Council investigation into its own relationship with a community transport operator has led to a heated debate and the manager of the schemes leaving
The manager of CTOs FACT, HACT and ESACT, Jo Philpott, has been forced to resign her position after a damning report from Cambridgeshire County Council
The report (B&CB 1490, 27 July) highlighted significant failings on the part of the council and the CTOs.The £170,000 forensic accountancy report had revealed false claims of the CTOs being registered charities, no separate accounting for the three organisations, and a lack of oversight in grants given by CCC.
In an official statement, FACT said: “In light of recent events, Jo Philpott has decided to resign.” FACT vice-chairman, Councillor Kit Owen said, at a meeting of the audit committee last week, that the discrepancies uncovered by investigator PKF Littlejohn were ‘historic’ but later released a statement agreeing for a ‘need for change.’
In Ms Philpott’s place, the trustees of the organisation has temporarily appointed its former training manager, Steve Shannon.
The PKF report revealed misleading letters from Philpott which she claimed had actually been written by junior members of staff on her behalf, and not checked for accuracy. It uncovered repeated applications for public funding which made false claims about membership and services. In some applications, membership, which stood at 1,339, was overstated by almost 3,700 at 5,000.
The investigation revealed that the organisations had received more than £270,000 funding from CCC over five years, little of which was monitored: ‘…it is not possible to check that monies are used for the specified purpose,’ commented PKF. £202,000 start-up costs given to HACT in the form of grants and a £30,000 loan without a proper Grant Agreement and use of the money was not monitored. State aid regulations which restrict grants totalling above £200,000 in one year were exceeded, and the excess should be clawed back by CCC.
PKF also commented that commercial contracts were awarded to HACT under ‘emergency’ powers but that only one of the eight contracts had formally applied this procedure: ‘CCC’s Head of Passenger Transport has confirmed that there had probably been sufficient time to put the contracts out to tender, however, HACT stated that they would only provide Dial-A-Ride services if the contracts were awarded to them,’ says the report.
PKF concluded that at least one contract was operated by HACT illegally under a Section 22 Community Bus permit, when it should have been using an Operator’s Licence.
On its website, FACT defends the allegations made in the report, saying: ‘The majority of the issues are historic – which we have dealt with.
A number of the issues we have sort [sic] legal advice and acted upon the advice. However as with a number of issues such as State Aid there is not a clear legal definition and different Barristers have given conflicting advice. Nothing has been done for personal gain.
As you will see from the Report where mistakes were made we have accepted them and made changes to ensure they do not occur again.’
The statement concludes: ‘Grant money did not enable the organisation to put in unfair competitive rates to win contracts.’
At last week’s CCC meeting, audit committee member Cllr John Williams said: “I have been waiting to hear – for the whole of today – from FACT for an apology.
“But all I have got so far is like a bank – we’re too big to fail and you have to put up with us because you’ve got no-one else”