Potto: Where’s the Money? [Pt.3]

Potto: Where’s the Money? [Pt.3]

• – an “In My View” article by NIGEL WARD, presenting Part 3 of an investigation into Potto Parish Council. Having previously shown “How much?” (many thousands) and “How?” (unlawfully), the question now arises: “Why?” If you are a Potto reader and believe (like the Reverend SIMPLETON) that this question is trivial to the point of irrelevance, then I would suggest that you have the Council you richly deserve.

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Readers coming late to this investigation may gain a quick-fire overview of my findings thus far by reviewing the following bullet-points:

• One single item of expenditure (£10,180.80 to resurface a ‘bridleway’) exceeded the entire annual Precept revenue to the tune of c.145%, vastly outside of the financial boundaries prescribed in the Council’s own Budgetary Controls within in its Financial Regulations and Standing Orders;
• This was unlawful expenditure, in breach of s.137 of the Local Government Act 1972;
• Contrary to procurement law, no invitation to Tender was issued and the records show only one company was considered;
• The statutory Financial Appraisal was not undertaken;
• There was no record or any consideration of repeating the earlier and very successful use of ‘free’ voluntary labour;
• In breach of legal requirements, the Council’s own Financial Regulations and without a Council Resolution, the management of the work was delegated to Councillor Ian MACPHERSON;
• The work was unlawfully awarded to a remote contractor (the Company was declared ‘Dormant’ within a month) and there are no published records or even a mention of a work contract, job specification, job scope, insurance arrangements, safety assessment, site survey report (before and after), work done (if any), photographs, ‘value-for-money’ assessment, quality control assessment or any warranty or indemnity;
• No external advice was recorded as having been sought from the YLCA or similar body.

As far as can be determined from the public record, this ‘bridleway’ maintenance and enhancement (to a width of 10ft) is far and away the largest single item of expenditure ever undertaken by Potto Parish Council. The record does show, moreover, that there was no discernible need or public demand for the work to be undertaken at all. In response to a Parish Plan Questionaire, 82 residents out of 90 respondents (91%) favoured a 2-3 feet-wide surfacing of the ‘bridleway’ – markedly, no respondent requested a surface 10 feet-wide:

The following Timeline of events is highly instructive.

TIMELINE

December 2016 – The Potto Parish Council Newsletter includes a full-page feature with a large photograph illustrative of extensive maintenance work carried out to the ‘bridleway’, entailing the spreading of 100 tonnes of road planings by a volunteer labour force. The Council’s Annual Accounts for 2016/17 record material costs of £780.80 and £156.00 (for road-planings) and plant hire at £382.73 – total £1,319.53.

December 2017 – The Council Newsletter again includes a full-page feature with a large photograph illustrative of extensive maintenance work carried out to the ‘bridleway’, again with ‘free’ labour, this time provided over two weeks by inmates from Kirklevington Grange Open Prison. The Council’s Annual Accounts for 2017/18 record costs of £1,536.00 for resurfacing materials (road-planings) and £480.00 for plant equipment hire – total £2,016.

Within a matter of twelve months, a grand total of £3,335.53 (almost half the annual Precept) was disbursed maintaining the ‘bridleway’ to a standard worthy of full-page ‘bragging rights’ in successive December Newsletters. During the next three years, 2018/19/20, it seems the ‘bridleway’ received little or no attention, attesting to the lasting quality and integrity of the repairs done in 2016 and 2017:

Interestingly, the December 2021 Newsletter, following the completion of the unbudgeted 2021 £10,180.80 ‘bridleway’ maintenance program, is entirely devoid of any such colour-illustrated self-congratulatory chest-beatings – almost as though the Council’s single largest-ever contract was of no public interest at all and barely worthy of even this sole passing mention:

“projects in 2021 with the new footbridge and improvements to the surface of the bridleway to Swainby, as well as the speed improvement project”.

That is it; £10,180.80 glossed over with only nine words of text (underlined) – and no photo.

WHY so little publicity?   

December 2020 – The Council’s December 2020 Minutes, at Item 4.3, state:

• “The hunt came via the village at on Tuesday, the surface of the bridleway held up well”.

These Minutes also record that some “existing material stocks” (road-planings) were still available for such partial repairs as may have arisen.

I also note the Council’s 2021/22 Budget, compiled towards the end of 2020, does not include any projected expenditure at all for the ‘bridleway’, presumably because no expenditure on the ‘bridleway’ was considered likely to be necessary in the coming financial year (2021/22).

January 2021 – Readers may remember that Potto Parish Council had been unable to publish any of its Annual Accounts since 2015/16, because the External Auditor, PKF LITTLEJOHN LLP, was engaged in performing initial assessments of hundreds of Objections to the Annual Accounts. This initial assessment audit work was coming to a head and I now (belatedly) learn that the Council was even given a nod and a wink from PKF LITTLEJOHN that a significant development was imminent, that Audit Investigation fees were escalating and were now likely to considerably exceed the Council’s Annual Precept revenue.

The Council’s cash-in-hand situation was, at that time, as follows:

Grand Total = £15,922.58 – or, in round numbers, £16K.

January and February 2021 – The Council’s Minutes record, at Item 4.3, in identical copy/paste statements, that members:

• “discussed the current state of the surface of the bridleway due to the recent heavy rainfall”.

Note that this ‘discussion’ did not conclude or determine that any repairs were necessary. This is understandable because that would have been somewhat at odds with the previous month’s Minutes, which recorded that:

• “the surface of the bridleway had held up well”.

8th March 2021 – the Parish Council received what must have been a devastating 25-page formal letter from PKF LITTLEJOHN LLP. This extract suffices to make the point:

The letter states that the External Auditor was embarking upon a forensic investigation into 97 (out of a total of 326) validated Objections to the Council’s 2016/17, 2017/18, 2018/19, and  2019/20 Annual Accounts.

The situation was, in fact, worsening, with no end in sight:

Bearing in mind that previous years’ External Audit Investigations had already resulted in fees of £5,365.12 and £4,703.87 (totalling £10,068.99), it must have been clear to the ‘directing mind(s)’ at the Council (i.e. the Chair, Councillor Andrew WILDE and the Responsible Financial Officer [RFO] – the Clerk, Mrs Joanne STOREY, the Chair’s daughter) that Potto Parish Council was about to find itself in extremely dire straits, particularly financially, with new Investigation fees virtually certain to exceed the c.£16k which the Council held in cash reserves.

At this point, any competent Chair and RFO/Clerk would, if remotely concerned with acting in the public interest, seek advice from the YLCA and begin a transparent, diligent and detailed programme to address and rectify all of the problems and then inform PKF LITTLEJOHN that the Council would now, after many years of procrastination, acknowledge ALL of the “procedural improprieties” raised in the Objections.

Had the Council’s ‘directing mind(s)’ made this offer in the spirit of honesty and goodwill, PKF LITTLEJOHN LLP may well have called a halt to their costly forensic Audit Investigation which would have been rendered unnecessary by what would amount to a plea of “Mea culpa”.

Regrettably, the public record confirms that the ‘directing mind(s)’ chose a path of denial – indeed, at the time of writing, there has still been no acknowledgement of the vast array of well-documented wrongdoings, no evidence of contrition and the Council continues to stumble down the path of attempting to bamboozle the public with ludicrous claims that an appeal against the PIR is underway – which both the Smaller Authorities’ Audit Appointments (SAAA) and PKF LITTLEJOHN have confirmed is not possible – whilst continuing to harass and belittle whistle-blowers, just as though PKF LITTLEJOHN LLP’s forensic investigation must somehow be mistaken.

9th March 2021 – The Agenda was compiled for the 17th March 2021 meeting. Astonishingly, the vitally important PKF letter – received the previous day (with concomitant financial ramifications) – was not included on this Agenda and thereby concealed from the other Councillors – and the press and public.

17th March 2021 – The Council held its monthly meeting. The March Minutes also make no mention of the PKF letter and what amounted to a looming financial and, indeed, possibly existential crisis at the Council. Why?

The Minutes do note a ‘donation’ (of unspecified amount) from Hambleton District Council, for which no explanation or detailing has been forthcoming.

But those Minutes do include two interesting Items concerning finances, which offer the first hint of the Machiavellian purpose behind the actions of the ‘directing mind(s)’.

Firstly, the Minutes state, at Item 4.4:

Take particular note of that final phrase:

• “unsustainable for Potto Parish Council.” 

And secondly, at Item 9.2:

Grand Total = £17,775.75 – or, in round numbers, £18K.

Thus, it becomes clear that the Council’s total financial cash reserves in March 2021 (c.£18K) were barely adequate to cover the additional Audit fees incurred up to March 2021 (c.£16K), which is when the formal Audit Investigation BEGAN – not when it concluded. It must have been abundantly clear that far more was to come.

April 2021 – The Council’s Minutes for the April Meeting offer the first hint that a significant ‘bridleway’ project is about to raise its head.

Item 4.4 states:

May 2021 – The Council’s Minutes for the May meeting are also instructive:

By now, the plan to resurface the ‘bridleway’ – nothwithstanding the fact that, as recently as December 2020, the surface was inspected and recorded as “holding up well” – had progressed and an ‘agreement’ was entered into (but what ‘work’ was ‘agreed’, and under what terms, is entirely unrecorded).

The ‘bridleway’ in question, though accessible to the public, seems of particular benefit to only two residences – those of the GRECO and MARCH families:

The May Minutes do record that Councillor James GRECO (who, according to his website, operates his business Lifestyle Technologies from the same address) was present when the ‘bridleway’ proposal was discussed and agreed (and also at the June and July meetings), though no interest was ever declared in this agreement. Councillor GRECO sent apologies for absence for the August and September meetings. The October meeting was cancelled.

Only 10 weeks had elapsed since the date of the PKF LITTLEJOHN letter (8th March 2021) advising that a major escalation of the Audit Investigation was underway (with inevitable cost implications), to the date of Potto Parish Council having “agreed” to pursue unplanned, unscoped, unspecified, uncontrolled, unbudgeted and entirely unnecessary work, contrary to the specifically stated wishes of 91% of respondent electors, and to incur unlawful costs of £10K+ in the process. Why?

November 2021 – The Councils’ Minutes confirm Councillor GRECO’s continued absence, but do not include, under correspondence, any record of a formal Resignation by Councillor GRECO. He seems to have just quietly and discreetly faded away . . .

I can find no record of the announcement of a casual vacancy, or of an invitation to potential Co-optees.

The Minutes do record that the Coxon Brothers’ invoice for £10,180.80 was paid in full (on the very day of the meeting).

December 2021 – The Council Minutes confirm the co-option of a new Councillor – Shaun MARCH (the son, it seems, of the above-mentioned MARCH family, one of only two in situ beneficiaries of the ‘bridleway’ enhancement project), thus filling the casual vacancy arising from former Councillor GRECO’s undocumented departure:

As previously reported (in “Potto: Where’s the Money? [Pt.1]), new member Councillor Shaun MARCH made no Declaration of Interests within the statutory 28 days of assuming his position, as s.29 of the Localism Act 2011 requires (and had still not done so as of 20th January 2023, though, in fairness, I see that on 22nd January 2023 his Declaration – dated 16th March 2022 – finally appeared on the Potto Parish Council website). Perhaps he hoped to avoid drawing attention to his family’s ‘windfall’?

Motive, Means & Opportunity

What the foregoing Timeline makes clear is that the conception and execution of the unbudgeted disbursement of £10k+ was legally flawed at each and every step.

Nevertheless, the accounts show that £10K+ of public money was paid out and will never return to its responsible custodian – Potto Parish Council.

The Means and the Opportunity to facilitate this extraordinary train of events are easy to identify. All that would be required can be identified thus:

• Control over the Council’s Responsible Financial Officer (RFO) and Clerk, Mrs Joanne STOREY (the Chair’s daughter);
• Control over the Council’s Agendas;
• Control over the Council’s Minutes;
• Control over the Council’s website;
• Control over the Council’s responses to Freedom of Information requests;
• Control over the Council’s statements to the press;
• Control over the Council’s correspondence with the YLCA and/or NALC;
• Control over the Council’s correspondence with PKF LITTLEJOHN LLP;
• Control over the Council’s correspondence with Smaller Authorities’ Audit Appointments (SAAA);
• Control over the Council’s submissions to Internal Auditor Mr Roger Alan BRISLEY FCA.

This effectively reduces the list of qualifying ‘candidates’ to one – the Chair, Councillor Andrew WILDE.

Why, at a time when the Chairman WILDE must have been the first to have an opportunity to react to PKF LITTLEJOHN’s intimation (early in 2021) that debilitating Audit Investigation charges were in the pipeline, would Councillor WILDE embark on a legally perilous process of squandering the greater majority of the Council’s cash reserves?

I have developed a theory on this topic – the only one which makes an iota of sense to me – for which I am pleased to have received some suggestion of confirmation from sources both very close to the Council – and as far away as Canton.

Unless I am very much mistaken, the Chair entertained the utterly bizarre notion that PKF LITTLEJOHN would, god-like, “temper the wind to the shorn lamb”.

By which I mean that this would allow for many of the Council’s 97 proven “procedural improprieties” not to be forensically investigated – and, thereby, the outcome could be ‘sold’ to residents as nothing more than a few pettyfogging technicalities scraped out only by the malicious obsession of  nit-picking pedants. Statements issued by the Council to the regional and national press in the wake of the PIR publication persisted with this line of ‘playing down’ the gross extent of the 97+ failings.

https://www.express.co.uk/news/uk/1666355/Potto-villagers-500-complaints-audit

One cannot imagine PKF LITTLEJOHN taking a clement view of the Council’s misrepresentative depiction of its woes, nor its attempts to shift the blame onto the Objectors. As the last-line guardians of probity, transparency and good husbandry of public funds, they may feel duty-bound to take future Objections very seriously indeed – with the ultimate consequence of further Audit Investigation fees.

Quite how the Council intends to meet the existing £37K debt and the likely forthcoming Audit Investigation fees remains unclear. In the light of the forthcoming Local Government Re-organisation (LGR), just ten weeks away, it is difficult to imagine Hambleton District Council being able (or permitted) to facilitate a loan (to be repaid by what amounts to a ‘surcharge’ on future Precepts).

Potto Parish Council may even be forced to mortgage the Village Hall – or sell off the car-park to a developer . . .

In “Potto: “Where’s the Money? [Pt.4]”), I will outline copious evidence in support of a seemingly surreal interpretation of this otherwise inexplicable strategy.  But before that, I will return to my earlier examination of the Internal Auditor’s part in this bizarre litany of reckless irresponsibility.