Westminster Council BabsGate scandal & cover-up – Part 1
On Thursday 29th March 2012 a series of questions were sent by Nutsville to a number of Westminster City Councillors. Those councillors were due to sit that evening on the councils Audit & Performance Committee.
In spite of regular checking of the Nutsville inbox, we were again disheartened that not one of them acknowledged our email.
The email to those councillors contained information that Nutsville hoped would prompt the inglorious members to use the opportunity of the meeting to ask some serious questions of Westminster Councils senior officers.
Nutsville believed the information provided showed that Westminster City Council officers have had little regard for the governance procedure of the council.
We said that Virements (an administrative transfer of funds from one part of a budget to another) of earmarked reserve funds have been made without Cabinet or Cabinet Member / Leader approval which is in flagrant breach of council governance procedure.
We felt it was helpful to remind councillors that Westminster City Council’s constitution made it clear that it was the duty of only elected members to make these decisions and not the unelected council officers.
To most people this would seem obvious and sensible – after all, what’s the point of electing someone who has no control over their portfolio.
The importance of having these rules in the constitution is to prevent council officers shifting money around to directly influence policy decisions, as we believe has been the case at Westminster Council.
The whole process can be serious. If an officer makes out that a particular department is short of funds and underperforming, this could lead to not only unnecessary job cuts but also withdrawal of essential frontline services.
Last December (2011) Nutsville made a series of objections to the District Auditor, along with the clearly stated aim to follow up with more objections in the near future. ( Our post about the objections are here)
From the get-go the District Auditors took our objections seriously setting up a meeting with four of them at their headquarters in Millbank Tower.
As we were obliged to, directly after the meeting we delivered a copy of the same objections to the council.
Amazingly, within a few minutes a reply came back questioning whether what we had submitted were objections at all. It went further to the point of even asking for a copy of the evidence supplied to the District Auditor.
The District Auditor is only answerable to the Queen (yep not even politicians), and it is for them to decide what is, or is not, a valid objection.
It is also up to the District Auditor to choose what evidence is shared with the local council.
So Westminster City Council were not off to a good start, especially as this was the third set of objections we have made against the Council in as many years.
You would think they would have got the hang of it by now.
So we were flabbergasted that when the story the council’s Chief Operating Officer (with responsibility for finance and performance), Barbara ‘Babs’ Moorhouse came out with, it painted an entirely different picture. Even more extraordinarily, she says that in her view this is a matter to be resolved in the next few weeks.
Babs got in front of her Remington, and all fired up with rarely seen passion writes in her report on the 20th February 2012;
A certificate, closing the audits, has not yet been issued for the 2008/09, 2009/10 or 2010/11 audits as the District Auditor is considering a potential objection from a local elector. The Council and the Audit Commission has met and will continue to do so over the coming weeks in an effort to expeditiously resolve these so the audits can subsequently be closed. (view source)
Considering we have more objections to present to the District Auditor for 2010/11, Babs saloon-bar rhetoric is more than a little over confident, to say the least!
One of our objections concerns the shifting of large sums of money around without first seeking the appropriate elected members approval in accordance with the councils constitution. This is called a virement.
That objection has already been accepted by the District Auditor for further investigation.
To many of the council’s finance team our concerns are not news. These issues have been raised with them over the course of many meetings during 2011.
As we were obliged to, we ensured that copies of all our objections have been promptly delivered to the councils head of legal and democratic services.
As you will read and see in the video at the end of this post, it is baffling that, according to Babs, our concerns about the council’s accounts are “news to her”, and instead are the work of a former council employee who surprised everyone with his revelations on his very last day of work.
To help understand Babs reaction to our accounts questions it may first help know a little of her history;
Never out of the media for long, Babs Moorhouse originally worked for the private sector. In one of her last stints for the private sector she spent working for software company Kewill Systems as their finance director. After just two and a half years Babs resigned from Kewill. At the time of leaving, the companies share value was worth £2bn less than when she started. On her watch, ignoring profit warnings and missed forecasts, the share price nose dived. When Babs started at Kewill they were valued at £2.3bn yet on the day she shuffled out with her shoe-box of possessions, the company was worth only £17m. In this case her finance direction only went one-way; down! (view source 1 and view source 2)
At the time Kewill’s Chief executive Paul Nichols said there had been no row over Bab’s departure.
Eventually Bab’s found her way to the public sector, initially as non-executive director for the Child Support Agency. In March 2005 she moved on to the Department for Constitutional Affairs. Understanding that she would climb the public sector ladder, as Babs said herself “it is like a spider’s web of inter-connected relationships and influences”.
Not one to wear out the cushions, Babs was soon off again, this time to the Ministry of Justice.
In May 2007 it became clear she was no shrinking violet and wanted more than just a say in dictating policy when she wrote;
“She [Babs] was not prepared to make the move into the public sector and find herself shunted into the back office, with little or no influence over the strategic direction of the organisation. The opportunity to influence policy debates and manage the interface between policy decisions and the budgetary framework was essential for Barbara.” (view source)
But her move to the Ministry of Justice was not without problems as she told Parliament “we went backwards for a period of time” after problems with the Oracle database system which came to light shortly after Babs got the job. Babs didn’t see the Oracle problem coming (geddit!), but it left the MoJ unable to pay magistrates and suppliers on time. (view source)
The next move for Babs was to the Department of Transport (what could go wrong?) Pretty soon after getting there the wheels started to come off. Her short time ended with her being paid to leave the station which brought Babs further media exposure as news of her £379,372 pay off got out. (view source, page 15)All of this at a time when commuters faced another stinging round of increases in fares. Ungrateful travellers might have been more understanding if they’d known that Babs does have a passion for a greener form of transport than smelly old busses and trains, and that is horses. It’s not cheap to run just one mare, so perhaps her pay off should have been met with more sympathy considering her unfortunate choice of expensive hobby.
It wasn’t long after the unfortunate DfT departure before Babs Moorhouse was back in the news again when her appointment by Westminster Councils chief executive Mike More came to our attention in November 2009. We wrote about Babs Moorhouse’s very colourful past history in this post http://nutsville.com/?p=1280 Many of the comments to that post came from people using the various Whitehall Internet connections judging by their IP numbers, perhaps they were past colleagues just keen to wish Babs on her merry way.
Babs bizarre appointment later made it in to Private Eye’s ‘Rotten Boroughs’ page, which also highlighted her string of past appointments / non-achievements and payoffs from organisations who had benefited from her peculiar financial wizardry.
Despite the bad publicity Mike More put a brave face on his possible gaff, saying:
“I am delighted that Barbara Moorhouse is joining Westminster Council. She has an exemplary record of achievement across the public and private sector and will be a real asset to the council.”
“Barbara beat a very strong shortlist of candidates and has the skills, attributes and qualities that are needed to help lead one of the best performing local authorities in the country.”
So Babs still has one fan at City Hall. She did have two back in July 2011 when the now disgraced former council leader Colin Barrow announced that Babs Moorhouse was to change from being Strategic Director of Finance to become the new Chief Operating Officer, a position she holds to this day.
So this is why it fell to Babs Moorhouse last Thursday to answer our questions about the council’s finances.
She had intended not to appear at last week’s Audit & Performance Committee meeting but was abruptly summoned to attend, perhaps to try to keep a lid on the serious points we had raised.
When stuck in a corner, smear liberally with fiction.
Babs (in a fetching red number reminiscent of the Queen Mother’s wardrobe) looked decidedly uncomfortable, sitting bolt upright at the meeting.
She occasionally looked towards the District Auditor who was sat to her right. Wags may say that she was concerned her outfit clashed with his tie, but it’s clear her glancing appeals for agreement / acknowledgement / lifeboat or just hope were not going to be granted.
It quickly became obvious from Bab’s speech that when the mouth stumbles, its worse than the foot.
According to her, the embarrassing questions put by Nutsville were all the work of a disgruntled ex-employee. She took nondescript and made it a superlative departing from facts faster than a train on a leafy track and led the committee members along an altogether erroneous route saying that “We were quite surprised in that it was only on his [the whistle blower] last day that all sorts of issues/allegations have been made.”
As we said at the beginning of this post, we had been to see to the District Auditor about a dodgy virement back in December 2011.
A whistle blower had begun bringing his concerns to the council’s attention months before that.
You would think that Bab’s Moorhouse would have known that the issue on virements is flagged every year, and is even discussed with the Deputy Director of finance. So how come Bab’s seems to have no knowledge of this?
In June 2011, the point was raised again that virements needed Cabinet Member approval and a solid policy needed to be put in place. Yet to our knowledge we know of several occasions where virements have been processed without Cabinet approval, just on Babs’s authority (well who wants to be shunted into the back office? )
On hearing Babs’s explanation a wise politician would reserve judgment, at least until she had provided the promised written answers to our questions.
However one member of the committee was convinced by Babs’s disgruntled mischief making ex-employee story, and he’d obviously made up his mind.
Almost on cue Councillor Ian Rowley appeared like the dog who is always on the wrong side of an opening door.
He asked Babs “If the individual concerned was so concerned why weren’t they raised earlier?”
Well Councillor Ian Rowley why on earth didn’t you ask the Head of Legal and democratic services? You would have discovered that your council was aware of this whistleblowing, (Nutsville has the evidence) 4 months ago.
Babs replied leading the councillor on “Correct, I mean they were participating in many of the transactions that they are now questioning, so it’s slightly bizzare”
Councillor Rowley needed no further evidence other than the fragrant Babs’s testimony saying “If you’re going to be a whistle blower, do it earlier” (with perceptive advice like that its clear why he is a management consultant!)
Rowley then went on to ask Babs where these questions had been circulated.
This gave Babs a chance to explain how annoying this all was, with a number of staff being antagonised telling the committee “Well the Chief Executive, I think a variety of members have received notices, he’s circulated widely with the finance team”…”He’s certainly raised it with the minority party, he’s certainly got on to Nutsville”…. and “ I’m getting faintly bored having seen it in a number of places now” (to which I suppose one should say – don’t go to those places then!)
Stuff it, how did that happen! Nutsville has gone from being banned from the council’s computers, never to be spoken of out loud to being mentioned by the Chief Operating Officer. It was bad enough when the BBC’s Ann Robinson mentioned us, now we’ve sold out and gone mainstream.
Rowley then asked Babs “Is there any issue where you think that employees of the council have been intimidated by this?”
Babs replied “Let’s just say we are considering the behaviour of the individual whether it has been entirely in accordance with the usual rules” (the irony being that the ‘usual rules’ are somewhat of a stranger to Bab’s)
With that Rowley said he was concerned this was about intimidating staff under challenging circumstances. He wanted it relayed to the finance staff that he fully understood the stresses they had been put under by this type of action saying “when it circulates in public it’s a form of a deliberate attempt to intimidate” ending with “I hope that can be minuted as well”.
We believe that if you’re spending public money you should do it in public.
We must admire Cllr Ian Rowley’s gift for being able to decide the facts based just on the testimony of Babs after he admitted not having had the chance to read our email of questions and spread sheets. What a gifted star!
As P T Barnum so famously didn’t say – “There’s one born every minute”
He was right about one thing (surprising we know). He was correct to praise the staff in the finance team who genuinely have worked hard, with 70 hour weeks not being uncommon.
To most people, 70 hour weeks are bad enough, but if you add to that a department ruled by fear and intimidation by morally bankrupt empire builders it rather puts a different light on things.
But that’s for another post, soon!
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