Parties Clash Over LDA Report

After weeks of speculation and anticipation the ‘Forensic Audit Panel’ set up by Mayor of London Boris Johnson to investigate ‘financial irregularities’ at the London Development Agency published its report today and immediately faced claims that it had failed to substantiate the allegations against Ken Livingstone’s administration.

Patience Wheatcroft who chaired the panel said they had uncovered “significant failings in leadership, governance and basic controls within the LDA which have led to our conclusion that the former LDA board was ineffective and, indeed, the LDA Board failed in its responsibilities.”

The panel have singled out the award of £36,900 to the European Federation of Black Women Business Owners between 2003 to 2007 as one area of concern noting that records filed at Companies House suggest the organisation was dormant for much of this period.

It also finds that funding arrangements for the capital’s overseas offices are “‘neither efficient nor coordinated in terms of the messages that various London bodies are sending out to Europe”.

The panel also suggest that management of Trafalgar and Parliament squares “would lie better on an agency basis with TfL or Westminster City Council who would have the necessary infrastructure skills and management, with events being co-ordinated through the events team.”

As well as setting out a vision of a “slimmed down” LDA the panel recommends “significant cost savings” within the ‘GLA family’ which includes the Metropolitan Police Authority and Transport for London.

The report also suggests “There may also be scope for reviewing the list of events offered through Events for London; it is possible that a detailed critical analysis could generate substantial savings, particularly if entire events such as the ‘Rise Festival’ (which cost over £300,000) were cancelled”.

In what some will view as an attempt to distance himself from the report Mayor Johnson told Assembly Members this morning that he didn’t consider himself obliged to accept or act on all of the panel’s recommendations.

Despite the criticisms the report concedes that “in the last 18 months there have been significant improvements” in the LDA’s performance. In addition, and despite City Hall’s attempts to draw attention to criticisms contained in the report, the panel ”examined a number of smaller GLA consultancy contracts in the range £5,000 to £30,000, i.e. beneath the threshold for which full competitive tendering is required. In all cases we established that outputs which appeared appropriate had been received, and that the work was either consistent with one of the Mayor’s statutory function or was part of a Mayoral priority.”

In a statement issued this morning Mr Johnson said he was “studying the report closely and will be discussing it’s recommendations and changes to the GLA and LDA with the First Deputy Mayor, Tim Parker.”

The Mayor also promised to “bring in the necessary changes to the way the two organisations work to deliver greater value for money and real improvements to services.”

Reaction
Liberal Democrat Leader on the London Assembly Mike Tuffrey said he found it “deeply worrying that in answer to my questions at the Mayor’s Question Time meeting this morning, the Mayor refused to commit his administration not to use the LDA as his ‘chequebook’.”

Mr Tuffrey said the LDA should be “a strategic organisation, with clear plans on how it spends public money, transparent to all. It should not be a body that only operates under the direction of the Mayor, his advisors or political appointees.”

Labour’s John Biggs said: “To portray this as some kind of independent report rather than a political hatchet job is to mislead Londoners. It has been compromised by it’s complete lack of independence from day one and as a result ignores both the vast amount of good work carried out by the LDA and the governance reforms already implemented by the out-going board.”

“The Mayor turned down repeated offers to give the panel a semblance of political independence and instead ploughed ahead with his group of Tory Party politicians and members who had decided what they wanted to say before their investigation had begun. I would have been surprised if they had not reached the conclusions they have.”

Ken Livingstone, who earlier this week set out his reasons for not co-operating with the panel said the today’s proposals for a “slimmed down” body “would be disastrous for the LDA”.

Mr Livingstone warned “the report’s proposal that the LDA should fundamentally hand its funds to the boroughs for delivery of programmes would merely lead to the Tory-controlled boroughs cutting their council tax-funded programmes by the same amount, leading to a reduction of overall regeneration investment and spending in London: this is the exact opposite of the investment that is required to deal with London’s growth. The inevitable result will be a deterioration of the economic situation and quality of life in London. The most disadvantaged of Londoners would suffer the worst effects of this proposal.”

In a lengthy statement issued to the media former Mayoral advisor Lee Jasper, who was the focus of many of the media allegations against the LDA, said the panel “have failed to find any evidence whatsoever of fraudulent activity on my part nor have they found any evidence that I unduly influenced LDA decisions.”

At this morning’s Mayor’s Question Time Green Party AM Darren Johnson questioned the Mayor over the fears that the LDA’s work on climate change would be threatened by suggested budget cuts.

The report states “Environment, with 39 posts, is the largest of the seven teams, covering a wide range of environmental issues and the preparation and implementation of six statutory plans. We find it difficult to see how this level of overhead can be justified and staff reductions should be achievable through rationalisation plans, particularly any which are non statutory..”

Mr Johnson said the panel had “weakened the credibility of its report by commenting on areas of work at City Hall which it knows nothing about. Suggesting cuts to the number of staff working on environmental issues has been done on the basis that it is the largest of seven policy teams. Of course it is the largest, as the majority of the mayor’s statutory strategies are environmental. The London mayor must make clear that he is rejecting these aspects of the report and that protection of Londoner’s quality of life is his number one priority.”

The full report is available for download from london.gov.uk