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 27th 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 17th 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 6th 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-Ã -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 11th 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 19th 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 6th 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
