Monday’s extraordinary audit committee meeting; called to discuss the “irregular” grant payments in Pembroke Dock, was an interesting spectacle for an avid Kremlin watcher like Old Grumpy.
When this committee first considered my concerns about this issue almost exactly one year ago, members were told:
“4.3.1 Internal Audit has shared its findings with the Council’s Monitoring Officer who is satisfied that there is no evidence of maladministration or non-compliance with the governance arrangements relevant to the specific schemes or of any lack of competence in officers concerned with the administration of the schemes.”
Another internal audit report to Cabinet on December 2 last year reached exactly the same conclusion.
Emboldened by these reports, Cllr David Pugh – now happily an ex-Cabinet member – launched a savage personal attack at the council meeting on December 12 during which he concluded that I was someone who “didn’t have the truth on his agenda”.
As it turned out, the sticks with which Cllr Pugh sought to beat me turned out to be broken reeds and since then a thick dossier of evidence has been forwarded to the police; the council has been forced to repay a large sum of money to the Wales European Funding Office (WEFO); the recipient of these grants, Mr Cathal McCosker has offered to pay back £180,000 to the council; and the audit committee has been investigating how it all went so horribly wrong.
It is the activities of this committee which I will examine in this post.
Dr Steven Jones, Director of Development, told the committee that staff shortages, a developer who had exploited ‘loopholes’ in a badly written procedure manual, and difficulties with defining which work was eligible for grant aid and which was not were responsible for the fiasco.
Indeed, this last issue was so complex that even after months of negotiations with WEFO they still hadn’t been able to achieve a satisfactory definition.
Cllr Pugh’s bullying tactics having turned out to be an abject failure, the council is now trying to bamboozle us by suggesting that the definition of eligible work is akin to a cross between the three-dimensional pancake geometry and Newton’s laws of motion.
And, this line of reasoning goes: if the combined brains of WEFO and the council’s Development Directorate can’t come up with an answer after several months of trying, how can we expect a poor overworked project officer armed with a dodgy procedure manual to cope.
In fact, as the former chairman Mr John Evans observed, the only thing wrong with the procedure manual is that the council’s European Office routinely ignored its provisions.
Here’s what the procedure manual has to say about eligibility:
“External improvements to the facade are eligible for grant funding (regardless of whether the floor space inside is residential/commercial space). The rationale for this is that the improvements have an impact on the street scene and hence a contribution to increasing footfall in the town centre. In a similar vein, the roof works to the street side elevation of the property would be eligible for grant funding (or depending on the situation of the building, any part of the roof that was having an impact on the street scene).”
That seems clear enough to me.
Let us now examine how these rules have been applied in practice.
No 10 Meyrick Street Pembroke Dock (a McCosker project) has 24 windows.
Eight of these are on the front elevation and a ninth is in the gable end which is clearly visible from the street.
The other 15 can only be seen from the back lane to Park Street – not, I would suggest, one of the town’s busiest thoroughfares.
Yet all 24 windows were grant aided to the tune of 90% which led to an overpayment of well in excess of £10,000 on this item alone.
And this cannot be put down to any ignorance of the rules because I notice in the minutes of the grant panel which discussed 18 Main Street Pembroke on Monday 17 September 2012:
• A query was raised as to whether all of the windows and doors were eligible as currently the cost is only shown in lump (£16k) which does seem very high
By the following Thursday 20th September 2012 it had been concluded:
• MH reported that Windows 7, 9 and 10 were to be ineligible as on the rear of the property. The final budget figure for windows and doors is £11,834. The Grant Summary Spreadsheet has been adjusted accordingly.
So why were McCosker contracts not subject to these rules?
There is also a rather serious issue with payments for ineligible works at no 29 Dimond Street Pembroke Dock – well in excess of £30,000 according to my calculations, including 90% grants on 11 windows only three of which front onto the main street.
As Cllr Pugh told council during his ten minute tirade on December 12:
“If he’d bothered to check, he would see that the main work done in that retail space by bringing a semi-derelict building back into use and is not just the front shop. The bulk of that work was done to the rear and was completed satisfactorily.”
On carefully checking through Pugh’s speech I have come to the conclusion that this was the only true statement it contains.
The problem is that the semi-derelict building at the rear of the shop has been converted into four bedsits and as European Officer Mr Gwyn Evans explained in a FAQ document presented to the audit committee back in September 2013:
Q: Can this grant scheme fund work to residential as well as business properties?
A: No. This grant scheme is strictly only for commercial properties. Many properties in town centres are mixed use, often being in commercial use on the ground floor but in residential use on upper floors. In these cases no internal works in parts of the building used for (or intended to be used for) residential use will be funded by the grant.
Q: Has any property ever received a grant for flats or for a house of multiple occupation?
A: No, this has never happened through this grant scheme. Such works have always been ineligible.
Cllr Jacob Williams pointed out that “No, this has never happened through this grant scheme” was a categorical statement which appears not to be true because work to the four bedsits had been grant funded.
I can provide some help on this point because the final account for 29 Dimond Street was settled in August 2012, long before the FAQ document was even thought of.
Mr Evans had an answer in that the range of buildings housing the four bedsits can be seen through the alleyway leading the rear of Paul Sartori.
Therefore, the argument goes, the improvements have “an impact on the street scene” and therefore they meet the eligibility criteria.
Like all the best spin, this contains an element of truth because the west facing elevation can be seen if you stop and peer up the alleyway.
However, because of the narrow angle of sight you can’t see the windows which are set back in the wall and you certainly can’t see the monopitch roof.
Indeed, even from the backyard of no 29, the roof isn’t visible because it slopes away from you.
As the aerial photograph shows, to be able to see this roof at all (labelled C) you have to walk round to the back of no 31 next door where you may get a glimpse.
Even then, you won’t see the 95 sq metres of slates that the taxpayer grant-aided to the tune of 70% for the simple reason that they just aren’t there (see my post from last month, ‘The roof, the whole roof, and nothing but the roof.’).
And you certainly won’t see the £9,800 of electrical work that was supposed to have been carried out to these four bedsits and which was signed off for a 40% grant amounting to £3,920, by the council’s project officer
Which takes us back to our FAQ document where we read:
Q: Has any property ever received a grant for flats or for a house of multiple occupation?
A: No, this has never happened through this grant scheme. Such works have always been ineligible.
And:
In these cases no internal works in parts of the building used for (or intended to be used for) residential use will be funded by the grant.
As the invoice below clearly shows, this was for work done to the residential properties “1-4 rear of Paul Sartori”.
Alert readers will also notice something strange about the VAT charged on this invoice, but that issue, which goes much wider that 29 Dimond street, will have to wait for another day.
Summon something up
I bumped into Cllr Rob Summons outside county hall again last week and he tells me that, having read my post Time to fake the facts, he still doesn’t accept my interpretation of the use of the word “that” in the Leader’s speech to council on December 12.
Unfortunately, when I asked him to offer an alternative, he was less than forthcoming.
However, in the spirit of fairness, I told him that, if he wanted time to think about it and provide me with his explanation by email, I would publish it, unedited, on this website.
I look forward to hearing from him, or not, as the case may be.