Brent Council and Cara Davani – The Last Post...(and, How much should the Council expect to pay for a bucket of whitewash?)

Cllr. Muhammed Butt and Cara Davani
(from a Brent Council photograph celebrating International Women’s Day, March 2015)

Guest post by Philip Grant (please note as this is a long article it has been posted with a continuation page. Click at the end of the article to read all.

On 5 December 2017, three hours before the start of an Audit Advisory Committee meeting, Brent Council’s auditor issued his decision letters on the objections against its 2015/16 accounts over the payment of £157,610 to its former HR Director, Cara Davani. I will ask Martin to attach a copy of the decision letter I received, so that it is in the public domain for anyone to read if they wish to. READ IT HERE

In summary the auditor decided that the payment was not unlawful and that he would not issue a Public Interest Report over the issues the objectors had raised. He did, however, say that ‘there are a number of governance areas that we consider that the Council should strengthen’, and made several recommendations, mainly over keeping formal written records of legal advice given and of meetings (a familiar problem at Brent!).

I am sure that the auditor believes he exercised his professional judgement properly in coming to his decision. According to his “progress report” ahead of the 5 December meeting, he had also submitted his ‘statement of reasons on the objection’ to his Regulator, PSAA (Public Sector Audit Appointments Ltd, a wholly owned subsidiary of the Local Government Association) for comment.

Maybe I am a “loser” who finds it difficult to accept that he was wrong. But I can’t help feeling that I, and the four other local people who objected to the £157k payment, have been let down by a system which is meant to ensure that local electors can challenge the potential misuse of funds by their Council through a ‘fair and impartial process’. I cannot change the auditor’s decision, but I can set out why I think it was wrong. 

At the heart of the objections were two decisions, both made by the then interim Chief Executive, Christine Gilbert. One, in May/June 2015, was to make the £157,610 leaving payment to Ms Davani. The other was not to take disciplinary action against Ms Davani in September 2014, and I will look at how the auditor dealt with that decision first.

Decision not to take disciplinary action against Cara Davani following the Rosemarie Clarke Employment Tribunal judgment in September 2014:

In the course of his “Findings”, the auditor says:

‘I conclude there is nothing to persuade me that this decision was not within the range of broadly reasonable decisions open to the Council.’

In fact, as all five objectors had pointed out to the auditor, the decision was not even ‘broadly reasonable’; it was so unreasonable that no reasonable person, or Council, in possession of the facts could have made it. The auditor had started his paragraph by saying:

‘Whether or not disciplinary procedures against Cara Davani should have been taken following the Employment Tribunal judgment was a decision for her line manager, Christine Gilbert, having regard to internal policies and guidance and taking account of the facts leading up to, and arising from, the hearing. We have been informed there is no documentation recording the decision on this.’

One of my fellow objectors, with experience of employment matters, had told the auditor that the evidence of Ms Davani’s actions in the judgment was ‘sufficient …to justify any reasonable employer to summarily dismiss Ms Davani for gross misconduct.’ The auditor had been given first hand evidence of Carolyn Downs, Brent’s current Chief Executive, admitting privately to the objectors in December 2016, that the Council should have taken disciplinary action against Ms Davani in September 2014, and that if she had been Chief Executive in those circumstances, it would have done.

The auditor had also been shown that Brent’s own Disciplinary Policy and Procedure documents made it clear that if an employee is found to have committed "gross misconduct", this will normally result in dismissal. The types of action by an employee 'which would result in disciplinary action for gross misconduct', as set out  in those documents, included four examples of actions by Ms Davani, made as findings of fact by the Tribunal in its judgment.

Because Christine Gilbert had not kept to Brent’s own policies and guidance when deciding not to take disciplinary action, it was pointed out to the auditor that she had also shown a number of the examples of actions which could have resulted in disciplinary action against her for gross misconduct. So why had she not taken the proper action against Cara Davani, and why was there ‘no documentation recording the decision’?

My submissions to the auditor in August 2017 gave the reasons why, but his decision letter dismisses these, merely saying: ‘whilst I have noted your allegations, I have not seen any supporting evidence.’ I had provided evidence, including text from a written statement made to me in 2016 by a “Civic Centre insider” who was involved at the time, alleging that Ms Gilbert and Cllr. Muhammed Butt had considered the matter in isolation, that they were actively protecting Cara Davani, and that they communicated over it through their private email accounts so that there would be no documentary evidence in the Council’s records.

I had to keep the name of the “insider” secret, as that person did not trust their allegations would be properly investigated, and feared the possible personal / career consequences of having their identity disclosed. I accepted that this meant their evidence was only “hearsay”, but in the absence of any documentary evidence from the Council, their evidence on the matter was also “hearsay”, so why was their version preferred?

Decision to pay Cara Davani £157,610 as “compensation for loss of office” in 2015:

The auditor concludes his “Findings” on this point by saying:

‘There was nothing in the documentation I have seen to indicate that any amounts paid to Cara Davani were unlawful.’ 

He had seen the original documentation held by Brent Council from May and June 2015 in relation to this payment, and received representations on it from the Council, but had not allowed me or the other objectors to see it.

I have already covered the reasons why this ‘material information’ could and should have been shared with us, so that we could comment on it fully, in a previous guest blog LINK . The information included not only legal advice, but also other correspondence and documents which would have set out what information was given to the QC, and what was not, on which the advice the Council relied on justify the payment was based. It was made clear to the auditor that it was impossible for us to support our objections properly without sight of that information.

The auditor’s response to this, in the “Background” section of his decision letter, was:

‘I am satisfied that the provisional views letter sent to you on 3 August 2017 read with the Audit Committee minutes and Conrad Hall’s letter dated 14 December 2016 gave you sufficient information in order to have provided comments to me, such that there has been no unfairness in not sharing the advice.’

In effect, he is saying that the primary documents are not ‘material information’, but that the interpretation of those documents given to him by a Brent Council officer is, and that it:

‘… contains the material facts on which we have relied upon when reaching our decision. For this reason and given that the Council has not waived its legal professional privilege, I have not shared the actual documents containing or recording the legal advice with you.’

In other words, the auditor has reached his decision based on what Brent Council has told him, and has not shared with the objectors any actual documents related to the payment we objected to because Brent Council did not want him to. I am sure any reasonable person will understand why I believe that the process by which the auditor reached his decision was neither fair, nor impartial.

As the auditor would not allow us to see the “material documents”, the objectors had to make their “further comments” on the best information available to them. In his “Background” section the auditor said:

‘Following the Employment Tribunal above, there was a breakdown in trust and relationships between some Members of the Council and Cara Davani.  … This was considered to be an ongoing reputational risk to the Council and that it was difficult to see how Cara Davani could be effective in her role as Human Resources Director, working with Members, going forwards.’

The reputational damage had already been done in September 2014, with the facts about the appalling treatment of Rosemarie Clarke by the Council and Cara Davani receiving wide publicity after the Tribunal judgment was published, and by the failure to take disciplinary action against Ms Davani. Given the situation described, why was nothing done about it until May 2015? My comments gave the auditor evidence of why – showing that Ms Davani was being “protected” by both Christine Gilbert and Cllr. Butt – but that by May 2015 the Council was selecting a new permanent Chief Executive, so that Ms Davani would soon lose that joint protection.

The auditor’s view of the prelude to the “settlement agreement” objected to, following on from the passage quoted above, is described as follows:

‘Meetings took place between the Leader, Chief Executive and various Members to try and resolve the differences but relationships did not improve.  We understand these meetings did not have minutes taken. Following discussions between the Leader and the Chief Executive, it was determined that it would be in the best interests of the Council if Cara Davani and the Council parted company and that legal advice should be sought on possible ways forwards.’

It does not appear that any documentary record exists of those discussions, but the next step is set out in the auditor’s “Findings” as follows:

‘Legal advice was sought in May 2015, which concluded the Council did not have a case to conduct a fair dismissal, noting that Cara Davani had informed the Council that she would take the Council to an Employment Tribunal for unfair dismissal if her employment was terminated.   Given no disciplinary procedures had previously been taken in respect of the findings from the Employment Tribunal, in these circumstances and given the legal advice obtained, it does not appear unreasonable for the Council to decide to proceed with a settlement.’

The ‘legal advice’ referred to was contained in an undated note, made by the Council’s Chief Finance Officer (why was the Council’s Chief Legal Officer, a solicitor, not involved?) about a discussion between Christine Gilbert and a QC, which he had been the only other party to. It was apparently not checked for accuracy by the QC who gave the advice, given the auditor’s recommendation that such advice ‘should be recorded formally immediately after the call and key issues confirmed with the legal adviser.’

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Brent revises process for dismissal of Chief Excutive & other senior officers

Cabinet will be asked to adopt new procedures and changes in standing orders at their meeting on June 22nd regarding the dismissal of senior staff, including the Chief Executive.  Other staff to whom it applies are the Chief Finance Officer and the Monitoring Officer.

In 2012 the then Brent Director of Finance, Chris Heaphy, was suspended over gross misconduct allegations( later withdrawn) shortly after Chief Executive, Gareth Daniel was ousted by Muhammed Butt. LINK

The proposal institutes a Dismissal Advisory Committee which includes'independent persons':

The Council will be required to invite independent persons to form part of a panel in the following priority order:

·      an independent person who has been appointed by the Council and who is registered as a local government elector in the borough of Brent;

·      any other independent person who has been appointed by the Council;

and

·      an independent person who has been appointed by another council or

other councils.

The Council has appointed one independent person to deal with Member Code of Conduct complaints but the 2015 Regulations explicitly allow theCouncil to utilise independent persons appointed by other councils.

This is why it is proposed that the Chief Operating Officer be authorised to explore the possibility of sharing independent persons appointed by other councils with a view to establishing a pool of 5 independent persons from which 3 can be selected to form a panel

Such a shared system may be a more cost effective and efficient use of a limited number of independent persons.

The Chief Operating Officer, who wrote the report, is Lorraine Langham, late of Ofsted and Tower Hamlets.

Apart from concerns that might arise from the above, there is an Alice in Wonderland feel about the flow chart.

In the top half of the chart you will see that action (or a decision not to act) is in the hands of the General Purposes Committee. The GPC consists of 7 Labour Cabinet Members and one Conservative opposition member.

In the bottom half you can see that the GPC notifies the Cabinet. In effect this is the 7 Cabinet members plus one Tory notifying 8 Cabinet members (Cllr Mashari is added to the 7).

They then have a kind of internal debate with themselves where they might object as Cabinet and reconsider as GPC, before the Dismissal Advisory Panel comes into play...

The Council will be asked to formally approve the appointment of Carolyn Downs as Chief Executive and Head of Paid Services with effect from September 7th 2015 LINK

Rotten Boroughs features Brent Council's HR & CMT Scandal

Brent's Corporate Management Team - looking after each other

Brent Green Party and Brent Trades Union Council in their calls for an independent investigation into Brent Council have included an investigation into previous business and employment relationships of senior officers.

Christine Gilbert is an ex-Chief Executive of Tower Hamlets Counci and ex-chief of Ofsted. She became Interim Chief Executive of Brent Council following the row between Muhammed Butt (who had ousted former leader Ann John) and the then Chief Executive Gareth Daniel.

Daniel evetually left with a payment of £200,702.

In the course of the row three members of Brent's Corporate Management Team had written in Daniel's defence.

Clive Heaphy,  Chief Finance Officer of Brent Council, formerly Interim Director of Finance at Ofsted  employed Cara Davani on a £700 a day contract as Interim Head of HR. She was previously Director of Human Resources at Tower Hamlets Council and had worked as a consultant for Ofsted

Cara Davani was originally contracted with Brent Council by Heaphy, and her fees paid through Cara Davani Ltd., although the Brent Audit investigation found no written contract existed. Davani's initial engagement was from March 2012 to 31st October 2012.

Cara Davani drew up Christine Gilbert's contract which included payment into her private companty Christine Gilbert Associates in September 2012. She earned £100,000 in six months and later took up an additional job in Haringey. LINK

Clive Heaphy who had been suspended in August 2012 as Chief Finance Officer of Brent Council on grounds, later withdrawn, of gross misconduct, left the Council shortly after Daniel's departure and the day before Christine Gilbert's appointment as Acting Chief Executive. She took up the post officially on November 5th 2012.

Heaphy left with a payment of £140,508.

Fiona Ledden, Head of Legal and Procurement, wrote the report that recommended to the Council that Christine Gilbert continue as Interim Chief Executive until after the 2014 local elections.

Fiona Ledden prevented me from speaking to Brent Council on the issue of the appointment of a permanent Chief Executive. Correspondence about whether she was correct in that decision continues.

Christine Gilbert will continue as Interim Chief Executive during the Autum and Spring according to Muhammed Butt so that she can work on the new Borough Plan.

A  recruitment process for a permananent Chief Executive will begin in 2015.

Eric Pickles urged to investigate Brent Council over handling of fraud allegations

Ex-union activist Nan Tewari has written to Eric Pickles, Secretary of Stae for Communities and Local Government, raising a number of issues concerning the handling of allegations that Cara Davani, Brent's Director of Human Resources misused her Brent Council Oyster Card.  The letter is written at a time when Brent Council has dismissed 11 workers over alleged serious breaches of financial regulations and the staff code of conduct.LINK

In the long and detailed open letter Nan Tewari states:

Now after more than a year later [after the initial investigation of the Oyster card issue], it appears that there is only a draft internal audit report of the investigation in existence. Why was the report never finalised? Might it be because the treatment of Ms Davani has been unduly lenient in comparison with others and would therefore not stand up to scrutiny? The audit committee minutes of March 13 notes that it was highlighted that 18 cases of internal fraud were found, resulting in five dismissals and 10 resignations before action could be taken. Ms Davani presides over, and advises on these very disciplinary and dismissal cases and it is difficult to see how her position can remain tenable given what she has done. She is at the head of the council's workforce and as such must be an exemplar of the highest standards of behaviour expected of every person employed to work in the council or provide services to it.

The internal audit report, which is available below, was written about a period of considerable turmoil  in the Council and tensions in the relationship between officers and leading Labour politicians. Following Muhammed Butt's election to Labour and Brent Council leadership, in succession to Ann John,  disagreements developed between him and Gareth Daniel LINK , Chief Executive, which eventually led to Daniel leaving his post. Members. The CMT (Corporate Management Team, had written a letter in support of Daniel.  Fiona Ledden, now head of Legal and Procurement stepped in as Interim Chief Executive.

The audit report is heavily redacted but gives a picture of events. CMT is Corporate Management Team. XXXX indicates redaction.

Brent Council pay-offs revealed

Gareth Daniel - pay-off better than a game of conkers

Brent Lib Dems have revealed 'the compensation for loss of office' sums awarded to former Chief Executive Gareth Daniel and former Director of Finance Clive Heaphy as £200,702 and £140,508 respectively. Gareth Daniel went after a row with Muhammed Butt, leader of the council and Clive Heaphy went following his suspension pending investigation of allegations of gross misconduct which were later withdrawn.

 The figure for exit packages breaks down as follows:

• 2010/11 – £3.502 million
• 2011/12 – £4.366 million
• 2012/13 – £2.311 million
• TOTAL – £10.179 million

The Lib Dem claim that  if it was managed more effectively this money could have helped keep closed libraries open, fix potholes and clean streets.

Gareth Daniel did not do as well as his predecessor George Benham. Benham got £700,00 compensation (including a car)  in 1998 when Daniel, then an ex-GLC left-winger, was installed in his place.

The background to Brent's 2013-14 budget

Mike Bowden. Assistant Director of Finance for Brent Council, gave a PowerPoint presentation to the Budget and Finance Overview and Scrutiny Committee on Thursday setting out the background to Brent's 2013-14 Budget. This does not appear to be available on the council website so I have extracted some of the key points below.

For clarity any explanations or comments from me are in italics (ie words in italics are not Mike Bowden's responsibility).

BUDGET MONITORING 2012/13

• Quarter 1 forecast was overspend of £2m
• Latest forecast is small underspend of £0.1m
• Departments are on track to deliver within budgets
• Need strong foundations to manage risks from 2013/14 onwards (this implies radical actions including cuts and possibly council tax rise)

 NON-EARMARKED RESERVES

Target for 2013/14 of £12m

• Reserves at 31/3/12                £10.3m
• Budgeted increase 12/13           £1.0m
• Projected increase in 13/.14       £0.7m

External audit - acknowledged improved financial resilience and recommended that we should should continue to build level of reserves (It was revealed more than a year ago that Brent had some of the lowest reserves in London and Audit Commission followed this up with recommendation for increase)

BUDGET GAP:

Medium Term Financial Projections:

• 2013/14      (£0.2m)
• 2014/15        £2.5m
• 2015/16        £7.5m

BUDGET GAP - July 2012

Assumptions for 2013/14 included

• Council tax increase 3.5% (it now looks as if Eric Pickles will trigger local referenda for any increase over 2%. Any rise will impact on the poor as well as meaning more people default on payment)
• Existing planned savings of £7m are delivered
• Cost avoidance included through one council projects
• New Council Tax Support Scheme would meet shortfall in Council Tax Benefit Funding (scheme going before Special Council Meeting on December 10th)

UPDATE ON 2013/14 BUDGET

• Government Autumn Statement will not now  be delivered until 5th December 2012
• Provision Local Government Settlement will not be known until 20th December 2012 ?? (subject to confirmation)
• Impact on council's  decision making timetable
• Government's regular announcements - uncertainty over true impacts

Developments

• Council tax free - New one off grant offered by Government
• Top -slicing - EIG (Early Intervention Grant) £4m (includes provision for 2 year olds but see Muhammed Butt's statement LINK) Academies£7m (partly to council and partly to schools)
• Census - £4m (due to increase in Brent's population but it is not certain we will get it)
• Council Tax Surplus - £1.8m (one-off) (Council more successful in collection this year - uncertainty that will continue after council tax benefit changes and increasing economic pressure on families).

Uncertainties and risks

• Further changes by central government
• Housing Benefit subsidy regime/Temporary Accommodation (shift of costs of housing crisis to local government)
• One Council Savings (presumably whether they are successful)
• Review of pressures (housing, adult and children's social care)
• Opportunities for additional savings  (I interpret this as 'What's left to cut without causing damage or merely shifting pressures within the council's budget)

COUNCIL TAX

Temporary council tax freeze spending:
2011/12   £2.6m for 4 years
2012/13   £2.6m for 1 year
2013/14   £0.8m for 2 years

Ongoing income foregone of 3 year tax freeze = c£7m per annum (what will lost if council puts up Council Tax. Previous reports by Clive Deaphy (ex Director of Finance) referred to the need to strengthen the council's Council Tax base)

KEY ISSUES FOR 2013-14

• Late settlement = decision making later than usual
• Need to maintian focus on long-term position > Recognise that funding will continue to diminish > Fundamental change to Council's approach and services required (this again implies cuts, decision to no longer deliver some services, more out-sourcing etc. Bowden commented that a 'resilience budget' was required and the council needed to ensure that short-term decision did not affect long-term prospects)
• Flexible approach to ensure capability to withstand risks
• Opportunities for tactical savings that do not undemine future prospects
• New commitments to be funded by offsetting savings

______________________________

Readers will see that there are plenty of issues to raise questions about here and hence the public's disappointment at the Scrutiny Committee that councillors failed to ask searching questions. Labour councillors had probably been briefed already so thought it unnecessary to question in public. Conservative councillors did attend and Lib Dem Alison Hopkins was in the chair.  However Cllr Brown did not attend and nor did his Lib Dem alternates Cllr Green or Lorber. There were no questions about how the compressed timetable would now include consultation with the public, community organisations and trades unions. Councillors asked only one question of Muhammed Butt who, along with Cllr Ruth Moker, specifically attended to answer questions after Bowden's presentation.

BUDGET DECISION MAKING TIMETABLE

Before funding announcement:

19th November - Full Council - first reading debate

10th December  - Executive - council tax surplus

10th December -  Special Council - council tax support scheme

After funding announcement

22nd January 2013 - General Purposes Committee - Council tax base - business rate base
5th February - Budget and Finance Overview and Scrutiny Committee

11th February 2013 - Executive - council tax level recommendation
25th February 2013 - Full Council

Clive Heaphy leaves Brent Council voluntarily after gross misconduct allegations withdrawn

Clive Heaphy, former Brent Director of Finance, has written to me to draw my attention to the fact that he is no longer suspended. I am happy to put the record straight.

Brent Council has issued the following statement:

The Council wishes to announce that the allegations of gross misconduct against its Director of Finance and Corporate Service, Clive Heaphy, have been withdrawn.

Mr Heaphy has decided, however, to voluntarily leave the Council's employment to pursue other career opportunities.

 

What's happening with Brent's 2013-14 budget?

Brent Expenditure and Income 2012-13

The Council Budget for 2013-14 should be on the agenda for the Full Council Meeting on November 19th according to the Council's budgetary process:

There is a Full Council meeting (usually in November) where the budget is raised as an issue. All Councillors of all political groups are invited to submit ideas, plans and suggestions for inclusion in the next year's budget. These suggestions are then taken away and discussed by the Executive (usually in December).

The Executive will then issue their proposals for the budget.

At the same time Scrutiny's Budget Panel is sitting and they also come up with their proposals by February. The report is considered by the Executive and, if required, changes are made to the proposals.

Finally, the proposals go to another Full Council meeting where they are voted on, and, whatever is agreed, is implemented as the council's budget for the next year.

However, there are reports that the Council is behind with the process this year perhaps as a result of changes in the officer and councillors involved in Finance.  By the second week in November last year Cllr Ann John had issued a 'Bad News' budget report LINK.

Is is likely that we will receive an 'Even More Bad News' report from Muhammed Butt soon. There has been no word from Cllr Ruth Moher, now Lead Member for Finance and Resources who took over the post from Butt following the 'coup'.

Meanwhile the Budget Overview and Scrutiny Committee on Thursday 15th November may give us some clues. What is beyond doubt is that with government grants reduced and pressures on council spending from homelessness and social care of the elderly the situation will be dire. Apart from the potential revenue from a rise in Council Tax (a tiny proportion of the overall budget which is mainly made up of government grants) there are few options open to the Council apart from making more cuts which will impact on the vulnerable, or taking a stand against the Coalition and devising a campaigning needs led budget and a consequent deficit budget.  

This would involve a real dialogue with trades unions, voluntary organisations, community groups, campaigning groups and residents. Time is limited and such  process should begin as soon as possible.

Background is provided by the mid-year Brent Treasury Report by Mick Bowden, Deputy Director of Finance. The Director of Finance, Clive Heaphy remains suspended and there is no word on the financial settlement for Gareth Daniel, the former Chief Executive.

The Report outlines theCapital Finance Requirement (CFR) requirements for the years ahead with a significant  increase next year:
 

	31/03/12 Actual	31/03/2013 Estimate	31/03/2014 Estimate	31/03/2015 Estimate
CFR	£537m	£598m	£594m	£591m

 At the same time there is a significant  forecast reduction in 'usable' reserves:

	31/03/2012 Actual	31/03/2013 Estimate	31/03/2014 Estimate	31/03/2015 Estimate
Usable Reserves	£58m	£37m	£30m	£24m

There has been a shift from short-term to long-term borrowing which remains under the limits set out by the Department for Communities and Local Government. An additional £20m has been borrowed since April 2012 and a rise in the rate of interest:

Borrowing	Balance on 01/04/2012	Debt Repaid	New Borrowing	Balance on 30/09/2012
Short-term	£26.3m	£44.3m	£18m	0
Long-Term	£405.5m	£1.2m	£20m	£424.3
Total	£431.8m	£45.5m	£38m	£424.3
Average Rate %	4.45%			4.71%

The Report states that the Council expects to recover £4m of the £5m inested in Icelandic domiciled banks and £9m of the £10m invested in non-Iceland domiciled banks. The Council's investment income this year is estimated at only £0.1m .

The full Mid Year Report is available HERE



 

Clive Heaphy spoke out on Brent school victims of IT scams

Yesterday I tweeted about Brent schools being featured on Panorama's 'Reading, Writing and Rip-offs' last night. This was based on a circular from the council to headteachers.

In fact Brent weren't mentioned as such but Brent schools have had similar experiences, although not as expensive as some reported.

Clive Heaphy  Brent Director of Finance (since suspended while allegations of gross misconduct are investigated) spoke to the Times Educational Supplement about it earlier this year and reported on this blog LINK

Furness Primary is being sued by a finance company for £301,083 plus interest calculated at £14,579 in April and still rising. But Brent Council said the equipment involved was worth just £9,150 when it was sold off by the finance company in February.

Kensal Rise Primary is being sued by the same company for £287,000. Both schools have made counterclaims for money they say they have already paid “in error” - £805,000 in the case of Kensal Rise. The same school has also received a more recent claim from a second finance company for £253,000.

Brent says schools have been tempted into such deals by offers of up to £15,000 “cash back” a quarter from equipment suppliers that make initial lease repayments appear more favourable than the real long-term cost. Clive Heaphy, the authority’s finance director, said that primary heads were not always “business savvy” and cannot always “see through” such offers.

Given the political disagreement about academies Heaphy was very clear with his warning:

 “Inevitably there is a recipe there for difficult times ahead and potentially for some mismanagement issues and possibly some fraud issues,” he told TES, adding that increased autonomy for local authority schools had already made it much harder for town halls to guard against them misusing public money.

“I still retain personal accountability for schools’ finances and yet I see less and less data and have fewer and fewer levers to be able to do anything about it,” Mr Heaphy said. “There is very little action in reality you can take.”

On academies he said: “The only watchdog over them is the Department for Education itself. We have no relationship with them, but who does?”

 

Lively Brent Council conference expected tomorrow

People are getting in touch with disbelief about the latest turn of events in Brent and asking what's the suspension of Clive Heaphy. I don't know what the specific allegation is but gross misconduct has to be pretty serious. Things such as racism, sexism, misuse of IT systems, major breaches of confidentiality would all be covered but it could be something quite technical. Remember these are only allegations and the council has a duty to investigate to see if they have any basis. Suspension is a neutral act while an investigation takes place and doesn't imply guilt. The same applies in the case of teachers and headteachers.

Meanwhile the Brent Executive and Senior Officers and Managers have a conference tomorrow which was arranged long ago. It should be interesting. Any flies on the wall should get in touch!

Brent budget making process threatened by suspension of Director of Finance

The news that Clive Heaphy, Brent's  Director of Finance has been suspended while allegations of gross misconduct are investigated deals a further blow to Brent's budget making process that takes place at this time of the year.

A Brent Council spokesman said the allegations were not related to financial irregularities and Cllr Muhammed Butt, leader of the council, said, "Suspension is a neutral act and does not imply guilt in any way. When allegations are made, you have to follow them up and that is exactly what we are doing."

Brent Council warns governors on headteachers' pay and procurement

Brent Council has written to governors, clerks to governor bodies and school leadership teams warniong them of the need to comply with regulations on the pay of headteachers.

Clive Heaphy, Director of Finance and Corporate Services, wrotes that the Council's recent survey has:

...revealed that a significant proportion of (Brent) Governing Bodies have approved salaries for head teachers that exceeds the levels permitted by the school's head teacher group as defined by the school's pupil numbers...

He goes on to say that schools that have set an Indiivudal School Range above the headteacher groups are:

 ...on average remunerating headteachers in excess of an additional 10% per annum - much more in many cases. While some schools have provided acceptable reasons for paying above the cap, the review has demonstrated that a large number of Governing Bodies have allowed incremental increases in head teacher pay either without good reasons or  factors outside the  criteria set out in the School Teachers Pay and Conditions guidance.

 Heaphy says if the Governing Body becomes aware that this is the situation it is incumbent on them to take appropriate action to remedy the situation within a reasonable period of time.

He concludes:

I apologise if this letter is direct but the situation within Brent schools is a serious one and I need to be sure as the person ultimately responsible for all school spending in the Borough, that Governors, Clerks and Leadership Teams are fully aware of the framework under which you operate.

Last week Heaphy and the Brent Audit Team experienced close questioning at the Children and Families Overview and Scrutiny Committee over this issue and the problem of excessive and exploitative procurement and leasing agreements entered into by schools.

Clive Heaphy frankly told the meeting that he was not confident of schools' capacity to take action on these issues. Stating that he was 'not happy with the state of things'  he said he would continue to put pressure on schools.In future he would be requiring local authority schools to make an annual return on headteacher pay. Brent had no statutory authority over academies or free schools.

Cllr Michal Pavey asked if this amounted to a admission that before these actions the authority's monitoring had been 'inadequate'. Heaphy denied this stating that other local authorities, uncovering similar issues, were coming to Brent for advice. Lesley Gouldbourne for the teacher associations welcomed the 'very full' report given to the Committee and congratulated the council on its proactive approach. She warned if the impact of financial mismanagement on both on schools' reputations and on taking money away from children's learning resources. Gouldbourne asked for more resources to be devoted to auditing but Cllr Mary Arnold (lead member for Children and Families) said Brent already devoted more hours to school audits than other boroughs.

Several councillors declared an interest at the beginning of the meeting as they were governors of various schools in the borough. Cllr Michael Pavey was particularly forensic asking if the headteacher's responsibility to advise governors on the regulations about headteacher pay was not in itself a conflict of interest.

It emerged that no secondary school and only half of Brent's primary schools now use Brent Council's  in-house payroll system and so early clues to over-renumeration could not be spotted through HR officers' monitoring when glaring discrepancies, such as a head of a small school being paid more than the head of a much larger one, became apparent.

Additionally in the Copland case, as a  grant maintained school it had appointed its own auditors and checks had been much less in-depth than those of the Brent Audit Team. The Copland case, involving additional payments, was different from the headteacher pay scale issue. Members expressed concern that, as more schools became academies. or free schools were set up, the possibility of further such cases in terms of both pay and procurement would increase.

The second major issue, procurement and leasing,  produced more searching questions from the Committee members. They were told that a small number of schools had entered arrangements with Finance Companies and that the amount involved was 'very material' in a small number of schools. In five schools the amounts were such that it could affect their financial future.Brent Council was taking group legal action on behalf of a number of schools over leasing arrangements in a process that could take 10 months.

Asked about what action the Council could take on such issues officers replied that when schools went into deficit the Council would agree a Deficit Reduction Plan requiring the school to return to a balanced budget within a reasonable period.. Challenged on what action could be taken if a governing body were uncooperative or did not agree with what had been requested Simon Lane explained that the Council did have powers but these were draconian, employing a sledgehammer to crack a nut. The governing body could be removed but this needed the permission of the Secretary of State,  or delegated financial powers taken away from the governing body with the council running the finances. The schools could challenge the latter and  the council didn't  have the resources to run the budget themselves.

There was further discussion about financial training for governors and whether that should me mandatory, at least for chairs, and on recruiting governors with financial expertise. No information was produced on how many governors had taken advantage of the financial training on offer and whether all schools had been involved.

In terms of a time line Simon Lane from the Audit Team said that headteacher pay should be regularised within 3 months; the legal case resolved in 10 months and that individual school investigations were ongoing but an update would be produced in six months.

It was good to see a Scruitiny Commiitee doing its job thoroughly. I  fact time ran out and the very important issue of Children's Safeguarding was postponed until a later meeting. 

Serious concerns must remain over financial mismanagement, particularly as council staffing is reduced, schools become more autonomous, and out-sourcing become more prevalent. I think what concerns me most about this is that these issues take way from the main function of headteachers, governors and schools: improving teaching and the learning of pupils.