Is this evidence of a £34 million fraud against the taxpayer?

By Andrew Rowson

Council created bogus mortgages to cover up housing company insolvency.

Since its inception in 2016, Cambridgeshire County Council’s (CCC) wholly-owned housing development company, This Land Ltd (TLL) has been loaned £133 million of taxpayers’ money by its shareholder.  To afford the loans, CCC borrowed from the Public Works Loan Board (PWLB).

In the nine years since then, TLL has recorded comprehensive losses every year totalling £63.9 million up to March 2025 (2024/25 figures are subject to audit).

Over the years, TLL has repaid £13.3m of loan principal.  Those repayments were all for unsecured loans, which normally attract a higher interest rate for the borrower because of the higher financial risk for the lender.  The table below shows all loans, which reconcile with This Land Ltd’s closing borrowing balances in its financial statements (excluding the March 2025 debt write-offs - see below).

Where did the remaining loans go?

Apart from the start-up funding from the £13.34m unsecured loans (apparently repaid with cash from later loans), the £119.7m loans outstanding at 31 March 2025 were supposed to be mortgage loans, secured on former CCC-owned properties (greenfield and brownfield sites) that the council sold to This Land at market rates.  In his report on This Land’s latest business plan in July 2025, CCC Executive Director of Finance and Resources, Mr Michael Hudson writes of This Land paying the authority “£78.8m in capital receipts” for those properties.  That leaves unexplained lending of £40.9 million.  Where did that money go?

The answer lies mostly in the legal charges against This Land’s properties filed at Companies House under This Land Development Ltd.   The first 30 charges relate to purchased land assets.  Charge No. 0031 created in May 2023 is a catch-all charge on all This Land’s assets, including cash, plant and machinery etc. presumably to minimise CCC’s losses in the event of This Land’s insolvency.

The first 30 charges are tabulated below.  Their total value is £113.8m, £5.9m short of the £119.7m total loans figure, but still £35m more than the stated capital receipts figure of £78.8m.  In the absence of any other information, it could be assumed that the £5.9m represents additional money used by This Land to keep the company running, rather than for purchasing properties.  If so, on top of the £13.34m repaid loans, it would bring This Land’s start-up funding to £19.24m.

On closer examination of the legal mortgage documents, charges 0001 to 0027 (total value £77.872m) represent individual properties or packets of properties representing This Land’s portfolio of mortgaged land.  In every instance the charge value is identical to the corresponding property’s sale price to This Land in 2018 and 2019, as recorded at the Land Registry.  In other words, they are all 100% mortgages.

Charge 0030 is the only disclosed property This Land purchased from someone other than CCC.  It is a property in Hertfordshire bought from a private individual for £1.75m in March 2021.  Therefore, it does not feature among the capital receipts TLL paid to CCC.

The £77.872m represented by charges 0001 to 0027 is within £1m of Mr Hudson’s £78.8m capital receipts figure.  The difference may be down to an undisclosed additional mortaged property, a misstatement by Mr Hudson, or some other reason.  But it does not explain the remaining £34.2m difference between the total borrowing and the total charges, which seems to lie within charges 0028 and 0029 – highlighted in blue above.

Before exploring those two charges, a look at a representative charge in the 0001 to 0027 range proves instructive.

Charge reference 0010 created on 13^th April 2018 was for TLL’s purchase from CCC of the Fitzwilliam Road Hostel in Cambridge: 

TLL paid £1.1 million for the hostel, and that money came out of a larger loan facility agreement, known as “Portfolio 3” of £38.291m (see below).

The stated loan facility total is in fact slightly higher (by £1.445m) than the corresponding loan of £36.846m CCC took out from the PWLB in January 2018 (shown in yellow in the borrowing schedule table above).  Perhaps the authority added £1.445m from available funds to make up the Portfolio 3 total.

No second mortgage allowed

An important clause in every charge/mortgage document is clause 6.3 – No Security:

It means that both parties agree that the charge is the only charge on each property, and there can be no second charge against it.  That is standard practice, especially since they are 100% mortgages.  If a second charge were to be made against the same property, in the event of the borrower defaulting, the second lender would have no security over the property because of the initial charge, and the second loan would thus effectively be an unsecured loan, and possibly unlawful if it had been presented as anything else.

Charges 0028 and 0029 – double and triple counting of the same land security

Charge 0028 was created in August 2020, shortly before This Land reported devastating results in its 2019 audited financial statements.  In the calendar year to December 2019, This Land sold no houses.  Its token sales revenue was £34,407 rental income.  Its comprehensive loss for the year was £11.8m.  At the year-end it had only £3.78m in the bank, and owed CCC £5.18m in loan interest arrears that had been payable in 2019.  To compound matters, in the course of 2019 This Land borrowed a further £50m from its sole shareholder, bringing its total indebtedness to CCC at December 2019 to £96.5m.  The interest payable over the next 15-month accounting period would be in the region of £8.9 million.

At the beginning of 2020, This Land’s development pipeline also looked bleak.  During the 15-month accounting period to March 2021, TLL would sell just two houses (its first two) for £1.2m (i.e. less than a quarter of the 2019 loan interest arrears).  The company was critically short of cash.  In the background, the Treasury had published a consultation paper in March 2020 on future lending terms for councils borrowing from the PWLB.  The writing was on the wall that the unchecked cycle of CCC being able to borrow from the PWLB to lend to TLL, only to borrow more to lend to TLL so it could pay the loan interest, would soon come to an end.

Charge 0028 is different to the preceding charges.  Unlike them, the charge relates to a long list of properties, most of which apparently are set out in an “instrument” that is not accessible to the public.  However, the two named properties in the brief description below are familiar because they are properties on which CCC already had 100% charges.  The former Pru at 8 Station Road, Foxton, together with the Methodist Church at 6 Station Road is charge No. 0011 (see above), and the Fitzwilliam Road Hostel is charge No. 0010 (see above).

Charge 0028 states above that in respect of this £18.6 million mortgage (which matches the £18.6m loan dated August 2020 and highlighted in orange in the borrowing schedule table above):

“Under this deed, the Borrower [This Land Development Ltd] provides security to the Lender for the £18,600,000 made available or to be available under Facility Agreement.”

But that is impossible.  This Land cannot provide security to the same lender a second time for the same named properties in Foxton and Cambridge.  That is double counting, and possibly fraudulent.

What other properties are secured against the £18.6m mortgage?  Since the public cannot access the “instrument”, the next best thing is to scroll down the Charge 0028 page on Companies House to look for additional transactions filed against the charge.  There are seven of them, all charge release documents, with dates ranging from February 2024 to January 2025.  All the pdf documents can be downloaded and inspected.

The earliest charge release document, on 5^th February 2024, is a release of the Fitzwilliam Road Hostel charge, which is the same property, with the same Land Registry title number (CB346566) as Charge No. 0010 shown above:

An examination of all the charge release documents under Charge 0028 confirms that in every instance, the properties connected to that charge are already properties subject to one of the earlier 100% charges in the range 0001 to 0027.  Those other charges, and their release dates under Charge 0028 are shown in the Charge 28 column highlighted in blue in the charge table shown above.  From that table one can see that Charge 0010 was also released in the documents on its own Companies House page, on the same date (5^th February 2024).  That release document omits a description of the asset, but the charge code ending 0010 identifies it as the Fitzwilliam Road Hostel.

Strangely, on the charge 0010 page on Companies House, the hostel was also released in full from the charge at the earlier date of 18^th April 2023.  The property itself was sold by This Land on 24^th February 2023, as recorded at the Land Registry.  So the second charge release, a year after the property was sold, is redundant at the very least, and impossible since after the first release the property no longer belonged to This Land.

As the charge table above shows, Charge 0029 follows the same pattern as Charge 0028.  It too covers multiple filings contained in an inaccessible “instrument”.  It also has the same brief description as charge 0028:

As with charge 0028, charge 0029 also has additional transactions filed against it - eight in this case.  They too all refer to properties already held by This Land, secured by previous charges that cannot be added to.  Five properties have three 100% charges against them: 0028, 0029 and the original charge reference.  Others, like 0018 and 0024 have been released from charge 0028 and or 0029, but those charge releases have not been recorded under the original charges 0018 and 0024 themselves.

Finally, in two instances (charges 0002 and 0022), the mortgaged properties have been sold to third parties, and the sales recorded on the Land Registry, but the charges have not been released in either of the charge documents on Companies House.

A word about Charge 0029

The Charge 0029 document dated 2^nd December 2020 puts the value of that facility agreement at £15.6 million.  Yet the corresponding loan closest to that date in This Land Finance Ltd’s audited accounts is for £9.279m, with a repayment date of November 2026 (see first light blue highlighted row in the borrowing schedule table above).  So, presumably the start date was in November or December 2020.  

In July 2024, CCC’s Strategy, Resources and Performance Committee agreed in secret to lend This Land a further £5.9m and add £400,000 to the council's equity investment in TLL.  According to subsequent public documents from the Strategy, Resources and Performance Committee in October 2024, the additional loan was to come from a previously unused drawdown facility on the "last loan" (i.e. the Nov/Dec 2020 loan of £9.279m).  Later the equity investment was dropped, but the £5.9m loan went ahead.  It would have brought the loans against that agreement up to £15.179m – just £400,000 shy of the original facility agreement’s stated total of £15.6m.  The £5.9m facility amendment agreement, dated 30^th August 2024, can be viewed here.  The document refers not to the 2020 agreement, but to an amendment of an original loan facility agreement dated 11^th May 2023.  That is odd because there is no reference to a 2023 loan facility agreement on Companies House or in This Land’s or This Land Finance’s or This Land Development’s audited accounts.  This Land’s outstanding loans to CCC remained at the same £113.8m level for four years, right up to the additional £5.9m loan agreed in July 2024.

There is no reference in the amendment document to any land security as collateral for the risk to the lender of This Land defaulting on its loan obligations.  Also, the agreed interest rate of 7.1% is implausibly low for a short-term, unsecured loan to a company with no creditworthiness, no record of making profits, historical losses of over £50 million, and £113.8m of outstanding debt.  CCC's current and previous local auditors have both commented that there is a significant risk of some or all of that debt not being recoverable.  As one former county councillor implied as far back as October 2020, no rational lender would lend to This Land with its track record.  Nor should CCC have done.

Finally, following the government’s November 2020 ban on councils borrowing from the PWLB “primarily for financial return”, and the amendments to the Prudential Code in December 2021, it would appear that this unsecured loan, in addition to being reckless on CCC’s part, may also have been unlawful.

What does it all mean?

The main finding after examining This Land Development Ltd’s charges on Companies House is that in 2020, CCC and This Land twice knowingly entered into substantial commercial loan agreements that they knew to be highly irregular, if not fraudulent, and that put taxpayers' money at great risk.  At the time, it was anticipated that the government would shortly prohibit councils from borrowing from the PWLB for commercial yield.  CCC and This Land both knew that the latter's cashflow position and short to medium term commercial prospects were dire.  Others might have concluded that that was the moment to admit defeat and wind the company up.  In March 2021, This Land's official total losses were only £20 million.  Now they are £64 million.  In 2020, CCC chose instead to pump more taxpayers' money into the company, just before the government ban came into effect, in the forlorn hope that the extra cash might keep the company afloat long enough to allow it to make pie-in-the-sky mega profits at some future date.  Charges 0028 and 0029 were not loans secured on This Land’s assets that were free from other charges.  They were bogus mortgages that provided zero security to CCC or its taxpayers, and came with an extremely high risk of never being recovered.  That risk manifested itself in March this year, when Mr Hudson secretly wrote off £59.85m of This Land's debt, and all of the authority's £5.85 equity "investment".  The need for those write-offs can be traced back to 2020 and former CFO Chris Malyon's dishonest decision to prop up the zombie company with significant state aid masquerading as commercial loans secured on land assets unencumbered by other charges. 

Why did they do it?

In This Land’s 15-month financial period to March 2021, the company received cash from three sources:

•  £1.2 million from the sale of its first two houses,
• Two loans from CCC totalling £27.879 million (£18.6m + £9.279m)
• Proceeds of £18.211m from the sale of mortaged land to third parties, without TLL repaying the loan principal to CCC.

At 31^st March 2021, This Land had a cash balance of £18.33m, up from £3.78m in December 2019 (see 2020/21 accounts, p29).  Had it not been for the two bogus, unsecured loans, This Land’s bank account would have been £9.01m overdrawn.  Without the irregular loans and the proceeds from the mortgaged land disposals that year, the company’s bank account would have been £27.2m overdrawn.  It would appear that both parties have been covering up This Land’s true commercial position for nearly five years.  Every year since then, This Land has continued to dispose of mortgaged land (over £78m in total), and keeping all the proceeds, with the express written consent of CCC's CFOs, including the current Executive Director of Finance and Resources, Mr Hudson. 

The motives for this course of action seem to be two-fold:

1)      CCC officers and elected members would be prepared to do almost anything to avert and avoid reputational damage.  Pretending This Land is still a going concern is a way to kick difficult decisions into the long grass.  The same mentality exists in 2025 following CCC’s £59.85m (50%) write-off of This Land’s irrecoverable loan debt, and the council leader's insistence that it is not a write-off but a “debt rescheduling”.

2)      Even by 2020, CCC Finance had become accustomed to, and dependent on receiving substantial and growing net revenue from This Land with loan interest income at around 7.35% less loan interest payable to the PWLB at around 2%.  The net income (up to £6.2m/year), was built into CCC’s investment income budgets.  Were it to falter or fail, CCC Finance would need to compensate with savings elsewhere or make cuts to frontline services, as it now has had to do.  The finance department, and perhaps the wider council therefore had another perverse incentive not to address This Land’s declining performance and hopeless financial position, which had its origins in former CFO Chris Malyon's 2016 plan to set up a housing development company principally to bring in net loan interest revenue to the authority.  The original ten page prospectus, approved unanimously by members at the time, with no detailed business case and no public consultation, can be found here.

Who knew about it?

The list of people who were complicit, must have known, or should have known about the bogus unsecured loans in 2020 and in the five years since then, is long.  The names of This Land's senior officers can be found on Companies House.  The names below include those working for CCC with special responsibilities for governance of This Land.

 

A)      This Land Non-Executive Directors appointed by CCC

Quentin Baker: - NED - Jun 2016- Jun 2018 (CCC Monitoring Officer)

Chris Malyon: – NED – Jun 2016 – Jul 2020 (CCC CFO)

Stephen Cox: - NED - Nov 2019 – Apr 2023 (CCC Exec Director: Place & Economy)

Cllr Josh Schumann: - NED - Jul 2020 – Jul 2021

Frank Jordan: - NED – Apr 2023-  (CCC Exec Director of Place and Sustainability)

Cllr Neil Gough: - NED – Jul 2021 – May 2025

 

B)      CCC officers

Gillian Beasley: – CEO – Sep 2015 - May 2021

Stephen Moir: - CEO – May 2021 –

Chris Malyon: - CFO – Nov 2013 – Mar 2021

Tom Kelly: - CFO – Apr 2021 – Mar 2023

Michael Hudson: - Exec Director of Finance & Resources: - Mar 2023 –

Quentin Baker: - Monitoring Officer - 2009 - May 2018

Fiona McMillan: - Monitoring Officer – May 2018 – Nov 2022

Emma Duncan: - Monitoring Officer – Mar 2023 –

Mr Baker has been included above because he drew up the legal mortgage documents that allowed This Land to dispose of mortgaged properties without repaying the mortgage principal.  Mr Malyon and Mr Baker had conflicts of interest because they represented both the borrower and lender in relations between CCC and TLL.

C)     CCC elected members

Cllr Steve Count: - Council Leader and Chair of General Purposes Committee – 2014 – May 2021

Cllr Lucy Nethsingha: - Council Leader and Chair of Strategy & Resources Committee – May 2021 –

Cllr Mark Goldsack: - Chair of Commercial & Investment Committee – May 2020 – May 2021

Cllr Ros Hathorn: - Chair of Assets & Procurement Committee – Jul 2023 – May 2025

Cllr Karen Young: - Chair of Assets & Procurement Committee – May 2025 -

Cllr Mike Shellens: - Chair of Audit & Accounts Committee – 2018 – May 2021

Cllr Graham Wilson: - Chair of Audit & Accounts Committee – Dec 2020 – May 2025

Cllr Chris Boden: - Chair of Audit & Accounts Committee - May 2025 –

Is Cambridgeshire Constabulary institutionally corrupt?

By Andrew Rowson

Background.  Is there any accountability in Cambridgeshire?

Recent posts on this site (here and here) have reported on Cambridgeshire County Council’s (CCC) concerted cover-up of an alleged six-figure benefits fraud by a former Chief Finance Officer.  For up to five years, Mr Chris Malyon personally benefitted from non-executive directorship fees (NED) paid in cash by council subsidiary Cambridge and Counties Bank Ltd, that should have gone to the County Council.  Mr Malyon, who was a non-executive director at the bank between November 2013 and October 2018, repeatedly failed to disclose those taxable benefits in the council’s financial statements.  In his capacity as CFO, he had a statutory obligation to prepare the accounts and to certify them as “true and fair”.  It is possible, indeed more likely than not, that CCC, as his employer, also failed to declare his NED fee benefits in the annual P11D forms it submitted to HMRC to confirm that its employees were paying the correct tax. 

Mr Malyon tendered his resignation from his NED role at Cambridge and Counties Bank on the same date (26^th September 2018) that auditor BDO noted the “omission of remunerative benefits required for inclusion” in its audit completion report (p18)  presented to CCC’s Audit & Accounts Committee.  The audit partner, Lisa Blake, later admitted to me that the above comment in the report did refer to Mr Malyon’s NED fees.  But she did nothing to expose the alleged fraud, in breach of her duties under International Standard on Auditing (UK) 240 (The auditor’s responsibilities relating to fraud in an audit of financial statements - ISA 240).

Both BDO and subsequently Ernst & Young (EY) colluded with the county council in covering up the undeclared benefit fraud, the possible tax fraud and Mr Malyon’s unlawful pay rise in 2017/18 that the Chief Executive Officer (CEO) fabricated to disguise that year’s undisclosed £45,000 NED fee from the bank, as reported on this site.

Seeing both audit firms’ determination to bury the story, in April 2021 I submitted a complaint to Cambridgeshire Constabulary on the matter.  For more than two years, the police also failed to investigate properly.  In particular they failed to challenge CCC’s demonstrably false documents from 2018.  In August 2023, the lead detective inspector announced he was dropping the investigation, but he failed to produce any coherent evidence supporting his decision.  In March this year, the same officer forged a letter, claiming he had written it seven months earlier.  Last month, Cambridgeshire Constabulary’s unaccountable Chief Constable defended his dishonest officer and stated that he would not pursue the matter any further.

The letter below is addressed to Mr Darryl Preston, Cambridgeshire and Peterborough’s Police and Crime Commissioner.

20^th September 2024

Dear Mr Preston,

Is Cambridgeshire Constabulary institutionally corrupt?

In April and May this year I wrote to you about an abortive police fraud investigation lasting over two years, led by a DCI at Cambridgeshire Constabulary.  I asked to meet with you.   In the first letter I went into some detail about how the officer leading the investigation had relied on objectively false documents provided by Cambridgeshire County Council (CCC) that I had shown him were false over two years earlier.

On 24^th May I received a response from Mr Jack Hudson, the Deputy CEO & Director of Governance and Compliance at your office.  Mr Hudson advised me to address my complaint to the Chief Constable, who is responsible for police operational matters.  I accept that was the correct response at the time.  He also wrote that he had forwarded my letters to the Constabulary’s Complaints Review Team (CRT), who would contact me.  I have had no contact from the CRT.

on 18^th August, I wrote a long and detailed letter to Chief Constable Dean, again setting out the key facts and evidence showing how the officer leading the inquiry had ignored irrefutable documentary evidence that comprehensively contradicted the false documents he had relied on.  I also explained how the officer, DCI Rowe, had forged a letter and tried to pass it off as one he had written seven months earlier (see “The final straw” from p14).  I believe that was gross misconduct that demanded prompt and severe action by the Chief Constable.

I copied my letter to my MP and also to Baroness Taylor of Stevenage, Under-Secretary of State at MHCLG with an accompanying letter about the comprehensive six-year cover-up of the alleged fraud by CCC and two audit firms who had colluded with the local authority to bury the scandal. 

I received a disgraceful response on 3^rd September from Chief Constable Dean’s PA, which included an absolute untruth:

“I’m afraid the Chief Constable does not have anything to add to what Detective Chief Inspector Rowe has already relayed to you. We understand that in addition to correspondence from him, he has also visited you to explain the Constabulary’s position on this.”

 

The reference to an additional visit from DCI Rowe was 100% incorrect, as I immediately stated in my response that same day.    I have had no reply from the Chief Constable or from anyone else at the Constabulary since then.  As to “explaining the Constabulary’s position on this”, you, and the wider public need to know what actually took place.  At a virtual Microsoft Teams meeting with DI Rowe (as he then was) last August (not at any subsequent visit to my home), I pointed out for the third of fourth time that the documents CCC had produced in September 2018, (and on which DI Rowe had based his entire investigation) were false and unsupported by any real events or public documents (here and here).  At that point DI Rowe pivoted, and “explained” that I needed to understand that the police had very close links with local government.  The public already knows that.  But that is no justification for the police also to cover up alleged six-figure fraud and corruption by CCC’s former CFO, Chris Malyon, and former CEO, Gillian Beasley.  As I say, unless this is put right we will continue to pay for those fraudulent acts for decades to come in Mr Malyon’s over-inflated pension.  Many holders of public office are implicated, including those who are still determined to cover up the truth.  I include in that list: CCC’s Head of HR Janet Atkin, Council Leader Lucy Nethsingha, Chair of the Audit & Accounts Committee, Cllr Graham Wilson, CEO Dr Stephen Moir, Monitoring Officer, Emma Duncan, and S151 Officer Michael Hudson.  That is not even an exhaustive list of those who knew the facts but did nothing.  Others outside the council who knew and did nothing include the external auditor, Lisa Blake - formerly of BDO, BDO’s Head of Audit and Assurance, Scott Knight, and Mark Hodgson from EY, as I have documented publicly on several occasions.

I believe there can be one of only two explanations for the Chief Constable’s unaccountably rude reply on 3^rd September.  Either:

a)       He did not read my letter, and simply instructed his PA to send the do-nothing response, or

b)      He did read the letter, did see the evidence of DCI Rowe’s gross incompetence and misconduct over his forged letter, but decided to cover it up.

The Chief Constable’s reference to a subsequent imaginary visit from DCI Rowe suggests that the second explanation above is the more likely.  In any event, his response was wholly unacceptable in a number of ways.  It was a breach of his obligations under the Nolan Principles, and a breach of his obligations under the police’s  ethical policing principles and the Guidance for professional and ethical behaviour in policing.

As I mentioned in my first letter to Chief Constable Dean, in today’s Britain it is no longer a surprise for the public to learn that a police authority has been branded institutionally corrupt, racist, misogynistic or homophobic by a reputable public figure.  When I wrote about corruption to the Chief Constable, and accompanied it with indisputable facts, I hoped he would do everything in his power to reassure me, with solid, credible rebuttal evidence, that that was not the case.  Alternatively, if he did acknowledge DCI Rowe’s poor conduct and considered it exceptional, and unrepresentative of his force, I would have expected him to act responsibly and take immediate action to defend the reputation of the public body he leads.  In my opinion, putting aside the facts of the alleged fraud at CCC, any police officer who is found to have lied to a member of the public and forged documents should be summarily dismissed at the very least.

But Chief Constable Dean did neither.  Instead, his response via his PA confirmed my worst fears about the prevailing corporate culture at Cambridgeshire Constabulary, which invariably comes from the top.

 

Everyone is doing it

Last year, the Financial Reporting Council fined KPMG £30m for its misconduct in respect of its Carillion audits, including forgery - the fabrication of documents using dates months before the documents were actually created.  Deloitte, another big-four audit firm, was caught doing the same thing in Canada.  Last year it was fined $1.59m.  There seems to be no limit to the ethical misconduct some auditors today are prepared to sink to.  I have also caught out another county council (West Sussex CC) back-dating documents.  The public expects much higher standards of behaviour from the police.

Yet forgery is precisely what DCI Rowe did with the two-page letter he claimed to have written in the space of five minutes on 24^th August 2023, when in fact he wrote it seven months later, as I demonstrated in last month’s letter to Chief Constable Dean.

I took Mr Jack Hudson’s advice from his letter in May and addressed my concerns directly to the Chief Constable, who was clearly not interested.  There is no point in my going to the Complaints Review Team now, for three very good reasons:

1)      CRT failed to contact me following Mr Hudson’s letter in May,

2)      CRT reports to the Chief Constable, which means it is unlikely they would challenge him, and

3)      Police complaints procedures, as at many other large organisations, have a notoriously poor reputation for objectivity.

I have therefore exhausted my complaint to the Chief Constable, and found his response to be inadequate, indeed, disgraceful.

 

Two-tier policing

DCI Rowe clearly lied about his forged letter.  The lie and the forgery alone invalidate his “investigation”, which in any event was based on Ms Atkin’s false documents.  Cambridgeshire Constabulary is thus not qualified and is evidently far too closely connected to Cambridgeshire County Council to undertake a new investigation into Mr Malyon’s undeclared non-executive director fees and his unlawful 36% pay rise in 2017/18.  I am now taking the matter up my MP, to whom I am forwarding this letter.

There remains the question of ethical standards at Cambridgeshire Constabulary.  When you accepted the office of PCC in May, you signed an oath, and made a commitment to abide by your own Code of Conduct,  which specifically states on page 4:

“The PCC pledges to lead policing for the people and therefore the PCC is not only responsible for their own ethical standards, but for the standards of those in their office and those of the Chief Constable.”

I have shown that the ethical standards of DCI Rowe and Chief Constable Dean fall woefully short of the Nolan Principles, below the police’s own code of ethics, and well below the standard Cambridgeshire taxpayers are entitled to expect. 

It is important to be clear about what it going on here.  It is called two-tier policing, and it is nothing new.  In Britain, when a relatively junior council officer steals from the taxpayer, there is a good chance he/she will be prosecuted and punished with the full force of the law.  But if you are at the top, especially if you hold one of the three statutory offices at a county council, and you steal much larger sums of public money, there is every chance the political establishment will protect you, and even reward you with a six-figure pay-out if you are so toxic you have to be moved on.  I have seen it time and time again.  It is wholly unacceptable.

Taxpayers’ money that funds the police, including Chief Constable Dean’s £178,912 salary (£12,000 higher than the Prime Minister’s), is there to protect the public from criminals, including privileged, white-collar criminals, not to cover up and bury alleged crime committed by senior public servants.

In light of events, I am asking to meet with you to discuss how you will reassure the public that Cambridgeshire Constabulary is not institutionally corrupt, and how it can demonstrate that it is not too close to the County Council. To be clear, I am not asking you to interfere with the operational independence of police officers.  We are some way beyond that now.  I wish to talk with you about the ethical standards of senior police officers – a completely different matter that is a core part of your official responsibilities.

I look forward to hearing from you at your earliest convenience.

Yours sincerely,

Andrew Rowson

They cannot both be correct

By Andrew Rowson

 

Under the Nolan Principles, among other things, public servants are required to be honest and accountable:

“Holders of public office are accountable to the public for their decisions and actions and must submit themselves to the scrutiny necessary to ensure this.”

Accountability is apparently not a requirement at Cambridgeshire County Council (CCC), at least not among some senior officers and elected members.

In a recent post on this site, the authority’s Head of Human Resources, Janet Atkin, was asked to comment on documents she prepared in October 2018 for audit firm BDO.  Those documents contain entirely false information that demonstrably contradicts the public record of real events and other public documents.  In the three weeks since then, there has been no response.

That post centred around a meeting of the Staffing and Appeals Committee held on 8th September 2016.  As chance would have it, CCC’s current leader, Cllr Lucy Nethsingha, attended that meeting as a substitute. 

The official minutes do not record whether the vote was unanimous, but Cllr Nethsingha was among the members who resolved to appoint Mr Chris Malyon to the post of Deputy Chief Executive, adding that title to his Chief Finance Officer role.

The leader too was contacted on 27^th August this year and asked for her recollection of the meeting.  It is important because the approved minutes - the council’s official record of the meeting - make no mention of an interview.  Ms Atkin twice referred to an interview in her documents.  Instead, the minutes only mention a report, which was not made public.  The minutes do not mention a “£10,000 special responsibility allowance”, though Ms Atkin mentions it twice in her documents.  No allowance or any other additional remunerative benefit for Mr Malyon (on top of the amount in the annual pay policy statement) was ever put to the full council for its approval, either in 2016/17 or in any other year.  The council’s own pay policy requires full council approval for any amendment to senior officer pay.  The council thus breached its own written pay policy, and Ms Atkin tried to cover that up with the confidential documents she prepared for BDO, presumably on the instructions of then CEO, Gillian Beasley (see previous post).

The Director of HR's documents and the minutes of that September 2016 committee meeting are irreconcilable.  Both accounts cannot be correct.  If Ms Atkin lied and misled the auditors with incorrect information they later relied on (however stupidly) when considering an objection to the accounts, why is she still in her post?  Alternatively, if the official minutes of that meeting were materially incorrect because they omitted key details about a senior officer's unlawful pay increase, why has that not been investigated?  Like Ms Atkin, the council leader has failed to respond, even to say that it was a long time ago and she cannot recall what took place.  By failing to respond, Cllr Nethsingha has also declined to be accountable,  That makes her party to the cover-up.  Even that is no longer surprising at CCC, since the CEO, Dr Stephen Moir, has written to some elected members, instructing them not to engage with certain members of the public, including, in one case, one of their own constituents.

According to the Director of Human Resources, as the earlier post explained, the secret £10,000 "allowance" was just one component of Mr Malyon’s unapproved £38,000 pay rise and £7,000 additional pension contribution from CCC in 2017/18.  The other component, an implausible, undocumented, unconstitutional, and unapproved CFO regrade, (applied retrospectively), was also set out in Ms Atkin’s CM.docx document that was given to BDO in September 2018.  It was never given to the full council or any committee, and does not exist as a public document.  According to Ms Atkin, it was those two components that explained Mr Malyon’s overall £45,000 remuneration increase in 2017/18.  £45,000 was the exact sum of the non-executive directorship fee (NED) for Mr Malyon’s services at Cambridge and Counties Bank (CCB) in the same year.  The £40,000 fee for his services the previous year (2016/17) at the same 50% owned subsidiary of CCC was the figure BDO auditor Lisa Blake referred to (and later admitted to) in her July 2018 comment about the “omission of remunerative benefits required for inclusion”.  

It is not difficult to see how Mr Malyon managed to pocket those NED fees without declaring them for up to five years.  CCB is 50% owned by CCC, but that ownership is delegated to its Pension Fund.  The Pension Fund’s draft accounts for 2023/24 state:

“The Fund is joint owner, along with Trinity Hall, Cambridge, of Cambridge and Counties Bank (CCB). The Fund has no controlling interest in the Bank and it is included within the Fund’s financial statements as a minority interest. Each shareholder is entitled to appoint one shareholder Non-Executive Director to the Board of CCB. The Fund is represented by an external party to the Pension Fund.”

The external party does not seem to be concerned with governance or scrutiny.

For the 17^th July 2024 meeting of CCC’s Assets and Procurement Committee, the Monitoring Officer, Emma Duncan, presented a report on the governance of council owned companies where the council’s holding is 25% or above.  The table of five companies meeting that criterion did not include Cambridge and Counties Bank.  On 6^th August I wrote to the Monitoring Officer asking why CCB was missing from the list and how CCC manages the governance and scrutiny functions of its 50% holding.  Ms Duncan has not responded.

Returning to Mr Mason’s objection and the demonstrably false information in the Head of HR’s documents, in the five and a half years it took BDO to consider Mr Mason’s 2018 objection, BDO audit partner Lisa Blake had to use her professional judgement and professional scepticism.  She had to assess the incontrovertible, fully referenced documentary evidence presented in Mr Mason's objection and in the October 2018 revised Document F on the one hand, and on the other, Ms Atkin’s transparent lies in her CM.docx and embedded documents, that were wholly unsupported by any public document.  True to form, BDO dismissed Mr Mason’s evidence, and swallowed the lies.  That is because BDO’s Lisa Blake was complicit in the cover-up from 2017/18, and because BDO plainly did not want to do the right thing and acknowledge that its client’s CEO and CFO were involved in alleged abuse of position fraud.  Similar wilful blindness is not unheard of in the audit industry.

After five and a half years, and two days before Lisa Blake stepped down from BDO altogether, this is what the replacement partner, Mr Ciaran MacLaughlin wrote in the January 2024 statement of reasons, a document which, according to BDO’s Head of Audit and Assurance, Mr Scott Knight, spent well over a year being reviewed not only by BDO’s lawyers, but also by Public Sector Audit Appointments Ltd, the company  that appointed BDO and EY to be CCC’s external auditors:

As Document F from 2018 and last month’s letter to the Head of HR show only too clearly, BDO was 100% wrong, and complicit in the cover-up since:

·      There was no due process, and there were no lawful mid-year salary increases in 2016/17 for the Deputy CEO role, or in 2017/18 for Mr Malyon’s CFO role.  There was only Ms Atkin’s dishonest CM.docx document, produced on Mrs Beasley’s instructions, which BDO accepted uncritically.

·       The £45,000 overall increase in Mr Malyon’s remuneration in 2017/18 (£38k + £7k) was the laundered £45,000 NED fee from Cambridge and Counties Bank, as Lisa Blake herself later admitted to me, and as she had already mentioned in her comments about the senior officer’s omitted remunerative benefits.  There is no other documentation to explain that £38k+£7k rise because the March 2017 pay policy statement left Mr Malyon’s pay band unchanged at £95-£100k, and there was no subsequent pay policy statement amendment during 2017/18.

 

The charge sheet

“The simplest way to combat misinformation is with the truth.”

Taylor Swift

Mr Mason and I have been spelling out these truths for the last six years, but the political establishment has gone to extreme lengths to lie, deny the truth, and work against the public interest, evidently because it is embarrassing,  and because all the parties involved appear to be corrupt.  It is time to go public with these accusations.  They are not new and have been made publicly at CCC and to the auditors, and to the Deputy Prime Minister.  It is time to make them more public still.  If I am wrong, then I would expect to receive letters threatening legal action from the parties below.  There have been none to date.  If after this post, there is still no response from the lawyers, then readers will be able to draw their own conclusions.

 

CCC

The two protagonists: Mr Malyon and former CEO Gillian Beasley both retired on generous taxpayer-funded pensions two years before BDO produced its statements of reasons earlier this year.  The charges remain that Mr Malyon stole five-figure, or more likely six-figure taxpayers’ money in total over several years in the form of NED fees from CCB, which should have gone to CCC.  When she discovered this, or when she decided she needed to do something, the CEO laundered the 2017/18 NED fee (£45k) into an unlawful pay rise for her CFO.  Just before the start of the following financial year, in March 2018 Mrs Beasley tried to cover her tracks by dishonestly raising Mr Malyon’s 2017/18 “current salary range” by £30,000 in order to make his effective 33% pay policy statement increase for 2018/19 look more reasonable (see Janet Atkin letter).

CCC’s current CEO, Dr Stephen Moir, the council leader, Cllr Lucy Nethsingha, the deputy leader, Cllr Elisa Meschini, and the Chair of the Audit and Accounts Committee, Cllr Graham Wilson, are all well aware of the facts surrounding Mr Malyon’s unlawful pay rise and other matters, since they were all given briefings by me and/or Mr Mason in 2021 and 2022.  Cllr Nethsingha’s current silence over her recollection of Mr Malyon’s unlawful pay rise is unacceptable conduct in a council leader.

“Honesty, no matter how difficult, is a vital part of maintaining high standards in public life and the confidence of the public.  Holders of public office acting in the public’s name must live up to this important principle in the day-to-day operation of their duties, and own up when things go wrong.”

Jane Ramsey – Committee on Standards in Public Life

 

BDO

Even if BDO’s lawyers were unaware of Mr Malyon’s undeclared NED fees over at least two years, and possibly up to five years (which seems unlikely), they could not have been unaware of the unlawfulness of Mr Malyon’s £38k+£7k pay rise.  That is because of the high profile, analogous case in 2022 of Northumberland CC’s former CEO DaljitLally’s unapproved, and therefore unlawful “international expenses” of £40,000/yr over several years, which resulted in that authority’s Section 151 officer taking advice from Counsel, and issuing a s114 notice  (unlawful expenditure – s114 and s114A, Local Government Finance Act 1988).  I allege that BDO’s lawyers knew the facts, but did nothing.  If they did not know, they were lied to and misled by Lisa Blake.

In February 2023, Mr Scott Knight, BDO’s Head of Audit and Assurance, publicly took ownership for completing BDO’s much delayed investigations into Mr Mason’s two objections from 2017 and 2018, which included Mr Malyon’s undisclosed NED fees and unlawful pay rise, and the nine figure false accounting of City Deal grants.  He promised the statements of reasons in “a matter of a few weeks, rather than anything longer than that”.  In the end, it took a further 51 weeks before Mr Mason received his two statements of reasons, a delay twice as long as the Code of Audit Practice recommends for local auditors to consider an objection from the start.  I submit that it is not remotely credible that Mr Knight was unaware of the true facts.  He too did nothing to stop the cover-up of the facts relating to Mr Malyon’s undisclosed NED fees and unlawful £38k pay rise - or indeed of BDO's insistence that the false accounting of City Deal grant revenue complied with the CIPFA Code.

  

Public Sector Audit Appointments (PSAA)

The PSAA is a wholly-owned subsidiary of the Local Government Association (LGA) – a declared political organisation.  PSAA had no excuse for not knowing, or for dismissing the fact that Mr Malyon’s unauthorised 36% mid-year pay rise in 2017/18 was unlawful.  It should not have approved BDO’s statements of reasons.  As with Mr Knight, if the PSAA was unaware of Mr Malyon’s undisclosed benefits from NED fees in the years up to and including 2017/18, it was lied to and misled by BDO and CCC.

When Mr Knight appeared before CCC’s Audit and Accounts Committee in February 2023, the LGA’s Chief Executive was Mr Mark Lloyd.  Before moving to the LGA in 2015, Mr Lloyd was the CEO and Head of Paid Service at Cambridgeshire County Council.  He was the authority’s CEO in 2013 when Mr Malyon was appointed CFO, notwithstanding the latter’ well-known track record for dishonesty at Barnet Council just two years earlier.

I have no evidence to suggest that Mr Lloyd’s unexpected and sudden resignation from the LGA last October, with immediate effect, which produced a five-month vacuum at the top, had anything to do with Mr Malyon’s NED fees, his unlawful cover-up pay rise, or the serial false accounting of City Deal government grants instigated by Mr Malyon and BDO’s Lisa Blake in 2017.

Conclusion

This post began with a reference to the Nolan Principles, introduced by the Committee on Standards in Public Life in 1995.

Nearly thirty years later, in March this year, the same Committee announced an open consultation on accountability within public bodies, which it has noticed sometimes falls short of what the public deserves:

“In recent years we have seen several examples of major failures within public institutions, where it seems that opportunities were missed to address issues before they escalated. We are asking, when things go wrong in public bodies, why does it take so long for problems to be recognised and the leadership to respond appropriately and, most importantly, what needs to change?”

The Committee is expected to publish its findings in the spring of 2025.

Cambridgeshire County Council and the agencies it works with provide a clear case study illustrating one way in which problems are brushed aside for extended periods, and where leadership fails to respond appropriately.

The mechanism for unaccountability at CCC vis-à-vis the Malyon issue is quite straightforward.  Former CEO Gillian Beasley presumably discovered that Mr Malyon had been benefitting from the CCB NED fees and not disclosing them in the accounts at some stage in 2017/18, before Mr Malyon prepared that year’s draft financial statements.  Instead of disciplining her CFO, she covered it up.  She allowed him to prepare the draft accounts in which that year’s £45,000 NED fee from CCB was presented as a bona fide salary increase.  As head of paid service, she was responsible for that.  In fact, Mr Malyon’s footnote 4 to the senior officer’s remuneration table in those accounts presented the entire £38k pay rise plus £7k pension contribution as a consequence of his Deputy CEO appointment the previous year, from which  the records show no additional financial benefit was due.

4. The Deputy Chief Executive and Chief Finance Officer postholder undertakes non-executive directorships at The Cambridge and Counties Bank and This Land Limited, for which CCC received fixed contributions of £45k and £20k respectively (2016/17 £40k and £0). The full remuneration cost for 2017-18 is shown above, along with the cost to CCC for its share. The Chief Finance Officer became Deputy Chief Executive, for which an additional salary amount was payable during 2016-17.

It was only after Mr Mason’s and my first meeting with Lisa Blake on 11^th October 2018, and Mr Mason sending copies of the revised Document F to the auditor, the CEO and all members of the Audit & Accounts Committee, that Mrs Beasley instructed her Head of HR, Janet Atkin, to produce the false narrative in CM.docx and send it to BDO on the afternoon of 19^th October 2018, just a few days later.  She probably knew that Lisa Blake would do her bidding and collude with the cover-up over Mr Malyon’s dishonesty, which ultimately cost local taxpayers many hundreds of thousands of pounds.

As noted on multiple occasions in last month’s letter to Janet Atkin and elsewhere, BDO duly ignored the irrefutable documentary evidence Mr Mason provided that comprehensively disproves CCC’s multiple false and contradictory narratives.  The so-called independent auditor showed no independence or professional integrity, and no professional scepticism.  Instead, the firm dragged out the objection for five and a half years, until well after Mrs Beasley and Mr Malyon had safely retired, before producing two wholly dishonest statements of reasons, from which CCC’s lies about Mr Malyon’s salary rise are reproduced above.

Thereafter, at the 6^th February meeting of the Audit & Accounts Committee this year, CCC’s current CEO, Dr Stephen Moir, who was well aware of the true facts, publicly defended his dishonest and corrupt officers with these disgraceful words:

“What I do want to place on record is, mindful of the individual officers who have had this particular series of issues hanging over them for some considerable time, is to place on record my thanks to them for their resilience, professionalism and tenacity in the face of what has been an unacceptably long period  of concern, challenge and frankly, as we have heard, unjustifiable criticism.”

Thus a corrupt council and its corrupt auditor, backed by lawyers and the PSAA, even today, are working dishonestly and against the public interest to cover up chronic and serious failures at one public institution that is entrusted with spending well over a billion pounds of public money annually.

Mr Knight has yet to reply to my two letters to him regarding his firm’s conduct on the City Deal false accounting and Mr Malyon’s unlawful pay rise.  I am still awaiting replies from Ms Atkin and Cllr Nethsingha about their respective roles in the Malyon scandal and cover-up.  As for the three statutory officers at CCC: the CEO, the s151 Officer, (Mr Michael Hudson) and Monitoring Officer (Ms Emma Duncan), several letters to them in recent weeks have all gone unanswered.  Cambridgeshire County Council has become an accountability-free zone.

“If you are a public office holder, you are expected to lead by example, and also to call out poor ethical behaviour wherever you find it.  If a leader lives up to the principles, promotes and prioritises high standards of ethical behaviour, the institution will follow.” 

  Monisha Shar – Committee on Standards in Public Life

Alleged senior officer fraud, corruption and six-year cover-up at Cambridgeshire County Council

A letter to Cambridgeshire County Council's Service Director, Human Resources

24^th August 2024

Dear Ms Atkin,

Your role in former CFO Chris Malyon’s unlawful £38,000 pay rise and cover-up of undisclosed non-executive directorship fees in 2016/17 and 2017/18.

I am addressing this letter to you because you are the sole remaining senior officer at Cambridgeshire County Council (CCC) who was directly involved in former Chief Finance Officer Chris Malyon’s unlawful £38,000 salary rise in 2017/18.

You may be aware of the analogous case at Northumberland County Council, where the CEO, Daljit Lally, received “international allowances” of £40,000/year that were unlawful because:

a)       They did not comply with the authority’s pay policy statement under s38 of the Localism Act, and

b)      They were not authorised by a decision made by the full council

Following a legal opinion by Mr Nigel Giffin KC in May 2022, the s151 Officer had no alternative but to issue a Section 114 notice on the grounds that the Council or one of its officers or employees had made a decision which involved the Council “incurring expenditure which is unlawful”.

You know that the same applies to Mr Malyon’s £38,000 pay rise in 2017/18.  The secret pay rise did not comply with the authority’s March 2017 Pay Policy Statement (which left Mr Malyon’s salary band unchanged over the previous year at £95k-£100k - see graph below).  In addition, his substantial pay increase over and above the agreed salary band was not the result of any decision taken by a properly authorised decision-maker.  CCC’s pay policy statement for 2017/2018 states unambiguously:

There were no amendments to the policy during 2017/18.  That is evidenced by the absence of amendment resolutions by the full council after the pay policy statement itself was approved by the full council on 27^th March 2017.

The real explanation for Mr Malyon’s unauthorised pay rise in 2017/18, as you know, is that it was to disguise the fact that he had been benefitting from non-executive directorship fees (NED) from Cambridge & Counties Bank (CCB, a company 50% owned by CCC), which he had failed to disclose in the county council’s financial statements he had a statutory duty to prepare and certify as being true and fair.  It is possible Mr Malyon may have stolen up to or even over £200,000 from local taxpayers in this way as far back as 2013/14 (see p8 below) by the time he was secretly awarded that £38,000 pay rise, evidently to spare CCC’s blushes.

Senior council officers, including the current CEO, have been keen to draw a line under this and other scandals that they were briefed on, that were the subject of multiple objections to the accounts over several years, and which took BDO up to six and a half years to produce whitewash statements of reasons for.  But the facts remain that:

a)     According to Counsel's opinion, BDO (and EY) acted contrary to law in failing to thoroughly investigate the objections they had accepted for consideration under s27(3) of the Local Audit & Accountability Act 2014, and

b)      CCC lied to both audit firms, providing them with knowingly false information about Mr Malyon’s pay rises and other matters that the auditors may have relied on before producing their whitewash reports.

This scandal is not going away just because two firms of so-called independent auditors did their client’s bidding and were complicit in Mr Malyon's alleged abuse of position fraud and/or the subsequent cover-up.  Indeed, you may be aware that only last week, PwC was fined £15 million by the Financial Conduct Authority for failing to report concerns about one of its clients’ fraudulent activity.  A few months ago, the last government spoke about scaling up the fight against those stealing from the taxpayer.  Since the organisations paid by Cambridgeshire taxpayers have declined to act, it is therefore absolutely in the public interest that CCC’s conduct, BDO’s and EY’s conduct, as well as Cambridgeshire Constabulary’s conduct in relation to this episode be aired in public and escalated to the highest authorities.  Furthermore, the fact that it happened six and seven years ago does not make it any less serious.  On the contrary.  Two political administrations under two Chief Executive Officers have attempted to bury the truth and mislead auditors and the police for many years.  That is a damning indictment of the corporate and political culture at Cambridgeshire County Council which, in my opinion, remains institutionally corrupt at the very top.

In this letter I shall go through the part you played in covering up Mr Malyon’s unlawful pay rise.  At the end I shall ask you some questions which I expect you to answer.  Your name appears in CCC's Corporate Leadership Team structure, and even though the word “accountable” was dropped from it earlier this year, that does not relieve you of the duty to submit yourself to the scrutiny necessary to ensure you are accountable for your decisions and actions, as set out in the Nolan Principles.  If I have missed anything in my analysis, I would be grateful if you could assist me.  If you choose not to reply, the public and the relevant authorities will be informed.  I suggest it would be in your personal interest to reply, and with candour. 

Background

On 11^th July 2018, former County Councillor Mike Mason wrote to BDO audit partner Lisa Blake (née Clampin) with an objection to CCC’s draft 2017/18 financial statements.  CCC Finance was copied in.  One part of the objection was about CFO Chris Malyon’s £38,000 pay rise that year to £143,925.  With CCC’s pension contribution on top, Mr Malyon’s total remuneration rose by £45,792 (36%) over the prior year.  There was no formal approval by the full council for that or those pay rises.

On 26^th July 2018, BDO published its audit completion report (ISA 260) for presentation to the Audit & Accounts Committee (A&A) four days later.  On page 18 of the report, under the audit risk labelled “Senior officer remuneration” the auditor wrote:

“The prior year audit identified errors in the disclosure of senior officer remuneration, including inconsistencies with the applicable guidance, omission of remunerative benefits required for inclusion and inaccuracy of other remuneration values disclosed.

Disclosures relating to senior officer remuneration are considered to be material by nature.”

These comments are discussed in more detail below.

On 6^th August 2018, CCC’s final accounts for 2017/18 were signed off by the CFO and Lisa Blake (at the time, Lisa Clampin), without disposing of Mr Mason’s objection from four weeks earlier.

On 9^th October 2018, following a meeting Mr Mason and I had with Lisa Blake, Mr Mason wrote to the auditor and the CEO (Gillian Beasley), and sent every member of the A&A Committee (Chairman: Cllr Shellens) a hard copy of the letter and several attachments.  One attachment - (Document F), which Mr Mason and I had prepared, went into more detail (21 pages) about Mr Malyon’s unlawful 2017/18 pay rise.  In it, Mr Mason asked Mrs Beasley to provide evidence of Mr Malyon’s revised contractual terms and conditions.  The CEO ignored his request.

Ten days later, on 19^th October 2018, you produced a document - CM.docx, which contained three embedded documents.  Clearly the council’s response to Document F, it was handed to BDO to explain Mr Malyon’s pay rise.  As I set out below, it was full of falsehoods intended to mislead the auditor.  In later years it would mislead another auditor, EY, and also Cambridgeshire Constabulary’s Specialist Fraud Investigation Team.

Regrettably, BDO, EY, Cambridgeshire Constabulary, the A&A Committee, Council Leaders and CEOs all appear to be easily duped, or else they decided to support the false narrative, knowing it to be false.  Whatever the cause of their inaction, that does not detract from the untruths you wrote in that document. 

On your own admission, you authored CM.docx, and the two embedded Word documents have your maiden name attached (Janet Maulder).  The first is dated but unsigned.  The second is signed but undated.  The second Word document looks like this in the original Word format.  It seems to have been created in a hurry, since the pagination is askew, and it is hard to believe you sent that letter to Mr Malyon, least of all in that state.  Those letters and CM.docx itself put you close to the centre of the cover-up of the cover-up, if not of the original alleged fraud and corruption.  I have no doubt you acted on Mrs Beasley’s, or perhaps Mr Malyon’s instructions, but again, that is no justification for producing false evidence, especially given your position as Head of HR. I believe you knew that what you wrote was incorrect and dishonest.

Mr Mason only saw CM.docx two years later, after I shared it with him.  BDO did not share it with Mr Mason, contrary to the NAO’s Code of Audit Practice. 

 

Timeline and analysis of a cover-up

According to the NAO’s Code of Audit Practice, local auditors should use best endeavours to complete their investigations of objections they have accepted for consideration within six months (paragraph 5.6).  After two years of BDO failing to conclude its objection into Mr Malyon’s pay rise, I corresponded with the then Chair of the A&A Committee, Cllr Mike Shellens, about it.  By August 2020 he had been ducking and diving for some time.  Unsurprisingly, he failed to produce any evidence to support the lawfulness of the pay rise, because there was none.  He thus turned to the CEO for assistance.  This email string contains correspondence between Cllr Shellens, me, Mrs Beasley and you in August 2020.  The emails are untouched apart from my correcting a minor typo in Cllr Shellens’ email to me in which he also displayed his ignorance of Greek mythology.  The emails should be read from the bottom up.

Cllr Shellens perhaps did not intend to show me the entire correspondence, but his unwitting audit trail evidence of complicity is useful.  Mrs Beasley’s comments about me in her 9^th August email for example are not what one would expect from a CEO with nothing to hide.

In your email to Mrs Beasley on 10^th August 2018, you attached CM.docx, which contained two embedded Word documents, apparently created by V Robertson and S Greene, and a copy of the Staffing & Appeals Committee (S&A) minutes from 8^th September 2016.

In CM.docx, which in your email you admit to preparing, you produced one lie after another that are simplicity itself to expose. 

You created the document on 19^th October 2018.  That was ten days after Mr Mason sent his letter and attachments (including Document F) to Mrs Beasley and Lisa Blake of BDO. 

CM.docx was plainly intended to misinform BDO.  In fact, it is worse than that.  Remember, this was more than two months after BDO had published its unqualified audit opinion on the 2017/18 accounts, despite the acknowledged risk of fraud and materiality by nature of senior officers failing to disclose remunerative benefits.  By this stage Ms Blake was clearly complicit with Mrs Beasley’s unlawful and secret decision to award Mr Malyon the pay rise as a way of covering up his undisclosed NED fees from CCB that the auditor claimed she had identified during the previous audit (see ISA 260 extract above).  Nevertheless, even if Ms Blake had taken the objection seriously, the most perfunctory checks on your note’s contents would have revealed the fabrications, as explained below.

“On 8^th September 2016 Chris was interviewed by Staffing and Appeals Committee and formally appointed to the Deputy role, for which there is a £10k annual special responsibility allowance.” 

There was no interview, and there was no £10k annual special responsibility allowance for the Deputy CEO role, at least not according to the official minutes.  If Ms Blake had bothered to open the minutes of that meeting (which you embedded in the document), this is what she would have read:

You repeat the lie about the interview in the first embedded word document, which is unsigned.  You begin with the improbable opening sentence:

“Further to your interview with Staffing and Appeals Committee on 8^th September 2016…”

If there had been an interview, why was it not mentioned in the minutes?  There is no evidence in the minutes or elsewhere that Mr Malyon even attended the meeting, and there is no mention of any other candidate.  As for the £10,000 allowance, that was not mentioned in the minutes or in any other public document before or since.  You mention it again in that same embedded document:

“You will receive a Special Responsibility Allowance of £10,000 per annum, paid monthly, in recognition of this role.”

On whose authority?  Certainly not the full council.  Had the role come with a £10,000 allowance, it should have been reflected in the March 2017 Pay Policy Statement or in an amendment resolution by the full council, as per the policy (see p1 above).  It was not.  You or Mrs Beasley or Mr Malyon concocted the £10k annual allowance falsehood in 2018, and BDO appeared to accept it without challenge.

“Later in 2016 the decision was taken to repatriate the Chief Finance Officer post from LGSS back to CCC, maintaining the responsibility for the professional finance function.” 

Another lie.  In CCC’s 2017/18 Pay Policy Statement, which was approved by the full council in March 2017, Mr Maylon’s role is still shown under the LGSS directorate, (Local Government Shared Services) not CCC.

“In addition, the Council commenced a review of corporate capacity and services which led to this role taking on responsibility for additional services from January 2017.”

Lie number four.  At the 8^th September 2016 meeting, immediately before the item on appointing the Deputy Chief Executive (with no additional pecuniary benefit) was an agenda item called “Review of the Council’s Senior Leadership Arrangements.”  The official minutes record:

“The Committee received a report detailing a proposed review of the senior leadership structure of the Council. The resignation of the Executive Director: Children, Families and Adults (CFA) and the current interim arrangements for the Director of Children’s Services required the review of the CFA Directorate as a priority.”

There was no mention of the CFO’s role or responsibilities.

At the following meeting of the same committee on 27^th September, one agenda item – discussed in private session, was the appointment of an interim executive director for children, families and adults (Wendi Ogle-Welbourn).  Again, the CFO’s role was not mentioned in the minutes.

The December 15^th 2016 meeting of the S&A Committee included an agenda item called “A Confidential Review of the Leadership Structure for Children, Families and Adults”.  But nothing in the minutes to that meeting mentions additional responsibilities for the CFO role.  Perhaps I missed something. If so, please enlighten me.

Looking further ahead, the 24^th January 2017 meeting was dedicated to the leadership review of the CFA Directorate – not the CFO or Deputy CEO.

The meeting after that, on 21^st March 2017 included the Pay Policy Statement for the 2017/18 financial year.  As noted above, Mr Malyon was still under the LGSS Directorate, and his salary band remained unchanged from 2016/17 in spite of his new Deputy CEO title awarded six months earlier:

The minutes to that meeting contain an interesting comment:

“A Member queried the reference in paragraph 4.3 of the Chief Officer Pay Policy Statement that “The Chief Executive determines the level of increase, if any, to the published pay rates for Chief Officers…”, as it was the Member’s recollection that such decisions had previously been brought to the Staffing and Appeals Committee. It was confirmed that whilst such decisions had been endorsed by the Committee in the past, there was no requirement to do so. The Member suggested that for reasons of transparency and potential conflict of interest, consideration by the Staffing and Appeals Committee should be included as part of the process.”

The remaining S&A meetings during 2017 feature interviews and further discussion about the leadership of the CFA directorate, but the S&A Committee remained mute on the CFO’s role.

Throughout this period, in no meeting of the full council is an amendment resolution to the pay policy statement even mentioned, let alone a salary rise for the CFO proposed or approved.  Clearly, neither auditor (nor Cambridgeshire Police’s Specialist Fraud Investigation Team) fact checked anything they were told by CCC management in relation to Mr Malyon’s pay rise.  The auditors exhibited no professional scepticsm, as the law requires.

The first time the S&A Committee met in 2018 was on March 6^th to discuss the 2018/19 Pay Policy Statement, which is found here.  This is how Mr Malyon’s figures had changed:

That Pay Policy Statement was again produced by the Chief Executive, Gillian Beasley.  Her title is on the cover of the corresponding agenda item document.  All the documents from that meeting can be found here.

In that Appendix 2(a) document, Mr Malyon’s salary band shot up from £95k- £100k in 2017/18 to £116k- £133k in 2018/19 – an increase of up to 33%.  Members of the S&A Committee were not shown Mr Malyon’s correct 2017/18 pay policy statement salary range for comparison (£95k - £100k).  Instead, they were shown a completely false “current salary range” of £125k-£130k, which made the CFO’s new salary range look perfectly reasonable.  In fact, the mid-point of the new salary range, at £124.5k was actually lower than the mid-point of the bogus “current salary range”, at £127.5k.  It is therefore hardly surprising that no member commented on Mr Malyon’s pay rise at that 6^th March 2018 meeting – as the minutes show.  They were lied to and deliberately misled.

Taking into account the facts that:

a)       No public document exists to substantiate any salary rise or award of allowances to Mr Malyon during 2016/17 or 2017/18 other than the two annual pay policy statements (see above), and

b)      there is no evidence in the public record of the full council ever approving any additional salary rise or allowances in 2016/17 or 2017/18,

the Chief Executive’s 2018/19 pay policy statement above is, in my opinion, irrefutable evidence of her dishonesty and complicity in covering up Mr Malyon’s unlawful mid-year pay rise(s) in 2017/18.  It also shows her intent to deceive members of the S&A Committee (and thereafter the full council) into approving Mr Malyon’s disproportionate pay policy rise in 2018/19 without challenge.  I can find no innocent explanation for the entirely false “current salary range” figures, especially since it was Mrs Beasley herself, only a year earlier, who had set out the correct pay policy statement review process (see page 1 above).

The date of Mrs Beasley’s 2018/19 pay policy statement (March 6^th 2018) came well before Mr Mason’s 11^th July objection and Document F in October.  That means that in March 2018, Mrs Beasley was already aware of Mr Malyon benefitting from the CCB NED fees.  Instead of disciplining him and/or immediately dismissing him, the CEO allowed him to keep the undisclosed benefits while she attempted to sanitise the situation with the falsified, unlawful and retrospective “current salary range” figures in respect of 2017/18, and the Mr Malyon’s heavily disguised 33% pay rise for 2018/19.  She apparently thought she could slip them past elected members and the public without either noticing.  She was 50% successful in that endeavour.

By the time Lisa Blake signed her 2017/18 audit opinion on 6^th August, with nothing to report, Ms Blake too was aware of the CFO and Deputy CEO stealing from the taxpayer.

In her July 2018 ISA 260 report, Ms Blake’s comment quoted on page 3 above about identifying the senior officer’s “omission of remunerative benefits” during the prior year audit makes no logical sense.  For, if it were true, why did she not mention it at the time, during that earlier audit, and why did she not insist that her client correct the omission in the final 2016/17 accounts?  The public record shows that there were no corrections or adjustments to any senior officer’s salary figures between the draft and final 2016/17 accounts.  Had they been corrected, the final accounts should have shown £145,885 salary, allowances etc. for Mr Malyon, £40,000 higher than the £105,885 disclosed in the 2016/17 draft accounts.  £40,000 was the prior year CCB NED fee for Mr Malyon’s services, as acknowledged in footnote 4 of the senior officer remuneration table on p66 of the 2017/18 audited accounts.

Ms Blake lied in that July 2018 ISA 260 report.  Twelve months earlier, she had no idea about Mr Malyon’s undisclosed NED fee benefits.  She only learned about them fifteen days earlier, when Mr Mason spelled it out in his 11^th July objection.

So why did Ms Blake let the cat half out of the bag by mentioning it at all?  One can only speculate.  My guess is that as at 26^th July, only eleven days before the 2017/18 accounts were signed off, perhaps Ms Blake was undecided whether to reveal the CFO’s dishonesty in her final audit opinion.  If she were to do that, she would have looked foolish not even mentioning remunerative benefits in her ISA 260 report.  In the end though, perhaps she was “persuaded” by the CEO and/or CFO into saying nothing, despite the apparent abuse of position fraud, and despite the acknowledged materiality by nature of those omitted disclosures, because that is how corrupt councils and their sometime corrupt auditors operate.

Two years later, in an unguarded moment in October 2020, Ms Blake admitted to me in a phone call that the “omission of remunerative benefits required for inclusion” in her July 2018 ISA 260 report was a reference to Mr Malyon’s undisclosed NED fees from CCB, which he effectively stole from the taxpayer at least as far back as 2016/17 (£40,000), and possibly as far back as 2013/14 (see below).  Such conduct, which is wholly in keeping with Mr Malyon’s track record for dishonesty and feathering his own nest (see also here and here), also raises the issue of whether he concealed those NED fees from HMRC.  That is a separate issue I have taken up elsewhere.  But, armed with the known facts, Ms Blake should have acted in accordance with ISA 240 (The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements).  She should have alerted the police.  The fact that she did not do that but instead appeared to collude with Mrs Beasley’s cover-up is one more testament to her lack of independence and her venality, in my opinion.  The toxicity of such information being revealed publicly perfectly explains CCC’s multiple cover-ups over the last six years, in which you played a part, and the alleged cover-ups, collusion or staggering incompetence shown by two so-called independent auditors paid many hundreds of thousands of pounds of Cambridgeshire taxpayers’ money for their statutory services supposedly in the public interest. 

I did not make a recording of the phone conversation with Ms Blake, but, as I recently told Chief Constable Nick Dean and my Member of Parliament, Dr Ian Sollom, I would be happy to state under oath in a court of law that Ms Blake did admit that to me over the phone in October 2020.

 

A series of non-coincidences

Between November 2013, when Mr Malyon became a non-executive director at CCB, and 2018, these were the non-executive director fees CCB paid in cash for his services:

CCB's accounting year ends are 31^st December, whilst CCC's financial years end on 31^st March.

Mr Malyon therefore may have stolen over £200,000 of taxpayers’ money that should have gone to CCC before his dishonestly was rewarded with the unlawful £38,000 pay rise in 2017/18.  Together with subsequent pay rises (see graph on p2 above), that set him up for a substantially larger pension on his retirement in March 2021. 

Cambridgeshire taxpayers may be paying for this alleged corruption for decades to come.

It is no coincidence that Mr Malyon’s £38,000 pay rise plus £7,000 pension contribution increase in 2017/18 comes to slightly more than the £45,000 NED fee for his services at CCB in 2017/18.

It is no coincidence that after Mr Mason included Mr Malyon’s pay rise in his 2018 objection to CCC’s accounts, and BDO accepted it for consideration, it took the firm a further five and a half years, and much chivvying from CCC’s Chair of the A&A Committee, from Finance officers (though not Mr Malyon himself) and the current CEO before BDO finally produced its statement of reasons in January this year - three years after Mr Malyon’s retirement, and two and a half years after Mrs Beasley OBE retired.  The statement of reasons was predictably a whitewash.  It could not be otherwise, because to have recorded the truth would have meant BDO admitting Ms Blake had been wilfully blind or party to the alleged criminal conspiracy and cover-up of Mr Malyon’s unlawful pay rise in 2017/18 and his undisclosed NED fees in 2016/17 and possibly earlier years.

It is no coincidence therefore that BDO’s statement of reasons was finally signed off on 29^th January this year not by Lisa Blake, but by Ciaran MacLaughlin, a BDO partner who joined the firm barely seven weeks earlier.

It is no coincidence that two days later, on 31^st January 2024, Lisa Blake, BDO’s National Head of Public Sector Assurance, retired altogether from BDO at the age of 55.

There is one more non-coincidence.  The above-mentioned ISA 260 report in which Ms Blake acknowledged the omission of senior officers’ prior year remunerative benefits required for inclusion, was dated 26^th July 2018.  That is also the date Mr Malyon tendered his resignation from CCB as a non-executive director, after four years and eight months in the role.  CCC has never explained why he stepped down.  Companies House records Mr Malyon’s termination as a director on 26^th October 2018, exactly three months later.  CCB’s audited accounts state that NEDs may be terminated by either party upon three months’ written notice:

My questions to you

I mentioned above that I have no doubt Mrs Beasley or Mr Malyon instructed you to prepare CM.docx and give the note and perhaps the embedded documents to BDO.  Nevertheless, as head of HR, you did play a part in this scandal that has rumbled on for six years, and resulted in whitewash reports from BDO, EY and Cambridgeshire police.  So, in the interests of accountability, I am asking you to answer the following questions:

1)      As head of HR, even in 2016, when did you first become aware of Mrs Beasley’s concerns about Mr Malyon benefitting from undisclosed non-executive director fees from CCB?

2)      Do you have any alternative explanation for Ms Blake’s comments about the omission of a senior officer’s “remunerative benefits required for inclusion” in her July 2018 ISA 260 report?

3)      Do you acknowledge that your statements from CM.docx analysed above are false statements?  If not, please explain the following contradictions:

a.       The S&A minutes of 8^th September 2016 failing to mention Mr Malyon’s interview or any allowance coming from the Deputy CEO role,

b.       The March 2017 pay policy statement failing to reflect Mr Malyon’s “£10,000 annual special responsibility allowance”

c.       The lack of any evidence in a public document of a review of corporate capacity concerning the CFO, or regrade etc. resulting in increased remuneration in 2016/17 or 2017/18,

d.       The lack of any evidence in a public document of any full council approval of any increase in Mr Malyon’s pay in 2016/17 or 2017/18 apart from the two annual pay policy statements.

4)      The two embedded Word documents were created by two different people.  Can you explain why you did not create them?  The apparent creation dates were 13^th September 2016 and 16^th July 2017 respectively.  Were these the true creation dates, or were the Windows automatic date and time settings on a laptop temporarily overridden with earlier dates before those documents were created and saved?

In this letter I have gone a little outside your immediate involvement in the cover-up, because this is for public consumption and the public needs to have the whole picture.  If I have been wrong in any detail above, I hope you will correct me with facts and evidence.  I look forward to receiving your considered response at your earliest convenience.

Yours sincerely,

Andrew Rowson