Special Investigation

CITY AUDIT SLAMS MANAGEMENT OF INNER CITY SCHEME

04-10-2007

A confidential Birmingham Council audit seen by The Stirrer has delivered a withering assessment of a £14 million inner city regeneration scheme saying that poor management could leave it open to accusations of "malpractice, favouritism, and Illegal decision making".

The damning verdict is made by city auditor Keith Jones in a report about the Enterprising Communities Programme - or ECP - dated 29/6/07.

Although the document is now four months old, it has never been widely circulated, and a warning notice states it should not be released in response to a Freedom Of Information Request "without prior consultation with Birmingham Audit".

Details have not been made available to the press, and it is currently available to view on an appointment only basis at the ECP office on Stratford Road.

We believe it reveals such a high level of incompetence that it is in the public interest to make its contents known.

The Enterprising Communities Programme is funded by the European Union and aims to breathe new life into two deprived parts of Brum; Sparkbrook/Sparkhill and Small Heath/Saltley.

Keith Jones' audit was designed to check that the City Council has proper processes and controls to ensure it fulfils its role as the Accountable Body; and to ensure that the two boards controlling them are properly run.

His evidence points to failure on both counts; yet remarkably these findings have never been presented to councillors for a full and frank discussion. Indeed, Board members have been threatened with the sack if they discuss the findings in public.

In a direct criticism of the Council, Jones states "that the governance arrangements....that were put in place at the beginning of the programme were not effective."

And he is also sceptical about whether the Programme is achieving its stated aim, despite assurances from those working on it.

He writes that "it is not possible....to prove categorically....that the ECP is delivering its agreed objectives of reducing the economic differential between the targeted area and the rest of the city". In other words, it could be a waste of money.

What's more, he says: "The Boards' governance arrangements need improvement.

"In our opinion some of the solutions that have been used to move the ECP forward have left Board Members and City Officers open to potential criticism of failure to follow laid down procedures and possible accusations of malpractice, favouritism and illegal decision making."

This refers to the establishment of an executive panel which started making decisions which were then due to be rubber-stamped by the respective boards.

Critics say board meetings were frequently cancelled or not held at all, allowing spending on certain projects to go ahead unchecked.

According to Jones, the authority to delegate powers in this way was unconstitutional.

He also questions whether the election of the Chair of the Sparkbrook and Sparkhill Board for 2006 Mohammed Shaffiq was legitimate.

In addition to his role as Chair, Shaffiq is a director of the Ashiana Community Project in Sparkbrook, and the Local Leagues, which encourages youngsters to take up sports in Balsall Heath - both of which have benefited from ECP funding sanctioned by his fellow Board members.

He denies any impropriety - and we certainly aren't alleging any - insisting that he always declared a possible conflict of interest; as did Small Heath and Saltley chair Zualfquar Hussain when groups he was involved with received ECP grants.

Jones does not dispute their honesty, but says: "We believe the significant involvement of the chairs in most aspects of the delivery of the ECP is unwise.

"Whether it is warranted or not, we believe that their extensive involvement in the running of the ECP has left both chairs potentially open to criticism and accusations of favouritism, bias and malpractice."

Considering the vast sums of public money involved, the level of record keeping left a lot to be desired - including an occasion when two different sets of minutes were issued for the same meeting.

Details were recorded on loose sheets of paper, and names on attendance sheets were entered in block capitals instead with signatures.

Jones comments that "on at least one occasion the minutes of one of the Board's meeting were issued which did not state the correct attendees. The revised board minutes were totally different to the original ones issued.

"We were also shown the minutes of an AGM that some members were present when they had not been".

Taken in its entirety, this report suggests - at the very least - a somewhat cavalier attitude towards taxpayers' cash.

In saying that we ascribe no malicious or improper motive to any board member, Chair or Council officer.

What we do find hard to understand, given the importance of the issue, is the lack of public discussion surrounding the audit.

Far from exposing these matters, officials seem to have done everything in their power to damp down public knowledge and interest.

Sorry, but that's just not good enough.

We want to know who was responsible for the errors. And what action, if any, has been taken against them.

The aim is not to start a witch hunt, but to ensure that valuable resources needed by some of poorest communities are not wasted.

Let the debate begin.