FACT quits PSV services amid police investigations

Cambridgeshire-based community transport organisation, Fenland Association for Community Transport (FACT) and allied CTOs ESACT and HACT, are to no longer run PSV operator services.

FACT’s former manager, Jo Philpott, is the subject of a police investigation which has seen emails seized from computers. The organisation issued a statement concerning the inquiry: “Fenland community transport provider FACT are in contact with Cambridgeshire police regarding investigations in connection with an alleged fraud relating to a time period between 2012 and 2018. The investigation is in relation to personal financial transactions during the previous period of management. The organisation itself is not under investigation, and we are assisting police with their enquiries. The investigation is ongoing and we are unable to make any further comment at this time.”

An audit of FACT’s finances last year discovered little separation between commercial and ‘not for profit’ operations. The investigation found the CTOs may have operated unlawfully in several respects. Following the findings, the CTOs rapidly set up trading arms running with O licences.

The county council auditor concluded that the new commercial operations were cross-subsidised with loans from the CT. The report says no interest is being paid on the loans and no formal loan arrangement was made, crossing the line with HMRC and Charity Commission rules. Among loans made was one for £152,000 to Fenland ACT Trading Ltd, the commercial company to which tendered business was transferred.

The report also says that the costs of shared staff and vehicles are not accounted for, making tax liability uncertain. The commercial operation may have been liable for business rates. It says that, although the trading arm charged commercial hire rates, there was no evidence that vehicles from the CTO fleet had been charged for. There was no clarity over ownership and shareholding in the commercial companies, so it was not clear that the CTOs are the major shareholders.

Since the independent report last summer into FACT, most of the board members have left, including manager Jo Philpott.

Due to the audit and ongoing discussions concerning state aid grants FACT has been asked to pay back, the organisation has concluded the commercial business overall is not as profitable as expected when first set up. This is why it has taken the decision to cease running licensed PSV operator services and will not be tendering for or renewing any commercial contracts.

FACT has had preliminary discussions with commercial operators to transfer existing contracts under TUPE. This would relieve FACT of the financial burden that currently exists.

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