WALTHAM FOREST: No contracts for £1m council payments

4:26pm Wednesday 13th August 2008

By Jonathan Bunn

THE company which is being investigated for the alleged fraudulent use of taxpayers’ money was paid £1million by the council without a contract being signed, it has emerged.

The payment to EduAction, from funds earmarked to help the most deprived residents through the Better Neighbourhood Initiative (BNI), was made in 2006 without tendering rules to prevent fraud being followed.

A leaked document shows the seven-figure sum was paid to the company for programmes labelled Curriculum Development (£77,604), Alternative Provision (£342,363) and Late Arrivals Project (£474,941).

Two other schemes known as ‘Vision 12’ and ‘Notschool’ were approved in May 2006 by the Local Strategic Partnership (LSP), which is the accountable body for BNI and its predecessor Neighbourhood Renewal Fund (NRF) and is chaired by council leader Clyde Loakes.

The LSP originally agreed that contracts should be drafted, although a review by consultants PriceWaterhouseCoopers(PWC) found this had not been done.

Details of the deal will cause further embarrassment to the authority, which was found to be responsible for a widespread and long-term systematic failure to manage millions of pounds earmarked to address inequalities.

Whistleblowers claim EduAction, which ran education in Waltham Forest until April, used money from NRF to boost profits.

EduAction’s lawyers intervened to block the results of a council investigation into the affair being made public last month.

The authority has now passed its findings to the police and the matter has also been referred to the Public Accounts Committee.

Cllr Loakes has refused to accept responsibility for the failings and says the problems were the result of council procedures not being followed and have nothing to do with the LSP.

Five council officers are currently under investigation for failing to report claims that EduAction had misused £240,000 it was given to run the Youth At Risk programme in 2004.

Nick Tiratsoo, whose research uncovered a number of BNI/NRF failings, has called for an independent investigation.

He said: “The council simply handed over about one million pounds of public money to pay the company for some very vaguely defined programmes.

“With no contract in place, LBWF was then unable to determine what was achieved, or take corrective action when things went wrong.”

A council spokeswoman said: “The findings of this investigation are now the subject of a disciplinary investigation.”