Probe Has So Far Cleared Merton Council Of Corruption Claims

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Update follows claims made by 'whistleblower'

An external investigation into allegations of corruption at Merton Council has so far found no evidence of corruption, malpractice or unlawful expenditure.

The full report following an investigation by Ernst and Young, the audit and accountancy firm, has yet to be published. But they issued an update before the full council meeting on Wednesday (February 5).

Ernst and Young had interviewed council staff and looked at financial records after claims were made by an anonymous 'whistleblower'.

The claims were believed to centre on payments being made for work by temporary consultants, when it could have been done by permanent staff.

Now the council has said Ernst and Young found no evidence of corruption and are not proposing any further investigation is undertaken.

The brief update stated that temporary staff were being paid at the market rate for their jobs. It did identify some issues relating to council processes used for the procurement of temporary staff. The council has said it will ensure these issues are addressed.

Meanwhile Merton Conservatives have expressed concern over the handling of the investigation and the two-and-a-half month delay in providing a response to an "urgent question" on the issue of consultancy work asked by Councillor David Williams.

The Lib Dems and UKIP also expressed concern about the length of the investigation.

During a debate on financial management at the full council meeting, a Conservative-backed motion was passed which expressed regret that investigations into the council's hiring practice and use of long-term consultants have still not concluded.

Councillor Williams said: "The council's so-called summary report on the whistleblowing allegations is no more than a nine-line email rushed out late on Wednesday afternoon to try to head off the Conservative motion."

Lib Dem leader Iain Dysart said: "We voted to express concern at the time being taken to complete the independent investigation into the serious whistleblowing allegations made nearly three months ago. Although a summary was forthcoming just hours before the Council meeting started, there remain issues to be pursued.

"Whilst it's hard to imagine how it feels either to allege or be alleged against, the prolonged uncertainty, with associated suspicion, helps nobody, and therefore investigations must be carried out not only thoroughly but in a timely manner".

Merton's UKIP leader Suzanne Evans said: "Merton's Labour Councillors appeared to be rubbing their hands with glee at Ernst and Young’s recommendation at Wednesday night's Council
meeting, as if their only concern was not to have any hint of wrongdoing on their watch,”

"An official Press Release put out by the Council appeared to draw a solid line under the investigation despite the fact we've not even had Ernst and Young's final report yet and won't
get it until March 12. It completely jumped the gun; sadly I don't believe Council Tax payers can yet be completely reassured there has been no wrong-doing."

The summary report from Ernst and Young stated: "In relation to the issues raised by the whistleblower(s), our work to date has not identified evidence of corruption, malpractice or unlawful expenditure. Our work, however, has not involved a forensic analysis of the email accounts and electronic data held by the individuals on laptops and other electronic devices or of the bank accounts of the named individuals. Such work would be appropriate where concerns exist with regard to the making of illicit payments. Given that the rates paid to the individuals do not appear to be materially different from the market rates for such services, any potential financial benefit derived is relatively modest.  

"In this context, the Council may reasonably conclude that unless new evidence is brought to its attention, the cost of undertaking further investigative work would be disproportionate to the risk of such payments having been made or received. At this stage, we would not propose that further work is undertaken.

"However, our work has identified some issues in the processes used for the procurement of interim staff. We will provide more detail once we have completed our work."

The final report will be discussed at the council's General Purposes committee on March 12. 

Councilllor Mark Allison, Cabinet member for Finance, said: "I'm relieved that, with the independent investigation finding no evidence of corruption, malpractice or unlawful expenditure, a cloud has been lifted and we can now get on with improving the lives of our residents. 

"I'm sure the final report will suggest areas where our procedures can be tightened up even further, but it was always hard to believe a council like Merton, which has improved so much, is so careful with money and voted best council in the country, was corrupt."

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February 7, 2014