Councillors vow that £8.7m overspend at repairs and maintenance service will 'never happen again'
PUBLISHED: 16:45 23 January 2019 | UPDATED: 09:16 24 January 2019
Councillors have insisted that the oversight failures that led to the disastrous overspend in the repairs and maintenance service will "never happen again".
Scores of residents braved the snow on Tuesday night to attend the extraordinary meeting, which came in the wake of revelations about an £8.7million logged overspend in the highways division in 2017/18, as well as a catalogue of claims about financial malpractice that may have plagued the division for years.
At the meeting, councillors agreed to an urgent review of the audit board’s terms of reference that would see it re-established as a body with decision-making powers.
They also noted an update on a planned ‘Internal Control Commission’ announced by the mayor last week, which will look into a string of past financial failings and look to see how the council can improve its practices.
Members of the public were not given an opportunity to ask questions or air grievances about how poor management of RMS had affected them over the years.
But many of the councillors directed their comments to those who had made the journey to the Old Town Hall, insisting such a blunder would “never happen again”.
Cllr James Asser said: “I’d like to address the people sat in the middle of this room, the public and the Newham residents, because frankly that’s what this is about.
“We’re talking about public money, we’re talking about taxpayers’ money, we’re talking about residents’ money.
“It’s no surprise that this room is full this evening, because people are going to be concerned about it, and angry.
“We should be absolutely clear that this cannot happen again and whatever we find out has to go into the public domain.”
Council reports published ahead of the meeting laid the culpability for the £8.78million logged overspend in 2017/18 squarely at the door of those who took charge of the flagship ‘Keep Newham Moving’ programme.
This planned £100m investment in the borough’s roads, footpaths and streetlights over 10 years had been announced by the previous mayor, Sir Robin Wales, in February 2016.
At the time RMS had been pencilled in for ‘externalisation’ as part of the small business programme and as such was under pressure to present itself as a viable enterprise.
The service under-priced its highways work for 2017/18 and then failed to manage the true costs.
At the same time, some £2m of supplier invoices due for 2016/17 were shifted over into the new financial year.
RMS started 2017/18 on a deficit of £3.5m – rising to a trading deficit of £15.8m by the end of that year.
Cllr Zulfiqar Ali, who chaired the audit board from May to December 2018, said: “RMS had no real capacity to deliver the kind of work that was asked for. The council the estimated cost by the commissioning officers, but it ended up costing more.
“The £100m project has not had any impact as far as this overspend is concerned. That money is still there and we are in the third year of the project, which is still under way.”
The focus of the meeting was the overspend in highways, with little mention of how systemic management failings at RMS could have impacted the rest of the service.
The internal audit launched in summer 2017 had also explored a raft of other allegations including of criminality raised within the division, many of which were eventually dismissed due to ‘insufficient evidence’.
These included questionable bonus and incentives payments, ‘invoice-splitting’, overtime claimed but not worked, non-declaration of gifts and hospitality by RMS staff, and fuel cards provided to contractors at LBN’s expense.
At a previous meeting of the audit board, officers had reported that a “culture of fear” had permeated the RMS depot in Bridge Road, where up to 333 people were reporting in summer 2017.
Speaking at last night’s meeting, Cllr Joshua Garfield said: “It’s one thing to throw about blame on officers; it’s another to completely shirk responsibility altogether.
“This is mishap after mishap after mishap. It’s indicative of a political culture whereby leadership did not exist.
“Don’t take this lightly, members of the public, because if it ever, ever happens again, remind me and others of their words tonight.”
Among the people who attended were former RMS operatives and Newham residents still waiting to have repairs carried out to their homes.
A mother-of-one, who asked not to be named, said she had been waiting for nine months to have the front door of her council home fixed.
She said: “It’s disgusting what I’ve been through. They keep saying ‘the job is booked’ but they’re not following up at all.
“It’s just as ineffective as the old administration. It’s just as poorly managed. Nothing has changed.”