Then and Now - another council-owned investment company failure

 

By Andrew Rowson

This post features events in the timeline of Cambridgeshire County Council's (CCC) wholly-owned housing development company, This Land Ltd.  The company is currently the subject of close scrutiny from the authority's external auditor, KPMG, thanks to its poor financial and commercial results, and the significant risk it now poses to the county council's own finances.

The start-up decision came in May 2016 following a presentation by the authority's Chief Finance Officer and Monitoring Officer, who appointed themselves as the new company's first two directors.  The decision to set the company up and begin lending it large sums of public money came without a detailed business case and without public consultation (in breach of Section 3 of the 1999 Local Government Act).  The extracts below, showing key developments over the last eight and a half years, conclude in February/March 2025, with local auditor KPMG's observations and recommendations in the light of This Land's deteriorating financial position. 

Then

27^th May. 2016. CCC’s Commercial & Investment Committee voted unanimously to set up a new Housing Development Vehicle (HDV): “Cambridgeshire Housing and Investment Company Ltd ” (CHIC – later renamed “This Land Ltd”). 

The extract below is from the May 2016 prospectus presented to members of CCC's Commercial & Investment Committee by the CFO and the Monitoring Officer.  From this and other extracts, it would appear that setting up and running a profitable housebuilding company was secondary in importance to securing net revenue for the council in the first instance by exploiting interest rate differences, even though the loan interest income could ultimately only be generated by the company making profits from building and selling houses:

“The nature of housing developments is that there is a significant time lag from the point at which sites are identified until the point that a revenue stream is created. One way of ensuring that revenue is received by CCC much earlier in this cycle is for CCC to establish a market loan to the HDV. The HDV needs to borrow at market rates in order to avoid state aid regulations but CCC can borrow at far more competitive rates from the Public Works Loan Board and take the margin on the loan in to CCC’s revenue account. CCC will therefore gain approximately 3.0 to 3.5% on everything it lends to the HDV from the point at which the loan is made, not when sales or rents start to be received by the HDV. This will mean that the HDV will be making substantial losses for many years. This is not of concern as this will be within the financial model and long-term business plan of the HDV.”

20^th October 2020.  After four years’ of trading, This Land Ltd’s comprehensive losses totalled £16.5 million, and its outstanding long-term borrowing from CCC was £113.8 million.

CCC - Commercial and Investment Committee – timestamp 1.03.53.

Cllr Chris Boden

“The first thing is, I think many, if not all the Committee will have had the benefit of an email from Mr Rowson that was sent yesterday concerning various other councils and their attempts to raise money through commercial and investment processes.  And I think that is an extremely helpful thing for all Members to read if you haven’t already read it, because it shows just how things can go wrong if they are set up in the wrong way and are not properly monitored and any problems addressed, or if attempts are made to overreach.  And I think it’s really important because this is something which Officers and Members in this Council have learned from.  We’ve learned from mistakes in some other local councils.  There have been some… I’m not going to name any specific names, but there are some dreadful ones in addition to those that have been highlighted by Mr Rowson in his email.  And we have learned from those lessons and we will make sure that we in Cambridgeshire don’t make some of the same mistakes that have been made elsewhere. 

So far as this agenda item is concerned, I think that from our point of view in this Committee it’s important to bear more in mind than just the published figures of This Land Ltd.  We’ve set This Land Ltd up in order to be able to act in a commercial way to be able to achieve certain objectives, at arm’s length from the Council.  We obviously have an interest in the performance, the financial performance of This Land Ltd.  But the inter-relationship between this Council and This Land Ltd is of really vital importance.  And that isn’t really reflected in the figures of This Land Ltd, but relates to the fact that first of all we are receiving significant amounts of interest from This Land Ltd which assists us significantly in revenue terms, and secondly we are effectively, in some respects converting capital into revenue through what we do in This Land, which is also of benefit to the Council.  So when we are looking at the effectiveness from this Council’s point of view of This Land Ltd we don’t just look as though we are an investor at the figures that This Land produces, we also have to think of how else we benefit as a council.  And I don’t think that point always gets across very well, and it’s fairly clear from Mr Rowson’s question that it doesn’t get across to the public as well as it should do.”

25^th November 2020.  Government bans councils borrowing from the Public Works Loan Board (PWLB) for commercial yield (i.e. converting capital into revenue).   CCC stops lending to This Land for the next four years.

10^th December 2021. Extract from an article by Dr Paul Field, published in Local Government Lawyer, “Why the revised Prudential Code matters to monitoring officers.

“In this feature I have shown that the CIPFA Prudential Code is effectively applied by law and that the somewhat fluid question regarding legality of borrowing solely to invest in income producing assets is no longer equivocal, it is now outlawed and will be contrary to the Prudential Code and thus imprudent.

Investments funded by borrowing unconnected with a local authority’s functions can have no place in authorities' Investment Plans or Capital Management Strategies. These policies must be approved on an annual basis by full Council.

Borrowing and investment strategies and practice are liable to be picked up by the local auditor because they will all be out looking for them. As compliance with the Prudential Code is a legal requirement, non-compliance will be the business of the Monitoring Officer as well as the Chief Finance Officer.”

20^th December 2021.  CIPFA publishes the revised Prudential Code for Capital Finance in Local Authorities

2021 - 2024.  This Land Ltd sells £78m worth of mortgaged land

CCC made a loan to This Land shortly before the government's ban was announced in November 2020.  For the next four years, it made no further formal loans to its subsidiary.  However, This Land's last four audited financial statements show that in those four years to March 2024, This Land sold £78.3 million worth of mortgaged land, apparently without repaying the corresponding mortgage balances to CCC (see this recent post for details).  Over that period, This Land's outstanding borrowing from CCC has remained static at £113.8m, which indicates that the company has retained the mortgage principal totalling £55.1m rather than repaying it to its lender.  In other words, over those four years, This Land appears to have kept the entire sale proceeds (including the mortgage principal), to support its own operations, whilst depleting CCC's land security by the same amount.  Over the four years to 31st March 2024, CCC's land security against the risk of This Land defaulting on its loan repayments consequently fell from £80.5m to just £25.4m.  One speculation is that CCC's £6.3m loan agreed in July 2024 (see below) after the four-year gap may have been the result of This Land all but running out of available mortgaged land to sell to keep the company afloat with sufficient cash to pay ongoing expenses and overheads (including its annual £8.6m loan interest burden to CCC).  

9^th July 2024.  In closed session, CCC’s Strategy, Resources & Performance Committee approves a loan of £6.3 million to This Land Ltd sourced by “prudential borrowing”, to provide “short term cashflow support” to its struggling housing development subsidiary.  The loan was not approved by the full Council, and the public has been denied sight of the report recommending the loan, or a copy of the advice that CCC allegedly received that claimed the loan was lawful and compliant with the 2021 Prudential Code amendments.  It is assumed the loan was unsecured.  The £6.3m was split into a £5.9m loan, and a £400,000 equity injection into This Land Ltd.

Now

26^th February 2025.  After eight years’ of trading, This Land Ltd’s comprehensive losses total £50.23 million, and its outstanding debt to its sole shareholder, CCC is around £120 million.  According to loan repayment schedules shown on page 19 of This Land Finance Ltd's 2023/24 audited financial statements, the last of those loans has to be repaid by January 2029.  That schedule does not include the short-term £6.3m loan to This Land agreed in July 2024, which is due to be repaid at the beginning of 2026.

CCC Audit & Accounts Committee meeting.

CCC’s revised draft financial statements for 2023/24, p44:

During 2024-25, the Council has reported that expected income from This Land has been delayed and in July 2024 the Council’s Strategy, Resources & Performance committee received a report highlighting concerns around This Land’s financial performance against its business plan and a request for cashflow support. This reflects a worsening economic outlook for housing developments as well as delays progressing revenue from individual properties to planned timescales. Following advice and analysis, the Council agreed to provide the company short term cashflow support and the Council is currently considering a revised multi-year business plan from This Land. As a result of the latest information and the worsening financial outlook emerging during 2024-25, the Council has revised downwards its future expectations for This Land income in its own business plan and will need to consider the form of financial restructuring, support or expected credit loss as a result of the agreed business plan ahead of its next published accounts for 2024-25.

 

KPMG: Year-end report for the year ended 31^st March 2024

P18 – Recoverability of long-term debtor with This Land Group

“Management have not provided us with a paper or workings for an assessment of Expected Credit Loss (ECL) provision for the This Land Debtor, nor has any provision currently been recognised.  The ECL provision should be equal to the contracted cashflows less the amount of cash (or similar consideration) expected to be received by the Council.  We note that this balance, and the resulting accounting treatment, is highly dependent on This Land’s ability to deliver its future business plan.  While we have not received an ECL paper from management, our review of the latest audited accounts of This Land, performance reports and latest business plans would indicate that the subsidiary is significantly behind plan and there has therefore been an increase in credit risk and a high probability that the subsidiary will default over the lifetime of the loan.  This may result in a material adjustment to the accounts.

Management has sought advice regarding the accounting and broader implications (such as any impact on the Minimum Revenue Provision).  Given that the future business Plan for This Land has yet to be agreed by the Council and is unlikely to be finalised much before the backstop date [28 Feb 2025], we do not expect to be able to conclude on this area.  We have provided some initial comments on the first draft accounting advice.

We understand that disclosure will be made in the final version of accounts to note the deteriorating financial position of the Council’s subsidiary, This Land.”

P49 - Significant Value for Money Risk - Private sector skill and experience.

“The Council does not have the suitable skills and experience to effectively manage the risks associated with a commercial private sector subsidiary facing significant financial and cashflow challenges.”

“Our review of minutes of the Strategy, Resources and Performance Committee shows limited discussions in regard to This Land performance throughout the year, and a review of the Corporate Risk register notes that there is no mention of This Land throughout.

Given current economic uncertainties affecting the construction sector, the continued under-performance of This Land and the various complex options being considered to maximise the Council’s return, we consider it would be appropriate for the Council to have representation on the This Land Board and Strategy, Resources and Performance Committee with appropriate skills and experience.”

“Based on our findings, we have determined that there is a significant weakness in relation to arrangements for economy, efficiency and effectiveness due to the lack of expertise required to oversee and challenge commercial subsidiaries, particularly This Land.”

4th March 2025

At the time of writing, the agenda for the 11th March meeting of Strategy, Resources and Performance Committee has just been published.  The forecast adverse variance for CCC's loan interest income from This Land in 2024/25 has risen again to £7.414m as at January 2025, (-120% of budgeted net income for the year).

From those figures it would appear that ten months into the current accounting year, despite the £6.3m injection of cash last year, This Land remains so strapped for cash that it has been unable to pay even a penny of the £8.565m loan interest to CCC in 2024/25 to support the latter's delivery of frontline services.  That being the case, the likelihood of This Land being able to switch from making £12m/year losses to immediately generating the £40m/year profits in each of the next three financial years needed to repay its debts to CCC by their due dates seems close to zero.  It follows that deferring interest payments and further supporting the company by "restructuring existing loans" so that it can "progress its ongoing activities and work effectively with partners", is just as unlikely to be a workable solution, especially given the external auditor's opinion of the current level of expertise and relevant skillsets among members of the Strategy, Resources and Performance Committee. 

The great land security swindle - Cambridgeshire County Council throws away £55 million

By Andrew Rowson

When private citizens or commercial organisations purchase a property with a legal mortgage, if they later sell it to a third party before paying off all the mortgage, they need to settle the balance with the lender before the lender can release the property title deeds.  

Solicitors are involved to make sure all the proper searches and other paperwork is done properly, holding moneys and deeds in client accounts on behalf of their respective clients.

At Cambridgeshire County Council's (CCC) wholly owned housing development company, This Land Ltd, (TLL) different rules seem to apply.  This Land began life borrowing lots of money from its sole shareholder (CCC), with which it bought land, mostly from CCC, and paid for staff salaries and other overheads.  Because it did not sell its first house for four years, and produced no revenue, the loan interest owing to, and sometimes paid to CCC was sourced from more borrowing from its sole shareholder.  That worked reasonably well for four years, until November 2020, when the government banned councils borrowing principally for commercial yield, which is just what CCC was doing.  It borrowed from the Public Works Loan Board (PWLB) at around 2% interest, and lent on to TLL at around 7.4% interest, taking the difference (up to £6.1m/year) as revenue to support the authority's frontline services.  The arrangement was described by one county councillor in 2016 as "making money out of nothing". 

After the ban, This Land's house sales still fell well short of covering its outgoings (in particular loan interest payments).  To find extra cash, the company resorted to selling its mortgaged land to property developers, but unlike normal mortgages, TLL kept the sale proceeds for itself instead of repaying the mortgages on each land sale.  Thus, in the last four financial periods, long term borrowing has remained static at £113.85m, whilst CCC's land security against the borrowing fell from £80.5m in December 2029, to £25.4m at 31 March 2024 - a loss of security for Cambridgeshire taxpayers of £55.1m.  Following a further, unsecured, and allegedly unlawful £6.3m loan to TLL in July/August 2024, CCC's current land security represents only around 21% of all outstanding loans.

This irregular behaviour was not even done in secret.  The note on Inventory in TLL's audited 2023/24 accounts reads:

How did that work in practice?  What were the solicitors doing, and who at CCC waived the rules in the mortgage contracts that required TLL to settle the mortgage before selling the properties?  TLL's accounts show £78.3m worth of land sales since 2020/21.  One example of a mortgage (charge) of £13.2m in 2019 and satisfaction of the same charge two years later provides a clue as to what has been happening.

In 2019, This Land purchased land from CCC's County Farms Estate in the village of Cottenham, north of Cambridge.  The charge, or legal mortgage of £13.2m between the Lender (or chargee) CCC and Borrower, TLL is filed at Companies House under This Land Development Ltd, one of the This Land group of companies.  The solicitor was LGSS Law Ltd, a law firm in which CCC has a one third ownership.  The CCC officer responsible for the charge was the Head of Finance (see mortgage document, p34). 

The Borrower owns the Property from day one

Over the next two years TLL failed to progress the site, and sold it in March 2021 to the Kier Group of Companies.  The Land Registry records the sale of the site for £12 million + VAT on 26th March 2021, apparently for a loss of £1.2 million.  When loan interest of 7.05% for just over two years is added, the overall loss to TLL on the purchase and subsequent sale of that property would have been in the region of £3.1 million.

The charge (1121 0011 0027) was satisfied in full on 25th May 2021.  Two curious details about the statement of satisfaction are that it was delivered by This Land Development Ltd, not CCC, and its interest in the charge is stated as "chargee" (i.e the lender), when the real chargee was CCC, as the 2019 charge document makes clear.

How could the real chargee allow this to happen?   One of the normal conditions of a legal mortgage is that the chargee holds the title deeds, and releases them only when the chargor (borrower) satisfies the charge by paying all the loan principal and interest due to the chargee.  Only then will the borrower have title to the property and be free to pass the title deeds on to another purchaser.

The charge agreement drawn up by LGSS Law in 2019 is unclear.  It claims to be a legal mortgage document.  However, under the "Background" section on p3, the deed states:

"The Borrower owns the Property"

This is underlined later, in clause 6.2 - "Ownership", which states:

"The Borrower is the sole legal and beneficial owner of the Charged Property and has good and marketable title to the Property."

An experienced mortgage professional commented that he had never seen similar statements in a mortgage agreement.  Normally, ownership and the title deeds vest with the lender until the mortgage is repaid in full.

Clause 2 - Covenant to pay states:

"The Borrower shall, on demand, pay to the lender and discharge the Secured Liabilities when they become due."

Beneath clause 4 "Perfection of security",  clause 4.1 "Registration of legal mortgage at the Land Registry" states:

(a)    The Borrower covenants with the Lender not to make any Disposal (other than a Permitted Disposal) of the Property without the Reasonable Consent of the Lender.

(b)    The Borrower consents to an application being made by the Lender to the Land Registrar for the following restriction to be registered against its title to the Property:

"No disposition of the registered estate by the proprietor of the registered estate, or by  the proprietor of any registered charge, not being a charge registered before the entry of this restriction is to be registered without a certificate signed by a conveyancer that the provisions of clause 4.1(a) of a legal mortgage dated 12 April 2019 and made between This Land Development Limited (1) and Cambridgeshire County Council (2) have been complied with or that they do not apply to the disposition."

Nowhere in the deed is it stipulated that the Borrower is required to pay all, or any of the mortgage principal and interest owing to the Lender (CCC) before it (the Borrower) has satisfied the charge.

The bottom line appears to be that under this arrangement, CCC has given the Borrower (This Land Development Ltd) legal ownership and presumably the title deeds at the outset, from the charge registration date, and that without needing to pay CCC the full loan principal or the full interest owing under the agreement, the Borrower is allowed to pass on the property's title deeds and ownership to a third party merely on the strength of a certificate signed by a conveyancer that reflects CCC's "reasonable consent" to do so, even though, the Lender potentially loses some or all of its security in the process - in this case, apparently, £13.2 million of taxpayers' money.

This Land Development Ltd has filed many charges and full or partial satisfactions of charges on Companies House.  In all satisfaction/release documents, This Land Development Ltd is the person delivering the statement.  In most cases it is correctly described as the "Chargor" (Borrower), but in several instances, as in the Cottenham case above, the company is incorrectly described as the "Chargee".  However the company is described, This Land Development Ltd is always the Borrower, not the Lender.  The above arrangement between Borrower and Lender seems to go against the normal conditions protecting the Lender's interests and security.

If This Land Development Ltd has complied with the charge obligations set out in the deed, there should be documents signed by a conveyancer that evidence CCC's "reasonable consent" to waiving the obligation on This Land to pay the mortgage principal and any interest owing in respect of this charge.  According to This Land's audited accounts, the total land security lost by CCC from this and other waivers up to March 2024 is £55.1 million.  That is even higher than This Land's £50.23m overall comprehensive losses since its incorporation in June 2016.

KPMG is investigating

In the summer of 2024, a local elector in Cambridgeshire submitted an objection to CCC's 2023/24 accounts questioning the lawfulness of this very arrangement.  The local auditor (KPMG) agreed to consider the objection, and investigate it thoroughly.  Its findings are still pending.

Three relevant aspects that the auditor may look at are:

a) the lawfulness of the above charge and all others like it, and whether such arrangements meet with the County Council's statutory obligations to secure value for money, and 

b) whether council officers (e.g. the Head of Finance) have acted under delegated authority, without the permission (or knowledge?) of elected members when This Land's obligations to pay the mortgage principal and interest relating to the charges have been waived.  Or, have elected councillors in one or more relevant committees authorised those waivers, perhaps without being aware of the full consequences.

c) the degree to which CCC's and TLL's respective solicitors have acted properly to protect the interests of their clients and to comply with the law in agreeing to the unusual legal mortgage deeds and the manner in which the charges have been satisfied, apparently without This Land paying any of the loan principal back to CCC. 

As KPMG's audit of the 2023/24 financial year approaches completion, the objector and councillors on the Audit & Accounts Committee may soon be provided with the auditor's conclusions.

This Land Ltd's latest Business Plan is confidential

By Andrew Rowson

This Land Ltd's 2023-24 audited accounts

On 7th January 2025, the latest consolidated accounts of This Land Ltd, Cambridgeshire County Council's (CCC) wholly owned housing development company, were published on Companies House.  The record-breaking comprehensive loss for the year to March 2024 was £11.89 million, taking the company's total losses to £50.23 million in its first eight years' of trading.

This Land's total losses are now more than double the company's entire historical revenue from selling houses (£25.04 million).

Selling houses or selling land?

Developing land and selling houses was what This Land was set up to do in 2016.  This is what the Chief Finance Officer wrote then in the 10-page prospectus for the company that became This Land Ltd:

"In view of CCC’s land holdings, and the currently extremely buoyant economic conditions for housing development, there is an opportunity for CCC to develop its own land rather than sell it. Simply selling sites for others to develop, and profit from, is no longer an option for CCC. The scale of the financial challenges facing CCC requires that it has to review every opportunity available to it in order to create an on-going revenue stream that can mitigate the reduction in the services that it otherwise would have to make. ...The vision is to transform CCC from being a seller of sites to being a developer of sites."

However, because the company was unsuccessful at selling houses or turning a profit, following the government's 2020 ban on councils borrowing for yield, it began selling its own mortgaged land to property developers so that it could afford to pay its shareholder the interest on its existing loans.  The property developers presumably profited, whilst This Land's losses continued to grow.  In the first four accounting periods in which it made any sales, This Land's revenue from selling sites has been more than three times higher than the £25m revenue from selling houses.

 

In progressively selling the land it had purchased with borrowed money, but without repaying the loans to CCC, the company's land security against those borrowings fell from 85% in December 2018, to 22% in March 2024. 

In August 2024, CCC agreed to lend This Land a further £5.9m (plus £400k of equity).  Today This Land's land security represents barely 21% of  its liabilities towards its shareholder, CCC.

This Land is still unable to pay the loan interest

A previous post noted that as at last October (2024-25, period 7), CCC was forecasting a £5.77m shortfall in the loan interest receivable from This Land over the current financial year, on account of its cash flow problems.  A month later (period 8), the forecast shortfall rose to £6.27m), or 101% of the net income from This Land that the authority relies on to balance its revenue budget.  The net budget is the difference between the interest CCC pays to the Public Works Loan Board (PWLB) for borrowing the money it lent on to This Land, and the higher commercial rate loan interest income it should receive from This Land (a prime example of the outlawed practice of borrowing for yield).  Going over 100% means CCC is currently anticipating that this financial year, This Land will not even be able to pay it the £2.374m needed to cover the council's own loan interest payments to the PWLB (see here, p5). 

If the above trend continues until March 2025, and This Land cannot pay any of the loan interest CCC depends on to provide frontline services to the public, then the authority will need to find up to £8.57m worth of savings elsewhere, or be forced to make service cuts (pothole repairs?) in order to balance its budget for the financial year.

For how much longer can This Land survive?

Apart from repaying a few, smaller, short term loans to CCC, This Land's sporadic repayments to date have been for loan interest only.  The loan repayment schedule, set out on page 19 of This Land Finance Ltd's latest audited accounts, show when the loan principal amounts are due to be repaid. 

 The £5.9m loan agreed last July (behind closed doors) is due to be repaid in February 2026.

Taking all the above information into account, if This Land Ltd is not to default on repaying the loan principal total of £120m on time, it will need an immediate turnaround from making annual losses of nearly £12m, to making annual profits of £30m on average between now and January 2029, and to convert all of those profits into cash.  If one assumes This Land will break even in 2024-25 (however unlikely that may be), then the profits the company will need to make going forward to repay those loans just in time look like this:

How will This Land Ltd accomplish this task?

All the signs are that This Land is once again running out of cash.  CCC's loan to the company last year appears to have been unlawful - breaching the government's 2020 ban on councils borrowing primarily for yield, and also breaching the 2021 amendments to the CIPFA Prudential Code, which made it clear that:

 "borrowing for debt-for-yield investment is not permissible under the Prudential Code". 

True to form, CCC has concealed the report recommending that loan, asserting that it is confidential.  And so it appears that the purpose of the loan may have been to help This Land pay CCC the interest on its existing loans, thus initiating another vicious cycle.  Bridgewater hedge fund founder Ray Dalio put it this way in a recent article:

"When you get to the point that you have to borrow money to service the debt and interest rates are rising, so that debt service payments rise, so you need to borrow more money to pay them, you’re in what the markets call a death spiral."

However, the growing adverse forecast variances (see above) in This Land's loan interest payments to CCC suggest that the latest loan may already have been spent on other more urgent outgoings so that there was little or none left to pay CCC the loan interest. 

Where is the 2024 Business Plan?

This Land Ltd published annual business plans for 2022 and 2023.  They were both public documents.  Both contained wholly unreliable future cashflow forecasts, and so gave no reassurance that This Land would be able to service its existing debt and repay the nine-figure loans by their maturity dates.  The 2023 business plan for example promised:

"Our cashflow modelling confirms the repayment of all loans and interest by 2029" 

Just twelve months later, This Land requested, and received, a further loan of £5.9m from its shareholder. 

CCC officers promised councillors that This Land's latest business plan (logically the 2024 plan), would  arrive in November 2024, then in December.  In January's agenda papers for the Strategy, Resources and Performance Committee, This Land's business plan (the year is no longer specified), was promised "in the Spring of 2025".  It is an important document because it should explain how the company intends to turn its fortunes around so dramatically.  Local taxpayers are entitled to know.

The agenda contents document for the inaugural meeting of CCC's Shareholder Sub-Committee, to be held on 29th January 2025, announces that members will discuss the long-anticipated This Land Ltd Business Plan.  According to a report written by the Monitoring Officer in July 2024,  the Sub-Committee's duties are to include approving the business plans of council-owned companies.  But if this is indeed This Land's 2024 Business Plan, there seems little point in approving, or even not approving it in January 2025.

Committed to open government?

Unlike its two predecessors, the latest Business Plan is deemed confidential.  No explanation is given other than that...

"it would not be in the public interest for this information to be disclosed." 

The agenda contents document states that the press and public are to be excluded from the meeting before This Land's business plan is discussed.  Members serving on the Sub-Committee cannot already have conducted a public interest test (as required by law) to determine whether to release the document, because their first meeting has not yet taken place.  As with the loan decision last July, council officers and elected members seem determined to breach the rules and conceal vital information from the public.  That is how CCC frequently conducts its business.  At the foot of the same agenda contents document, the committee clerk apparently thought it appropriate to add: 

"The County Council is committed to open government and members of the public are welcome to attend Committee meetings. It supports the principle of transparency and encourages filming, recording and taking photographs at meetings that are open to the public." 

CCC's evident intent to keep the latest business plan from the public cannot but heighten taxpayers' concerns that This Land Ltd still lacks a credible plan to extricate itself from its debt-induced death spiral.  If/when the company collapses, possibly bringing down the County Council with it, it will be long-suffering local taxpayers who will pay for CCC's incompetence and lack of effective governance since 2016 in the form of much higher council tax and service cuts.

For the record, the councillors on CCC's new Shareholder Sub-Committee who have the authority and the duty in the public interest to publish This Land's latest Business Plan on 29th January and support the principle of transparency by holding the agenda item 5 discussion in the open are:

Cllr David Ambrose Smith,

Cllr John Gowing,

Cllr Ros Hathorn,

Cllr Elisa Meschini,

Cllr Edna Murphy. 

 

Would you lend £6.3 million to this company?

By Andrew Rowson

How Cambridgeshire County Council concealed key investment information from the public and its own councillors

On 9th July 2024, Cambridgeshire County Council's (CCC) Strategy, Resources and Performance Committee (SRP) met.  The last item on the agenda was a discussion about a report entitled: "This Land - Monitoring and Financing".  The report is not available for the public to see, because the committee chair (Cllr Lucy Nethsingha) asserted that the item was confidential and that "it would not be in the public interest for this information to be disclosed."  The committee did not conduct a public interest test (as the law requires), before it resolved to exclude the press and public so it could discuss the report behind closed doors.

Three months later, at the October meeting of the same committee, it emerged that the July report had contained a recommendation that CCC make "prudential borrowing" of a further £6.3m - presumably from the Public Works Loan Board (PWLB) to lend on at a much higher commercial rate to its failing housing development company This Land Ltd, thus adding to the latter's outstanding £113.8m debt to its sole shareholder. 

When the company later renamed This Land Ltd (TLL) came into being in 2016, its raison d’être was primarily to allow CCC to exploit the PWLB's preferential low interest rates offered to councils and make up to £6.2 million potential net revenue annually by lending on to its subsidiary housing company.  The company would purchase land from the council, build houses on it, and eventually sell the houses at a profit and pay dividends to CCC.

In the May 2016 "Outline business case" for setting up the housing company, (aka "Housing Development Vehicle" - HDV): CCC's CFO explained to members of the Commercial & Investment Committee why he wanted the authority to set up a housing development company, when it had no in-house knowledge or commercial experience in that risky business sector:

"Simply selling sites for others to develop, and profit from, is no longer an option for CCC. The scale of the financial challenges facing CCC requires that it has to review every opportunity available to it in order to create an on-going revenue stream that can mitigate the reduction in the services that it otherwise would have to make... The vision is to transform CCC from being a seller of sites to being a developer of sites."

He went on to reveal the cunning plan for "making money out of nothing" from the interest rate differential : 

"The nature of housing developments is that there is a significant time lag from the point at which sites are identified until the point that a revenue stream is created. One way of ensuring that revenue is received by CCC much earlier in this cycle is for CCC to establish a market loan to the HDV . The HDV needs to borrow at market rates in order to avoid state aid regulations, but CCC can borrow at far more competitive rates from the Public Works Loan Board and take the margin on the loan into CCC’s revenue account. CCC will therefore gain approximately 3.0 to 3.5% on everything it lends to the HDV from the point at which the loan is made, not when sales or rents start to be received by the HDV. This will mean that the HDV will be making substantial losses for many years. This is not of concern as this will be within the financial model and long-term business plan of the HDV.”

There are two major problems with the above model that its architect and the members who voted unanimously for it appear to have overlooked:

1) the net revenue helping CCC to provide its frontline services only materialises if the HDV can generate business profits from its operations from which to pay CCC the steep loan interest.  If it keeps making losses, it defaults on the loan repayments unless it can take out additional loans from CCC just to pay the interest - thus creating an ever larger debt that becomes increasingly unrepayable. 

2) Four years ago, to nobody's surprise, the last government banned the practice of councils borrowing for yield, and borrowing to fund commercial investments, because so many were abusing the rules.  A year later, revisions to the CIPFA Prudential Code underlined that councils borrowing primarily for yield was imprudent, and therefore unlawful.

"No borrowing to fund commercial investments"

The unambiguity of that unlawfulness was set out in a learned article published in Local Government Lawyer in December 2021 by Dr Paul Feild, and clearly aimed at council monitoring officers.  It was titled: "Why the revised Prudential Code matters to monitoring officers"

TLL has not made a profit in its first nine years since incorporation.  Losses up to March 2023 totalled £38.3 million.  The 2016 promise of making substantial losses for many years has thus been honoured.  In that time, TLL completed just 78 homes, effectively a £492,000 comprehensive loss for each home.

When the long anticipated borrowing for yield ban was introduced, because TLL was already making large seven figure annual losses, it had to find a new source of funding to pay its loan interest to CCC.  It came up with the idea of selling land it had purchased from CCC with borrowed money, so developers could once again take all the profits.  Since developers knew CCC was desperate to sell, it became a buyer's market, and This Land has made nothing but losses on selling land just as it has done selling houses.  Between January 2020 and March 2023, This Land sold £53.4 million worth of mortgaged land.

Selling the mortaged land, but keeping the cash proceeds

A singular feature of these sales of mortgaged land is that This Land did not repay CCC the outstanding mortgage principal, a luxury not extended to other commercial companies or domestic mortgage holders.  In the last three sets of accounts, This Land's long term liabilities have remained static at £113,824,500. 

For some reason not explained to local taxpayers, CCC allowed its subsidiary to do this, even though it meant the loans became increasing unsecured, and therefore risky, with each passing year.  By March 2023 - the balance sheet date of TLL's latest available published accounts, CCC's land security against its subsidiary being unable to repay its loans had fallen to £43,528,491.  In other words, nearly 62% of the outstanding £113,824,500 loans were unsecured against land assets.  Following the most recent loan that committee members agreed in July, that percentage has risen to nearly 64%.

So, for the last four years, TLL has been steadily cannibalising itself to pay the loan interest that is essential for CCC to fill the holes in its revenue budgets.  How long can TLL afford to do this before it runs out of available land it is having to sell to professional housing developers simply to stay afloat?  The signals are not encouraging.

Integrated finance monitoring reports

The same SRP committee that secretly agreed the £6.3m loan last July receives periodic finance monitoring reports from the Executive Director of Resources and Finance, Mr Michael Hudson.  Within those reports is a table - "Appendix 1a - Finances & Resources Detailed Financial Information".  That appendix shows forecast year-end variances during the year, and actual variances at the year-end itself for each service area within Finances and Resources, and for the individual services within each service area.

This Land is one of six services within the "Investment Activity" service area.  The table below from Appendix 1a shows Investment Activity as at March 2024, the end of the 2023/24 financial year.  The actual variance at year-end was a favourable (credit) figure, meaning the net revenue of £6.292m was £159k higher than the budgeted £6.133m revenue for that year.

The ten finance monitoring reports that preceded the July 2024 committee meeting, and the two reports since the July 2024 meeting all show the same granular, service-level budget and forecast information for each service area in the Appendix 1a report.

Now you see it, now you don't

But the Appendix 1a table presented to members at the July 9th 2024 meeting of the SRP committee was different. 

In that table, all the other service areas show the budget and forecast information for each individual service.  But Investment Activity alone shows no detail lines, just the single total for all six services, including This Land.

Furthermore, as early as period 2 (May 2024), the Executive Director of Resources and Finance was already forecasting a sizeable adverse (debit) variance of £1.169 million for its six investments over the new financial year.

Which of the six services shown in the first table above is responsible for the bulk of that adverse forecast variance?  The public and the committee members have not been told, unless members were given the missing detail in the closed session discussion on This Land Monitoring and Financing.   Since we now know that at that same meeting, the committee voted in secret to lend This Land a further £6.3 million, it would have been useful for them and for the public to know at the time whether any of the £1.169m worth of bad news was connected with This Land's ability to pay its loan interest on the existing £113.8m in the current financial year.  

The truth emerged only after the October and December meetings, in which the Appendix 1a table reverts to disclosing all the service-level information, including for Investment Activity.

Investment Activity up to period 5 (August 2024) looks like this:  

This Land's adverse £3.2 million forecast variance is larger than the total for Investment Activity, because of the offsetting favourable variance from Collective Investment Funds.

The same is true in the period 7 report below (October 2024), which includes variances as at period 6 in the left hand column.  This Land's adverse variance forecast for the year has grown to £5.77 million, again appreciably higher than the total, thanks to the two favourable variances in the last two lines. 

It therefore seems reasonable to assume that back in period 2, This Land's adverse forecast may also have been at least as high as the £1.169m total for Investment Activity.  If so, as a percentage of This Land's net revenue budget of £6.191m, it would equate to a 19% adverse variance.

Putting this information together produces this graph.  

The above graph begs the question: why did CCC Finance not predict the full scale of This Land's annual forecast variance back in period 2, when it must have been clear there was a large problem.  What communication does it have with This Land's finance team?  It looks as though each month CCC finance officers were surprised that the forecast annual shortfall had grown substantially.  This must say something about CCC's governance and scrutiny of its wholly owned subsidiary.

A second, and perhaps more serious question, is why did Mr Hudson produce finance monitoring reports for period 2, and present them to the SRP Committee for its 9th July meeting, with all the detailed This Land information removed?  It cannot be accidental.  That was the same meeting in which the report on This Land Monitoring and Financing - presumably written by Mr Hudson - recommended the additional £6.3m loan.  It looks very much as if by July last year,  the Finance team including Mr Hudson already knew that This Land was experiencing severe cash flow difficulties and would struggle to pay the existing loan interest.  So they hid the evidence.  What rational lender in those circumstances puts his head in the sand and lends a failing company millions more?

In the December meeting of the SRP Committee, when the published annual forecast variance was 93% and £5.774m, that figure represented 77% of CCC's entire forecast variance for the year.  Yet the Head of Finance's presentation of the period 7 Finance Monitoring Reports, and the members comments in the ensuing discussion never once mentioned This Land.  There is no mention of This Land either in the official minutes of that meeting.

 Where is the 2024 annual business plan?  Where are the published accounts?

For the past few years, This Land has been asked to produce an annual business plan.  The 2023 plan was presented to members in July 2023.  The finance monitoring reports for period 5 at the 31st October meeting of SRP Committee promised that:

"The council is due to receive the annual business plan from This Land in November"

That evidently did not happen.  On a different page, in a different table, the same report states:

"This Land Business Plan continues to be reviewed and will be brought back to SR&P committee in December."

That did not happen either.  The December report (Annex A) on period 7 promises the business plan, but only mentions "by year-end".  Is it referring to the financial year-end, which would be 31st March 2025?:

"Pressures in the Finance & Resources directorate relate primarily to lower than expected income from the council’s investments, particular in its wholly owned housing company This Land. It is prudent to forecast a pressure in this area, as by year-end the current position of the company will be clearer following the submission of its full business plan and its subsequent review by the council. This may necessitate support to the company or a further earmarked reserve provision by the council, otherwise this forecast overspend will be unwound."

The SRP Committee's next meeting is scheduled for 28th January 2025.  The newly formed Shareholder Sub-Committee, which has the responsibility of approving the business plans of CCC's subsidiary companies, meets for the first time on 29th January 2025.  If This Land's 2024 Business Plan does arrive by the end of this month, it is unclear what value any approval, or even non-approval by either committee would have, given that the 2024/25 financial year end will only be two months away by then.

In every This Land business plan to date, the cashflow forecasts have been completely wrong.  The 2023 business plan for example boasted that the company would not need any more cash injection until 2029.  Twelve months later, This Land was lent another £6.3 million - presumably an unsecured loan.  It would appear that the allegedly unlawful purpose, yet again, is to enable This Land to pay the £8.5m loan interest for 2024/25 to CCC before the end of the financial year.  If so, it would be exactly the scenario the last government and the CIPFA Code tried to avoid with the borrowing for yield ban.  Audit firm Grant Thornton produced a recent Report in the Public Interest for its client - Woking Borough Council, which fell into the same trap as CCC.  Grant Thornton explained it this way:

"Large sums which the Council made to the companies were advanced in the knowledge that they would be used to enable the companies to pay the Council the interest they owed on their existing loans, to maintain day-to-day operations. In some instances, these were revolving loans, and their application resulted in increased borrowing by the Council. These were essentially revenue payments, yet it is clear from statutory guidance, including The Chartered Institute of Public Finance and Accountancy (CIPFA’s) Prudential Code for capital finance in local authorities, that over the medium term debt will only be used for a capital purpose. Although interest costs may be capitalised during the construction phase of projects, loans were made to companies which were not engaged in construction."

Grant Thornton's report shows that while in some respects, Woking's reckless excess was on a different scale to CCC, there are still many similarities, not least the conduct of the senior management team at the time, which in Woking's case have all been replaced:

"The senior management team of the Council was made up of the former Chief Executive, the former Deputy Chief Executive, the former Monitoring Officer and the former s151 Officer. The complementary knowledge, experience, powers and duties of each of the former senior officers should, between them, have been sufficient to have in place arrangements to safeguard the interests of the Council and ensure that its finances were managed prudently, and that all its actions were lawful. Each member of this team should have been able to challenge the others if actions were proposed which would contravene the laws and regulations under which each operates or damage the interests of the Council."

At CCC, why did the Monitoring Officer approve the £6.3m loan last July?  Why did the Executive Director of Resources and Finance conceal important information about This Land's financial and cashflow positions last year from elected members?  Why is the response to This Land's worsening financial position always to throw more taxpayer money at it, rather than consider winding it up before the losses become even greater?  Is it not currently trading whilst effectively insolvent?  And why has CCC's Chief Executive Officer, Dr Stephen Moir (who attended the 9th July 2024 meeting) not challenged the behaviour of the two other statutory officers whom he appointed?  Does he too think that in spite of all the evidence to date, This Land will soon begin making super massive profits and will repay all the interest and £120m of loan principal between now and January 2029?

At the time of writing there is no sign of This Land's 2024 business plan, and its accounts for 2023/24 are now overdue on Companies House.  With elected members also asleep at the wheel, what is it going to take to make someone in authority do the right thing?

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