From Andrew Rowson, 5th November 2023
Dear Members,
No need to apologise
This letter is a response to an open letter I received from
Cambridgeshire County Council’s (CCC) Chief Executive on 26th October,
a copy of which is attached in Appendix 1 below. This letter is being copied widely to other
recipients, and will shortly appear on my news website.
Some of you may be aware that in September, the editor of
the CambsNews website invited me to submit an opinion piece about being denied
my statutory rights under s26 of the Local Audit & Accountability Act 2014 (LAAA
2014) to inspect accounting records at CCC, and about the unresolved issue of
CCC’s historical, uncorrected £218 million worth of aggregate accounting errors
relating to the central government City Deal grants it received between 2015/16 and 2019/20.
The article, entitled:
“Where has £47 million of
Government’s City Deal grant gone?”
was published on Friday September 8th on the
CambsNews website.
The following Monday, CambsNews’ editor received a phone
call and an email from CCC’s Head of Communications. The email contained an ill-informed, five-page
response to the opinion piece which the editor immediately shared with me. In it, the officer asserted that the article made
allegations that were:
“serious and in a number of
ways defamatory to the Council and its officers.”
The Head of Communications ended her email as follows:
“Happy to discuss any of the
points in the attachment further if that is helpful.
In the meantime, I acknowledge
that following our conversation just now, you are taking the opinion piece down
while you review our points.” [my emphasis]
By the time the editor spoke to me on the Monday evening he
had already taken the article down “pending review”. I told him he should not be concerned since
in my opinion the response was full of nonsense that could easily be countered. The editor said he wished to review the
letter with me, and hoped to put the article back up within 24 hours. I offered to review it with him straight away,
but the editor asked me to wait until the following morning.
I phoned the editor at half hour intervals throughout
Tuesday 12th September between 8.30am and 10.30pm to review the Council’s
response. He picked up the phone just once,
just after 3.00pm, but told me to call back later. I have since learned that by that time the “pending
review” image on the website had already been replaced by an unreserved apology
that had evidently been drafted or directed by CCC’s Communications team.
It seems the council bullied the editor into issuing the
pre-prepared apology before he had reviewed the Head of Communications’ letter
with me. So much for that officer’s
professional integrity.
In her letter, the Head of Communications expressed concern
that the article had been retweeted by “at least two locally prominent and
influential twitter accounts”. She
asserted that it had “likely had a wide reach and has already been unfairly
damaging - to both the council and a named officer of the council.”
Perhaps the section that most influenced the editor’s
decision to cave in to the council’s bullying was paragraph 2:
“The article does not attempt
to make legitimate public policy criticisms of the Council, but instead implies
and asserts that the Council has engaged in criminal, unlawful, unethical or
otherwise dishonest and unprofessional activities – most seriously alleging
that it has engaged in ‘false accounting’.
Unless the article is removed and the council receives a full apology
and retraction, it will be seeking legal redress from both Mr Rowson and the
CambsNews publishers.”
The simple fact that a council finds an article uncomfortable or damaging to its reputation does not justify bullying a journalist to remove it. The editor does not speak for me in his apology. I stand by all my allegations, including those of criminal behaviour and false accounting. They are supported by comprehensive documentary evidence going back six years. Along with my former County Councillor Mr Mike Mason, I have shared that evidence many times with council members (in particular the Audit & Accounts Committee), council officers and the council’s so-called independent external auditors. I make this point because the editor’s apology may lead some readers to think that I regret submitting the article, or that I acknowledge the allegations were unfounded or wrong. That is not the case, which is why I immediately reposted it on another website. It is now located here.
On September 18th I wrote to CCC’s Chief
Executive, Dr Stephen Moir, expressing disappointment in his officers’ bullying
conduct, and demanded an apology. In a
19-page letter I rebutted every incorrect point in his Head of Communications’
complaint with yet more fully-referenced documentary evidence. The CEO’s response below does not challenge
any of that evidence, does not address the allegations of nine-figure false
accounting, or the repeated denial of my public inspection rights (a denial of democracy), or
the bullying by his Head of Communications, or the dirty tricks by another
officer working in the Communications team that were exposed in a recent
edition of Private Eye magazine. The
CEO’s only concern was to defend the officer I had named in the original
article. Dr Moir commented that he
considered his officers’ conduct to be “proportionate and entirely
appropriate”. His letter contained
no apology, hence this public response.
According to the Head of Communications, the most serious
allegation in the article was about the false accounting of City Deal
grants. I wish to comment on this
further because it is a serious allegation, and the council’s faux outrage and
hypocrisy need to be publicly exposed.
As noted above, for more than five years, Mr Mason and I
have repeatedly presented the evidence supporting the false accounting of City
Deal grants to the relevant parties – to senior officers, the Audit &
Accounts Committee, the external auditors, and all members. Between the summer of 2021 and September last
year I have had a one-to-one meeting with the Deputy Leader (Cllr Meschini), a
meeting with Mr Mason and the Chair of the Audit & Accounts Committee (Cllr
Wilson), a one-to one meeting with the Council Leader (Cllr Nethsingha), and a
one-to-one meeting with the Chief Executive.
City Deal accounting was discussed in detail in all four meetings, and I
left the Leader and the Chief Executive with dossiers containing the detailed
evidence of the false accounting.
Nobody from the council has provided a single piece of counter evidence
to challenge the allegations. I have
also repeatedly and publicly alleged that both auditors were complicit in the
false accounting.
In July 2022 the council and its auditor, Ernst & Young
(EY) finally corrected the £160m false accounting treatment of the
2020/21 City Deal grant, but only after the facts were exposed in the
press. The £218m aggregate
overstatements of debtors and usable reserves from the identical breach
of the CIPFA Code in the council’s five previous annual financial statements remain
uncorrected. Mr Mason still awaits BDO’s
response to his formal objection to the 2017/18 accounts on the matter, whilst EY
last year declined to insist on its client publishing prior period corrections to
the earlier, incorrect accounting treatment so that those items of account would
comply with the corrected 2020/21 accounting policy for capital grants, as
required by International Accounting Standard 8 (IAS 8). The dishonest mumbo jumbo below is what EY
wrote about prior period adjustments in its whitewash objection decision notice
in March this year. The materiality
threshold for each audit is fixed each year by the independent auditor. The final materiality threshold EY set for
its audit of CCC’s 2020/21 accounts was £18.68m.
“Our
calculation of planning materiality was based on gross operating expenditure as
we view this as the key area for the users of accounts.
Our
assessment of whether a prior year error requires adjustment is based on both
quantitative and qualitative factors such as, but not limited to, the quantum
and nature of financial statement line items impacted, the significance of the
impacted metrics to users of the financial statements, the element of
subjectivity in determining the appropriate accounting for an item of account,
the motivation of management with respect to a particular accounting treatment,
the selection and application of appropriate accounting policies.
Overall, as an Audit Firm, we concluded that no PYA was required on a combination of quantitative and qualitative factors.”
As long as those material prior year errors remain
uncorrected, the public and other users of the accounts (including lenders,
suppliers, and central government) cannot trust a single financial figure CCC
publishes.
Mr Mason and I have repeatedly and publicly directed the allegation of false accounting fraud (a criminal offense) at CCC. So why did the Head of Communications threaten the editor of CambsNews with legal action unless he removed the article and issued a grovelling apology and retraction, whilst Mr Mason and I have never received similar threats? The answer, I believe, is that it was an empty threat because the authority knows the allegations are true.
An invitation to put up or shut up
In my letter to the Chief Executive nearly seven weeks ago,
I gave Dr Moir the website address where the article is now published. The only difference from the original is that
the officer’s name has now been removed.
I have not issued an apology or retraction, and I will not do so. There is nothing to apologise for. So, if the council genuinely believes that
publishing the allegations online is unfairly damaging to it, and given that the
article has doubtless now been read by many more influential people in the last
six weeks than the original was in three days, why have I still not heard from
the authority or its solicitors? Again, I
believe it is because the authority knows the allegations are true.
Bullying at councils often goes hand in hand with fraud,
corruption, and/or dysfunctionality, as events at Croydon Council,
Northumberland and West Sussex County Councils - to name but three - have
shown. In recent years, CCC has also had
a corrupt and bullying corporate culture, as the Farmgate scandal involving the
former Deputy Leader Roger Hickford and former Chief Finance Officer Chris
Malyon bear witness. It appears that this
bullying culture is still alive and well.
It is neither appropriate nor proportionate for holders of
public office to bully a local journalist or try to muzzle the free press. This episode is yet another attempt by CCC to
discredit and silence local electors who have raised legitimate concerns about:
· deliberate, material breaches of the CIPFA Code
of Practice that have been aided and abetted by two so-called independent
auditors,
· the authority’s failure to select appropriate
accounting policies and apply them consistently,
· the authority’s systematic denial of statutory
rights of access to information designed to allow local electors and other
interested parties to properly scrutinise how and where public money has been
spent, and whether their local authority has kept “adequate accounting
records” under s3, LAAA 2014.
If CCC is confident in its stated position, then to be
consistent it should have written to me demanding my full apology and
retraction and/or sought legal redress well before now. One more week should be ample time for it to
begin the process. I look forward to
receiving that communication.
Yours sincerely,
Andrew Rowson
