Barnet, Kent, & a head of energy procurement facing fraud charge

Just to make things more appealing for some of Mrs Angry's more interesting visitors today

*Updated: 16th October, see below:

Here is a fascinating story that has just caught the eye of Mrs Angry.

A couple of months ago, trawling through our borough's online expenditure listings, Mrs Angry was rather surprised to see a lot of very large payments made to Kent County Council.

After making enquiries, it emerged that Barnet buys its energy -electricity and gas - from Kent, via its LASER energy procurement consortium. This is an enterprise set up by Kent as part of the authority's Commercial Services, and is run as a business venture supplying energy to 106 other authorities and public bodies in London and the South East, supposedly bringing savings to all members, and a dividend to Kent County Council.

Kent, of course, is yet another easycouncil style authority with a highly paid Chief Executive and a markedly private sector lookalike type of administration: in fact the CEO is not a CEO, but a 'Managing Director' - currently the redoutable Katherine Kerswell, on a magnificent £197,000 per year, as befits someone who is a recent President of SOLACE, the ubiquitous Society of Local Authority Chief Executives, whose members grow and prosper at such an astonishingly successful rate.

Members of LASER range from London boroughs - from Barking to Wandsworth, and County Councils from Buckinghamshire to West Sussex: also other borough and city councils, and police and fire authorities. Here is further information from the body's website, at www.laserenergy.org.uk :

Since forming in 1989, Laser has rapidly grown to serve a range of members including local authorities and universities.

Laser is part of Kent County Council Commercial Services. Our status as a public sector body means that we are able to trade only with public, voluntary or charitable sector organisations.

Customers

London Authorities	Barking & Dagenham, Barnet, Bexley, Brent, Bromley, Camden, City Of London, Croydon, Ealing, Enfield, Greenwich, Hammersmith & Fulham, Harrow, Hillingdon, Hounslow, Kensington & Chelsea, Kingston, Lewisham, Merton, Newham, Redbridge, Richmond, Southwark, Sutton, Waltham Forest, Wandsworth.
County Councils	Buckinghamshire, Devon, Essex, Hampshire, Hertfordshire, Kent, Northamptonshire, Oxfordshire, Surrey, West Sussex.
City & Unitary Councils	Bedfordshire BC, Bournemouth BC, Poole BC, Canterbury City, Central Bedfordshire, Coventry City, Isle Of Wight, Medway, North Somerset BC, Oxford City, Portsmouth City, Southampton, Southend BC, Worcester City, Luton, Milton Keynes.
Borough & District Councils	Adur, Ashford, Basingstoke & Deane, Broxham, Chichester, Corby, Crawley, Dacorum, Daventry, Dover, East Herts, East Northamptonshire, Eastbourne, Elmbridge, Epsom & Ewell, Gravesham, Guildford, Hastings, Horsham, Kettering, Lee Valley Park Authority, Lewes, Maidstone, Mid Sussex, Mole Valley, North Herts, Northampton, Reigate & Banstead, Runneymede, Sevenoaks, Shepway, South Northamptonshire, Spelthorne, St Albans, Surrey Heath, Swale, Tandridge, Thanet, Tonbridge & Malling, Tunbridge Wells, Uttlesford, Waverley, Wealden, Wellingborough, Welwyn & Hatfield, Woking, Worthing.
Fire & Police Authorities	Essex Fire & Rescue, Essex Police, Kent Fire & Rescue, Kent Police, Northamptonshire Police, Surrey Police.
Universities	Cranfield, Middlesex

According to the website, suppliers to the consortium are - until 30th September 2012 - British Gas and Npower.

Sadly, Mrs Angry must report that all may not be well in the fair county of Kent, or at least within the ranks of LASER, judging from this story from Kent Online:

KCC's head of energy procurement charged with fraud

by Paul Francis

A 42-year-old man has been charged with fraud as part of investigations by Kent County Council into irregularities uncovered in one of its directorates.

Ross Knowles, of Larking Drive, Allington, near Maidstone, was charged on May 10 with two counts of fraud by abuse of position, and one count of money laundering.

He is due to appear at Maidstone Magistrates' Court on July 12.

Knowles is described on the council’s website as head of energy procurement at KCC.

Police were called in to investigate by KCC after the authority uncovered evidence of what is described in a report as "a significant irregularity" in one of its services.

According to an auditor’s report published by the council this week, the case is "significant in scale" and raises questions about the governance arrangements of the service.

KCC declined to answer specific queries in relation to the investigation.

In a statement, a spokesman said: "We are unable to comment further as the matter is subject to on-going criminal proceedings."

Friday, July 01 2011

It would appear that proceedings are continuing, and Mrs Angry will update the story when she can. Clearly this story is of interest to us here in Broken Barnet, not only in terms of the connection as our supplier of energy, but also in the illustration of the wider implications of the procurement process itself.

*Updated 16th October:

For some reason, this post is one of the most revisited of all the Broken Barnet posts: never a day goes by without some local authority landing here in search of information about this story. Maybe it's because of the rather lovely picture of Mata Hari - but more probably the continual visits are due to the lack of notification and information given to the many members of Laser by Kent County Council, as observed by a report in the Local Government Chronicle in August:

Former Kent officer 'used fees to buy Jaguar'

4 August 2011 | By James Illman

"The former Kent CC energy procurement officer charged with multiple counts of fraud used “unauthorised management fees” to buy himself a Jaguar car, details of the charges against him have revealed.

Ross David Knowles of Larking Drive, Allington, who has yet to enter a plea, is alleged to have committed the crimes while holding a senior post at Local Authority South East Region (LASER), the council’s wholly owned energy procurement business, which has more than 100 local authority clients.

Mr Knowles faces two counts of fraud and one of money laundering for alleged crimes carried out between August 2008 and January 2011. He has since left the council.

The charge sheet said: “You [Mr Knowles] dishonestly abused that position [head of energy procurement for LASER] intending thereby to make a gain for yourself by negotiating an unauthorised management fee with Centrica of 0.04p per kWh of energy supplied and diverting that commission into your own bank account, in breach of section 4 of the Fraud Act 2006.”

A second fraud charge related to an “unauthorised management fee with npower of 0.05p per kWh of energy supplied” also in breach of section 4 of the Fraud Act 2006.

There is no suggestion of impropriety on the part of the energy companies.

The third count related to alleged illegal transfers made by Mr Knowles. One of the alleged transfers was made “for the purchase of a Jaguar motor vehicle”.

Mr Knowles will appear in Maidstone crown court on 2 September.

The council’s annual governance statement revealed police were called in to investigate “a significant irregularity” in one of its service areas towards the end of 2010-11.

The statement said: “As a live case under investigation by the police, further detail cannot be provided, but the case did bring to the fore questions about the governance arrangements of the service concerned.

“The council immediately commissioned an external review to ascertain the specific control failures that gave rise to the issue, and is seeking to commission a wider governance review of the service area during 2011.”

A Kent Police Authority statement later confirmed: “Ross Knowles of Larking Drive, Allington was charged on 10 May with two counts of fraud by abuse of position, and one count of money laundering”.

According to its website, LASER has 106 local authorities with more than 60 full-time staff.

The council declined an offer to comment on whether or not costs resulting from the alleged fraud could have been passed on to customer authorities but said it had contacted customers about the alleged fraud.

LGC contacted more than 10 council customers of Kent’s energy procurement service last month but at the time none were aware of the legal developments

The former Kent CC energy procurement officer charged with multiple counts of fraud used “unauthorised management fees” to buy himself a Jaguar car, details of the charges against him have revealed.

Ross David Knowles of Larking Drive, Allington, who has yet to enter a plea, is alleged to have committed the crimes while holding a senior post at Local Authority South East Region (LASER), the council’s wholly owned energy procurement business, which has more than 100 local authority clients.

Mr Knowles faces two counts of fraud and one of money laundering for alleged crimes carried out between August 2008 and January 2011. He has since left the council.

The charge sheet said: “You [Mr Knowles] dishonestly abused that position [head of energy procurement for LASER] intending thereby to make a gain for yourself by negotiating an unauthorised management fee with Centrica of 0.04p per kWh of energy supplied and diverting that commission into your own bank account, in breach of section 4 of the Fraud Act 2006.”

A second fraud charge related to an “unauthorised management fee with npower of 0.05p per kWh of energy supplied” also in breach of section 4 of the Fraud Act 2006.

There is no suggestion of impropriety on the part of the energy companies.

The third count related to alleged illegal transfers made by Mr Knowles. One of the alleged transfers was made “for the purchase of a Jaguar motor vehicle”.

Mr Knowles will appear in Maidstone crown court on 2 September.

The council’s annual governance statement revealed police were called in to investigate “a significant irregularity” in one of its service areas towards the end of 2010-11.

The statement said: “As a live case under investigation by the police, further detail cannot be provided, but the case did bring to the fore questions about the governance arrangements of the service concerned.

“The council immediately commissioned an external review to ascertain the specific control failures that gave rise to the issue, and is seeking to commission a wider governance review of the service area during 2011.”

A Kent Police Authority statement later confirmed: “Ross Knowles of Larking Drive, Allington was charged on 10 May with two counts of fraud by abuse of position, and one count of money laundering”.

According to its website, LASER has 106 local authorities with more than 60 full-time staff.

The council declined an offer to comment on whether or not costs resulting from the alleged fraud could have been passed on to customer authorities but said it had contacted customers about the alleged fraud.

LGC contacted more than 10 council customers of Kent’s energy procurement service last month but at the time none were aware of the legal developments."

In fact Knowles attended Maidstone Crown Court on September 20th to plead not guilty to two offences of fraud by abuse of position, and one of transfering criminal property between August 12th 2008 and January 6th 2011. The case will be heard on March 19th next year.

Broken Barnet: Contract City

Who is Dexter Whitfield?

Well, he is not, as his name might suggest, a jazz trumpeter, or a spin bowler, or a character in a Raymond Chandler thriller. He is, in fact, a bespectacled and amiable academic, an expert in the economics of local government, and tonight he came to give a timely lecture to the Barnet Alliance anti-cuts campaign, on the implications for our borough as we are dragged, kicking and screaming, into the brave new world of One Barnet.

In the easyshaped dystopia that is our benighted borough, our corporate services will shortly be organised through the increasing adoption of 'outsourcing'.

This is a policy of privatisation which, according to the old lie of easybolics, will guarantee the council and the tax payer millions and millions of pounds in savings. In order to pretend that one day this load of shite will actually make millions and millions of pounds of savings, it is apparently necessary to pass millions and millions of pounds of council revenue to consultants who are advising us how to make millions and millions of pounds of savings. Have I got that right, Dexter?

In the States, this sort of local government is referred to as 'Contract City': here in Barnet we are more of a Contract Suburb, but what has failed our American cousins will fail us just as well on a British suburban scale, it would appear.

In Contract City, the only ones to benefit are the companies, of course.

Professor Whitfield painted an all too credible picture of a state where community needs are ignored in favour of the commercial ambitions of the private sector. It is a high risk strategy, with accountability and transparency trodden on by the overriding demands of commercial confidentiality and secrecy surrounding the procurement of contracts (as if that could ever happen here in Barnet, eh, Mr Reasonable?) Scrutiny of contracts is made almost impossible, because of the collusion created by the vested interests of clients and contractors, and this provides the perfect breeding place for corrupt practices and maladministration.

In short, all evidence shows clearly that while the companies who provide contracts profit nicely from the arrangement, the much vaunted promise of savings simply does not materialise. Worse still, the net cost to society, due to effects such as an increase in unemployment, is far huger than any money that might be made on apparently cost cutting deals. The idea that such schemes can create jobs is belied by experience, such as in Middlesborough, where over a ten year period, only 100 jobs were created - and how many lost?

But what can be done to avert the disasters that will ensue if Barnet is given a free reign to outsource as many services as possible? At the moment, only some services are being put out to tender: why? Because of course commercial contractors are only interested in services that are already successful and are obviously desirable. All the awkward, unattractive services, of course, are left unmolested, like a bunch of Tory councillors at a One Barnet Christmas party.

We need desperately to look for alternatives to outsourcing: we need to compel the authority to hold the needs of our community as the most important consideration, not regarded as some 'nice to have' frivolous extra. To do this, the community itself has to take action and assert itself as a force for resistence.

Local union representatives and residents joined in a debate about the implications of Dexter Whitfield's talk here in Barnet. The union leaders recognised the need for unions to become rooted once more in the communities they serve, and residents talked about the ways in which they can work together to find a way to influence the local democratic process, a process which has become alienated from the very people it is supposed to represent.

Remember the risible claim by Lynne Hillan's leadership - that the council wants to forge a new relationship with citizens? As one local man observed, he thought the nature of this relationship was perhaps perfectly expressed by the reception greeting residents at the infamous recent council meeting, where a bullying council, an excess of police officers, and, most intimidating of all, a private security company whose terms of employment remain shrouded in mystery, allowed quasi military bouncers to keep ordinary residents, and, I believe, Professor Whitfield himself, from witnessing the proceedings from the half empty public gallery.

If by a new relationship Hillan meant one in which we have reached new depths of mutual contempt, then I suppose she has certainly acheived this objective.

In Cameron's Britain, Whitfield suggested, the core strategy is financialisation: the charging for services, the destabilisation of the public sector and the 'marketisation' of our society. Along with this we have the bogus personalisation of the - yawn - Big Society, yet another Tory lie, one that tells us that we ourselves can carry the weight of all the social responsibilites we have always looked to the state to bear.

As I went home, and thought about the debate, and the events of the last few months, I reflected that in many ways, Cameron's Big Society was becoming a reality - although not in the way he intended. As Stan Davison, a veteran campaigner for pensioners' rights - and another resident obstructed from attending the council meeting - commented tonight, what is different about the current political crisis is that we are now living in a new world, and we must use the new tools to our advantage. I guess he meant the world of new media, the netroots approach. As he said, we now have "a different kind of basis for a broad unity". Both nationally and locally, people of all backgrounds are coming together to put up resistence to the Tory agenda. It wasn't quite what posh boy originally had in mind, a spot of good works and a ready supply of free labour to fill in the gaps of mass redundancies and cuts in service. This is a groundswell movement, and a very British revolution. Everyone can do their bit, in their own way. Here's my contribution, anyway.