for a “top level review” of those accounts without ever being willing to confirm who undertook the review or whether they were qualified in the field of Charity accounts to undertake it. 

The conclusion you reported to the Trust was that there was nothing wrong with the accounts but that the presentation of the Accounts could be “more clear and transparent”.

Just over a week ago the 2023-24 Accounts were published as part of the papers for the Barham Park Trust meeting on 10 September 2024.

I challenged those accounts because they were neither “clear or transparent” and because as in the previous year they were wrong. I advised the Director of Finance and other officers of my concerns and pointed out many errors and discrepancies, requesting replies before the meeting.

I did not receive any substantive replies. 

The Accounts are once again wrong and misleading.

You are not an accountant and rely on advice of others who are. I did however point out to you the importance of accurate and clear accounts. Without accuracy and clarity decision makers cannot make the right decisions. Wrong decisions have major consequences as they have for the Barham Park Trust for many years - money is wasted and wrong decisions are made.

Without any explanations from the Director of Finance or any questions from the Trustees the 2023-24 Accounts for the Charity were once again pulled from the Agenda at the last minute.

That is the 2nd time in 2 years. Why - because they are wrong and misleading. I am right and your finance officers are wrong.

This has now turned into a major credibility issue for:

You

Director of Finance and his Team

Leader of Brent Council and all the other Trustees

The Independent Examiner 

Brent Council

If something as simple as the Accounts for a small Barham Park  Trust Charity are wrong and have to be withdrawn two years running how can anyone have confidence in Brent Council’s own accounts. How much in failed income collections or inappropriate expenditure do those accounts hide?

I, Scrutiny Committee and the whole Council were fobbed off last year by the so called ‘Top Level Review’.

That cannot happen again.

The Barham Park Trust accounts must be produced and presented on the accruals basis (the same as is done for Brent Council’s accounts) so that they show clearly and in sufficient detail and clarity the Income and Expenditure of the Charity and  its Assets and Liabilities. The accounts should show clearly the income from rents due (receivable) by the Charity in any one year in its Income and Expenditure Account and any amounts due to its debtors within the balance sheet. They should also show clearly the cost of services incurred and donated by the Council to support the Charity. Only then will a reader of those accounts see the true picture.

It is clear to me that the Brent Finance Department  do not understand and lack the experience of producing Charity Accounts. The task should be handed over to a competent person with the necessary skills and knowledge to do so.

Many wrong decisions were made at the meeting on 10 September 2024 partly as a result of the failure to fully understand the financial position of the Charity. This is partly due to the wrong accounts and lack of understanding of the true position of the Charity. Those decisions will be challenged and they should be reviewed.

As I care about Barham Park and believe that its affairs need to be managed properly I am happy to provide my services and accounting experience and advice free of charge.

I look forward to your early reply as to how this mess will be sorted.

Regards

Paul

PS. For the avoidance of doubt Friends of Braham Library pay their rent and are not one of the current tenants who owe any rent to the Charity. 

Cllr Lorber presses case on Barham Park Trust accounts despite CEO's 'high level' review

 Both the Barham Park Trust Committee and the Resources and Public Realm Scrutiny Committee meet on Wednesday January 24th.  The former includes the 'High Level Review' of the Barham Park accounts promised by Kim Wright, Brent's new CEO at the special call-in Scrutiny Commitee held on October 26th  to consider issues around the accounts (Minutes of the meeting).

 

Extract from CEO's Report LINK:

 

I am satisfied that the objectives and scope which I set for the review have been met. Furthermore, I am satisfied that the review did not identify any material issues relating to the accuracy of the accounts. However, there have been areas identified where the accounts could be presented in a more clear and transparent way moving forward. This is particularly in the way rental income is presented and how the netting off of income and expenditure is shown.

 

3.9 There were also some helpful observations made regarding operational practices concerning the running of the Trust which could impair, or be perceived to impair, the Council’s arm’s length relationship with the Trust. In particular:

1. The trust not having its own bank account (up until recently);

2. The award and management of NCIL funds for park improvements being managed by the Council;

3. A lack of rent reviews undertaken by the Trust owing to the ongoing feasibility study commissioned by the Council;

4. Cash advances being paid to the Trust for rents overdue.

 

3.10 I have discussed these actions and observations with the appropriate officers, and all have agreed to implement the actions. In addition, whilst the rationale for the practices set out at 3.9 is clear existing practices are neither improper nor have any impact on the accuracy of the accounts, I have asked officers to review its management of the Trust to ensure that appropriate segregation and separation is in place where appropriate to clearly distinguish between activities of the Council and activities of the Trust,

 

Cllr Paul Lorber, one of the councillors instigating the Call-in is not satisfied and requested to speak at the Barham Park Trust meeting. The chair of the Trust, and leader of the Council, Muhammed Butt refused his request.

 

Cllr Lorber then wrote to all Brent councillors making his case:

 

Dear Colleagues

 

If you see mistakes and wrong doing you should never be afraid to speak up. You should also not allow yourself to be fobbed off.

 

At successive meetings of the Barham Park Trust I highlighted the errors in the presented 2022/23 Accounts. The 1st version of the accounts went to a meeting on 5 September and had to be withdrawn at the last minute. The revised accounts presented to a reconvened meeting on 26 September did not make much sense either.

 

At a subsequent meeting of the Scrutiny Meeting I made the point that those misleading and inaccurate accounts hide the truth of how the Barham Park Trust Charity financial affairs have been mismanaged - making the point that the mismanagement has cost the Charity around £100,000 - with on going losses going forward.

 

You will see from the Agenda of a reconvened Barham Park Trust Meeting that the Chief Executive commissioned a “high-level consultancy based review” relating to the concerns and issues raised.

 

The Chief Executive then explains that the review was NOT intended to do - it “was only ever limited to a narrow scope…”

 

The aim of “high level reviews” “of limited scope” should be obvious - not to uncover anything embarrassing and to protect senior Councillors and officers of the Council at all costs.

 

The Barham Park Trust Charity exists because 87 years ago a resident of Sudbury donated his home and gardens for the enjoyment of local people in our area.

 

He entrusted the management of his gift to the local Council - first Wembley BC and later it’s successor - Brent.

 

We all - Councillors and Officers - have a joint duty to look after and protect the bequest from Titus Barham.

 

I take my duty seriously and have tried to engage both with the Trust Committee and Council Officers to help to highlight the mistakes they made so that correct Accounts are prepared and ongoing losses being sustained by the Charity are stopped.

 

I requested the right to speak at the meeting on 24 January. The Chair has refused my request to speak.

 

Prior to that refusal I prepared a written submission to assist the Committee in their deliberations on the 24th and ask some searching questions of the officers.

 

Mistakes can happen. I will not criticise Councillors or Officers for making mistakes as long as they correct them when they are pointed out to them.

 

I will not however accept or tolerate mistakes which those in power and authority then try to cover up.

 

Cllr Lorber sent two documents with his email that are embedded below:

 

 

 

 

 

 

Barham Park accounts: Cllr Lorber provides evidence for claim of £100k combined loss to the Trust

Following the Scrutiny Committee hearing of the call-in over the Barham Park Trust accounts, Paul Lorber has given me permission to reproduce his letter to Kim Wright, Chief Executive of Brent Council:

 

I am writing to summarise my continuing concerns about the losses suffered by the Barham Park Charity as a result failures of the Councillor Trustees and by Officers of Brent Council.

I will deal with the saga of the ‘changes template/style of the 2022/23 under separate cover.

 

One Cabinet member and two other Labour Councillors expressed the view that yesterday’s scrutiny meeting was a "waste of time and money". Since the system of Scrutiny was set up by a Labour Government with the aim of holding decision makers to account these views are surprising and undermine the democratic process and bring it into disrepute.

You told me a while back, in response to my numerous concerns about the Barham Park Trust (BPT) Accounts and loss of income, that an independent audit was to be carried out. I had asked a while back about the scope of that audit and who would undertake it. I was interested because I would wish to make a detailed submission to that person.

As you know I have been expressing my concerns for some time and engaged with officers to get proper answers to my concerns. Sadly these have not been forthcoming. I also made an in advance request to speak at 26 September meeting of the Barham Park Trust which dealt with the accounts deferred from the meeting of 5 September on the grounds that a wrong form was used. I was denied the right to speak and the ability to point out numerous mistakes made by various units of the Council.

The revised accounts - supposedly on the better "received and paid" basis were approved without any questions or review by the Trustees I had no choice but to initiate a call in to Scrutiny.

At Scrutiny one of your officers intervened every time any member wished to ask about figures in the accounts on the grounds that Scrutiny Members could not ask "any operational questions". This seemed bizarre as all numbers in those accounts were the direct result of "operational" decisions many of which could be the wrong decisions.

A mention was made that you had initiated a review of the Accounts but no one present (not even the Operational Director with oversight over Barham Park Trust) was able to provide any details as to the scope of that review and who would to conduct it or the timescale. It sounds a Sir Humphrey Appleby type of review. Scrutiny then expressed a  rather forlorn wish that the findings of that mystical review might possibly be reported to them.

I tried to explain the problems to Scrutiny and made a claim that in my view that through bad practices - "operational" decisions - the Barham Park Trust has lost around £100,000 income and therefore that its cash balances  and reserves are understated by at least £100,000. Action is needed to stop the ongoing losses to arise in future years. This is the list:

1. £22,000 architects charges to the Trust. The BPT agreed to undertake the architects study into redevelopment and income generation on the basis that the estimated cost of up to £25,000 would be met by the Council from its Capital program. That is the only decision BPT as an independent endorsed. At the meeting Councillor Tatler, present as one of the Trustees claimed that the Council was advised that the fees could not be paid out of the Councils Capital Fund and "therefore we agreed to charge it to BPT". I think Councillor Tatler forgot the role she was serving - as a Trustee her sole responsibility is to the Trust and NOT to the Council.

 

Irrespective of Cllr Tatler's confusion there is no record of a decision or authority in place from the BPT Trustees to charge £22,000 to the Trust 2022/23 Accounts.

 

2. The largest tenant occupying space in the Barham buildings signed a lease in 2014 at a rent, inclusive of service charges, of £43,000. The rent was due an upward review linked to CPI in 2019. The Property Unit who do not seem to keep a record of when rent reviews are due overlooked this. As a result the increase in rent from 2019 of around £4,800p.a. was not implemented. The loss to BPT between 2019 to 2023 therefore amounts to around £19,000.

 

3. The Children Centre is leased to Brent Council. A Report to the Executive a few years ago reported that the agreed market rent would be £11,000 plus a service charge. No service charges have ever been calculated or charged and definitely not paid. While without a calculation the exact loss is unknown I estimate it at £10,000.

 

4. Service charges have not been charged to other tenants in the complex either - once again the exact figure is unknown but another loss of £10,000 is a reasonable estimate.

5. The Accounts for many years have been showing an insurance cost relating to the Barham Park buildings of £2,500. A large proportion of this cost should have been recharged to the tenants in line with normal lease agreements. Once again as the Councilor Officers supposedly supporting the trust have never calculated the recharge the exact figure is also unknown - but I estimate the loss to BPT as another £10,000 to date.

 

6. For a number of years the Council has used the BPT cash balances of around £500,000 or more within its funds. The Council only pays BPT interest of 2%. Interest for some time.  rates started rising a while back and charities could get a rate above 2%. I estimate that BPT could have achieved an average interest rate at 3% in 2021/22 and  probably as much as 4% in 2022/23 if making independent decisions the loss of interest income would therefore be around £5,000 in 2021/22 and £10,000 in 2022/23 - a total of £15,000 over those two years.

 

7. The rent paid by the Council to BPT for the use of the Children Centre should be based on market rents determined by an independent valuer. This has not been done for some time and the £11,000p.a agreed some 10 years ago is clearly out of date. Even if the market rent had risen in line with CPI it should be around £13,000p.a. by now which means that over the last 5 years BPT has lost around £10,000 in extra rent income.

 

8. Letting of Unit 7. This was agreed in over 4 years and Heads of terms issued in February 2019. Council Officers suspended the process while the long winded review of the buildings etc is carried out. Had the matter been dealt with efficiently the Unit would have been modernised and been serving people with Dementia from at least 1 April 2021. BPT has therefore lost 2 years worth of rent worth £4,000. 

 

9. Unit 7 sustained extensive damage through water penetration and wet rot. Some of the repairs required where suspended while Unit 7 was modernised - the cost of this could have been paid for out of the NCIL Grant awarded to Friends of Barham Library. The work will now need to be carried out at some point by BPT and will cost a minimum of £5,000. (as this is a future cost this is not included in the £10,000 at this point). 

 

10. The charges for use of Barham Park for annual Funfairs are covered by a Council wide agreement negotiated by the Parks Department. This was renewed from 13 January 2022 and covers 5 parks including Barham Park. The daily licence fee  was set at £978.16 per operating day in year 1 plus RPIX as determined by the average for the preceeding period from September and August. This suggests a day fee of over £1,000 per operating day in Barham Park in 2022/23. Paragraph 2.2g then refers to "annual 41 day operational fees etc" to be paid in April with and fees for additional operational dates to be payable in September. 

 

This implies that BPT should have received a payment of 41 x £1,000 = £41,000 in 2022/23. As only £36,000 is shown as received (accounts on cash received basis) there is a shortfall of £5,000. It is possible and probably likely that BPT has been underpaid in many of the previous years too. The Licence to Occupy agreement for the Funfairs is poorly written but irrespective of this a detailed review of this needs to be carried as the Funfair Operator may have been under charged not just for using Barham Park but all the other parks in Brent.

 

11. As you know one of the tenants, brought to the table and espoused as being ideal by Council Officers in 2013 built up rent arrears of a staggering £79,000. The Lease terms state that interest on rent arrears would be charged. While there was an 'amnesty' for this for a while during the Covid lockdowns this came to end a long time ago. Officers responsible for managing BPT failed to impose any interest charges on this substantial debt which will not be settled until 31 March 2024. To cover this up and to ensure that BPT had enough cash to meet its operating needs the Council was forced to make an 'advance' to BPT which is some what secretly reflected in the 2022/23 accounts as the £39,000 figure was netted off against the balance of £12k of architects which was charged to BPT without BPT approval. The loss of interest lost needs to be calculated but could be up to £5,000. 

In conclusion the combination of the above issues suggest a combined loss of around £100,000 to the Trust. I have attended many of the BPT meetings over the years. I have tried to express my concerns but was frequently denied the right to speak. I have reviewed most of the Reports and Minutes of BPT meetings since at least 2013 and cannot find and decisions which authorise the following:

1. The payment of £22,000 Architects Fees

2. The forgoing of Rent Reviews and the charging a rent in line with the mutually agreed Lease Terms.

3. Failure to charge service charges in respect of the Children Centre (and to other tenants)

4. Not recharging insurance costs for many years

5. Not to to pay the market rate of interest on BPT cash balances after interest rates started rising substantially.

6. Not to revalue revalue and pay a proper market rent for the Children Centre

7. to accept the loss of rental income by failing  to complete the letting of Unit 7.

8. Not to charge interest on rent arears.

9. Not to charge correct operational fees for use of Barham Park for Funfairs. In fact the issue of funfair fees and impact of using the land in Barham Park is hardly mentioned.

BPT is a charity and Councillors and Officers have a very special duty of care to a Charity under its control. As Trustees and as responsible Officers the duty is to the charity only. This duty includes a fiduciary duty to ensure that the Charity receives all income that is due to it, that it does not incur expenditure that it is not responsible for and has not authorised and that its assets are protected.

In my view, and the evidence presented above I am concerned that the Trustees and the officers tasked to serve the Charity have not fully met that duty.

Call-in on Thursday to hold Brent Council accountable for alleged errors in the Barham Park Trust accounts

The saga of the Barham Park Trust accounts continues on Thursday when the Public Realm and Resources Scrutiny Committee considers a call-in of the Council decision to approve the accounts because of alleged inaccuracies which could lead to reputational damage.

The call-in follows attempts by councillors to query and correct the accounts at meetings of the Trust Committee which is headed by Brent Council leader Muhammed Butt and composed solely of members of his Cabinet. LINK

 

The call-in has been made by opposition members. 

 

Barham Park Trust accounts rubber stamped despite detailed anaylsis revealing many problems with them

 Paul Lorber was refused permission to present this paper on the Barham Park Trust accounts at today's meeting. The meeting lasted less than 10 minutes. Officers said that representations had been dealt with in previous correspondence and the accounts were fine. Cabinet members in the guise of trustees asked no questions and then rubber stamped them.

 

PAUL LORBER'S PRESENTATION

 

The revised accounts for the year 2022/23 are fundamentally wrong and should not be approved. They are inconsistent with previous years, do not reflect the correct income due to the Charity, overstate the Charity expenses and do not provide information in an understandable and clear way that makes review and scrutiny of those accounts easy.

 

I deal with some of the key issue in detail below and summarise the other issues in need of investigation.

 

Rental Income presentation problem (the income is not confidential and can be easily ascertained from past public reports)

 

Excluding the £11,300 rental income from the Children centre, £6,500 from Virgin Media, casual rentals and income from the funfair the Rental Income due from the four tenants occupying the Barham Park buildings is as follows:

ACAVA                                    £43,000

Friends of Barham Library         £7,000

Barham Veterans Club                £3,000

Tamu Samaj                                 £1,500

TOTAL                                       £54,500

 

This income has remained unchanged for some years. According the Officers the Accounts are presented on a Cash “received” basis rather than on the more usual” arrears” basis.

 

This income is shown in the accounts on the line described as “Rental Income – other”

The amounts shown are:

17/18               £50,373

18/19               £52,500

19/20               £51,500

20/21               £51,500

21/22               £50,009

22/23                 £1,625

 

None of the years 17/18 to 21/22 agree with the expected income suggesting that some rents were not collected. The officers may want to explain which tenant did not pay and why or what the discrepancy with the expected £54,500 p.a. is for each of the years.

 

The amount for the year 2022/23 looks very odd compared to all the previous years. The officers claim that the Accounts for the Trust are prepared on a cash basis (i.e. they show income in terms of cash received and payments in terms of cash paid rather than on the traditional accruals basis of showing the income expected to be received in the year with any amount not received shown in debtors.)

 

This explanation does not stand up to scrutiny when you look at the extracts from the minutes dealing with the 2020/21 accounts. Minute 3.5 clearly states “the majority of the rental income for 2020/21 is still outstanding”. If this is so why is the supposedly “cash received” figure for the year showing £51,500 when most of the rental income “has not yet been paid”.

 

The rental income for 2019/20 of £51,500 too is clearly also NOT the “cash received” as note 3.6 below states that at 31 March 2021 …..£76k of the rental income has not yet been received. As ACAVA’s annual rent is £43,000 this means that £33,000 (£76,000 less £43,000) of the amount outstanding as unpaid must relate to 2019/20 – which in turn means that the £51,500 clearly cannot possibly represent the “cash received” in respect of rent in that year.

Extract from 2020/21 Accounts

3.4 During 2020/21 the Trust incurred expenditure of £96,283 on maintenance of the building complex and the park. This is made up of £60,383 of unrestricted funds expenditure and £35,900 of restricted funds. The Trust generated £81,300 receipts from rental income and interest earned.

3.5 This includes rental income that is due but has not yet been paid. The majority of rental income for 2020/21 is still outstanding. The cumulative rental income due but not paid as at 31 March 2021 was £76,291.

3.6 This means that as at 31 March 2021, the Trust had assets of: (i) £58k unrestricted funds cash (ii) £353k restricted funds cash (iii) £76k rental income due but not yet received (unrestricted funds) (iv) £939k valuation of Barham Park Building Complex

3.7 This means that if the rental income arrears are not received, the Trust would have only £58k of unrestricted cash. If the arrears continue building up, the £58k would be enough to cover around 12 months of maintenance and wardens costs.

 

CONCLUSION

 

The Accounts for all years to 2021/22 have been produced on an accruals basis (they show the rent due and not the cash income received).

 

The revised 2022/23 Accounts presented to you on Tuesday 25 September 2023 are wrong as they are being presented on an inconsistent and a totally incomprehensible basis.

 

The 2022/23 figures are attempting to show some form of ‘cash basis’ whereas the comparative figures for 2021/22 are clearly on the correct accruals basis.

 

Even if officers were correct to present the 2022/23 on a cash received basis to make the accounts consistent and for them to make sense they would have to revise the 2021/22 comparatives to a cash basis too.

 

IT MAKES NO SENSE

 

In terms of the size of its transactions the Barham Park Charity should prepare its accounts on an accruals basis as in relation to rental income the accounts would show the rents due in the year and any amounts uncollected/owing would be shown as a debtor and any rents paid in advance/prepaid would be shown as a creditor.

 

This makes it straight forward to make comparisons between the years in respect of both income and expenditure figures making it easy for Trustees and 3^rd party observer to see the trends between years and ask questions if unusual variations arise.

 

OTHER ISSUES

 

Various reports claim that the Council provides the Barham Park Charity with a subsidy. This cannot be substantiated because none of this is reflected in the Barham Park Trust Accounts.

 

Charity Commission Guidance covers this issue:

 

CHARITIES SORP (FRS 102)

 

Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK

 

Accounting for donated facilities and services, including volunteers

6.13. If a charity is given facilities and services for its own use which it would otherwise have purchased, these must be included in the charity’s accounts when received, provided the value of the gift can be measured reliably.

6.14. Measuring donated services using fair value would not be practical as such services cannot be resold and the use of fair value may result in an overstatement of the value of the donation to the charity. Donated facilities and services are therefore measured and included in accounts on the basis of the value of the gift to the charity.

 6.15. Value to the charity is the amount that the charity would pay in the open market for an alternative item that would provide a benefit to the charity equivalent to the donated item. Value to the charity may be lower than, but cannot exceed, the price the charity would pay in the open market for the item. Accounting and Reporting by Charities Page 62

6.16. Donated facilities and services that are consumed immediately must be recognised as income, with an equivalent amount recognised as an expense under the appropriate heading in the statement of financial activities (SoFA).

6.17. Facilities such as office accommodation or services supplied by an individual or an entity as part of their trade or profession can usually be reasonably quantified and must be included in a charity’s accounts.

6.18. Charities often rely on the contribution of unpaid general volunteers in carrying out their activities. However, placing a monetary value on their contribution presents significant difficulties. For example, charities might not employ additional staff were volunteers not available, or volunteers might complement the work of paid staff rather than replace them. These factors, together with the lack of a market comparator price for general volunteers, make it impractical for their contribution to be measured reliably for accounting purposes. Given the absence of a reliable measurement basis, the contribution of general volunteers must not be included as income in charity accounts.

6.19. However, it is important that the user of the accounts understands the nature and scale of the role played by general volunteers. Charities must include a description of the role played by general volunteers and provide an indication of the nature of their contribution in a note to the accounts

 

WHAT DOES THIS MEAN?

 

If substantial – and the Council implies this by always refering to providing the Barham Park Charity with a subsidy – the services provided by the Council to the Charity must be valued and shown both as Donated Income on one side and ‘deemed’ expense on the other.

 

While the net impact is £0 any reader of the accounts become aware of the true cost of managing the Charity.

 

NETTING OFF OF INCOME AND EXPENDITURE?

 

Do the trustees know or understand what the figure described as cash advance” of £27,092 represents?

 

According to the report the £27,092 is actually a net figure made up of the remaining balance of rent owed by one of the tenants of £39k offset by an unpaid consultancy fees of £12k due to the Architects for their recent work on the ‘hypothetical’ project.

 

It is described this way in the Report:

3.11 As at 31 March 2023, the Trust had a rental debtor of £39,625 and a £12,533 payment that was due but not yet paid. These have been recognised as debtors and creditors on the Council’s side and the Council gave a net £27,092 cash advance to the Trust in order to aid the Trust’s cashflow position and avoid a detrimental effect of outstanding debt on the Trust’s financial position. In 2022/23 the cash advance has been reported on a separate line in the income section to aid transparency. The Council has also paid interest to the Trust on the cash advance. The Trust continues liaising with tenants and expects all arrears to be cleared by March 2024.

 

In my view the netting off of these two figures and their presentation is wrong. Income should be shown in the Income section and the Expense in the Expense section. More importantly it hides the fact that £12,533 of consultancy costs on top of the £8,711 already shown in the accounts (Total £21,244) – and there may be more paid and charged in 2023/24 to the Barham Park Charity when they should NOT be.

 

The treatment of the estimated costs of £25,000 for the architects working on the recent Barham Park vision study was agreed and confirmed at the Trust Meeting of 27 January 2022. This is what the minutes say:

Having authorised officers (in September 21) to prepare a financial strategy in respect of the Trust, approval was now being sought to the appointment of an architect in order to lead development of a more holistic options appraisal relating to the feasibility of improvements to the buildings comprising the Estate and impact on current occupation uses and tenancies.  The cost identified for the architectural services required had been £25,000 which it was proposed to fund from the Council’s Capital Programme rather than directly by the Trust, given the existing commitments on its available restricted and unrestricted funds.

 

CLEARLY AN ERROR IN THE 2022/23 ACCOUNTS

 

If it was agreed to charge the Architects cost to the “Council’s Capital Programme” why are £21,244 of the costs charged to the Barham Park Charity in its 2022/23 accounts.

 

The Charity’s surplus for the year and its unrestricted funds are clearly being reduced by this substantial amount.

 

The 2022/23 Accounts are therefore materially wrong on this point alone and need to be corrected.

 

OTHER CUMULATIVE ERRORS IN THESE ACCOUNTS

 

I will just list a few issues here that need investigation, should concern the Trustees and should lead to more questions.

1.      The Barham Park Charity has been deprived of correct Interest Income. The amount paid to it by Brent Council for the use of over £500,000 of cash balances does not represent a fair arms length price. I estimate that in the current year The Charity has been deprived of at least £5,000 of extra income and the amount will be at least double that if this is allowed to continue.

 

2.     The so called ‘arms length’ rent paid by the Council to the Charity for the use of the former Children Centre has not changed for years. As the sub lease has expired a true market rent should be charged each year. The Council has failed to follow correct procedures in ensuring that an ‘arms length rent’ is paid.

 

3.      It is also not clear why the Children Centre is not paying service charges for services such as refuse collection, water etc that it receives. There is no reason why the Charity should be paying for this.

 

4.     There has been a failure to implement rent reviews due some years ago. The cumulative cost of this failure runs into tens of thousands of pounds in lost rental income to the Charity.

 

5.      The Charity has had a benefit of NCIL Grants to upgrade the QE II Silver Jubilee Gardens and the Pond in the Park. The value of these Grant is well in excess of £100,000. The accounts for the current and previous years for failing to reflect both the Grant Income received and the expenditure on which the Grant was spent on.

 

6.     The Accounts fail to show enough detail in relation to the expenditure line of “maintenance and wardens”. This heading includes some expenditures which have nothing to do with maintenance and include items which should be included in the lines – including utilities, waste disposal etc. Without this information the Trustees and others cannot be certain if some of these costs should not have been recharged.

7.      

Why is the Charity incurring an insurance charge of £2,500 – should not some or all of this have been recharged?

 

Conclusion:

 

I have tried to engage with Council officers to highlight these issues. My views and concerns have been ignored. As a result the revised Accounts as presented are fundamentally wrong.

 

1.     They are prepared on the wrong and inconsistent basis.

 

2.     They do not comply with acceptable accounting policies as advised by the Charity commission.

 

3.     The figures are wrong.

 

4.     They understate the Charity’s Income

 

5.     They overstate the Charity’s expenses

 

6.     As a result of 4 & 5 above they understate the net worth of the charity (its net assets).

 

These accounts should NOT be approved or submitted to the Charity Commission in their current state.

 

Councillor Paul Lorber

25 September 2023