Documenting Past Failures: (5) The BNI – ‘We’re awfully sorry, folks. Mistakes were made about how we spent millions of pounds of public money. But it’s all in the past. Let’s move forward and forget it’.

By the spring of 2008, the situation with the Better Neighbourhoods Initiative (BNI) programme was becoming untenable. The Council’s Corporate Audit and Anti-Fraud Team had just reported on the Dr. Foster episode, had nearly completed its work on EduAction’s Youth at Risk project, and was chasing new leads.  A consultant’s examination of the BNI which was presented to Cabinet concluded there had been ‘systematic failures by officers to follow sound procedures’. Police investigations were said to be ongoing. Negative coverage in the local press continued. So LBWF reacted as it had always done, almost by reflex, and appointed yet another consultant, no less than PricewaterhouseCoopers (PwC) this time, to try to get an effective handle on the ongoing mess, once and for all.

PwC’s report, presented to Cabinet in July 2008, was a milestone, because henceforth no-one could pretend that what had happened was anything other than an utter shambles. It was as if the BNI had unfolded in a parallel universe, where normal local government rules were routinely ignored.

In theory, if established practice had been followed, officers should have allotted each of the 105 BNI projects a separate file, containing full details of procurement, finance, monitoring, and audit.

However, PwC established that:

78 per cent of the files had no logical structure;

39 per cent of the projects ‘did not have separate files but were grouped together in larger files’;

only 8 per cent of the projects were supported by full and consistent budgetary data;

48 per cent of the files did not include signed contracts;

‘the vast majority of project files inspected had no evidence of tendering, or just a note about the tenders received but no actual further evidence’;49 per cent of projects were assessed ‘as having inadequate evidence of contract monitoring’; and

‘All but 3 projects had no evidence of any data checking or auditing by the Council in respect of…the contract monitoring procedures’.

These were startling revelations, and most Councils would have been mortified and mounted a vigorous programme to put things right. But true to form LBWF stalled, recognising its predicament, certainly, but reacting to it in time honoured PR style by conceding as little as possible. The Waltham Forest Guardian’s editorial of 24 July 2008 was apposite:

‘”We’re awfully sorry, folks. Mistakes were made about how we spent millions of pounds of public money. But it’s all in the past. Let’s move forward and forget it.” That’s the gist of the cabinet’s reaction to the damaging reports on how regeneration funding has disappeared without trace over a period of years. But it just won’t do. It can’t be swept so easily under the carpet. The appalling fact is that a fortune of Government money, intended to help people living in the neediest circumstances, has gone – and no-one seems to know where, because all the necessary paperwork doesn’t exist’.

For the Guardian, the only way forward was an independent inquiry, and perhaps unexpectedly, in 2009 its calls were answered.

However, before dealing with that, the next post in this series will stay with PwC, and look at some of its more detailed findings.