RMS: Scandal in repairs division deepens as shock figures reveal “abuse” of bonus scheme
PUBLISHED: 10:00 22 March 2019 | UPDATED: 10:31 22 March 2019
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An overhaul of the payroll system at Newham Council’s troubled repairs service is under way as it emerges that millions of taxpayers’ pounds have been handed out in staff bonuses.
Last December the Recorder revealed the catalogue of allegations behind an £8.7million overspend in the highways division of council’s repairs and maintenance service (RMS) in 2017/18.
It has now emerged that the payroll scheme in place since 2006 could also have been mismanaged to the tune of millions of pounds.
The Recorder has learned:
•Nearly £2m was paid in 2015/16 alone in staff bonuses and extra pay;
•A handful of workers regularly claimed up to five times monthly basic pay;
•The cheapest repairs are also worth less to operatives, meaning some tenants waited for months for simple jobs;
•Workers receive £3 for every “abortive call” and in some cases logged these while tenants were waiting at home for repairs.
A spokesperson for Newham Council said: “We are planning to bring in a new system as part of the RMS recovery plan, and discussions are taking place with unions over this change.
“The new payroll system will reward staff for the completion of tasks allocated to them with resident satisfaction carrying heavy importance.”
Superfluous jobs, abortive calls and overpayments: What else was happening in RMS?
An ex-manager in the repairs department claimed the practice of “inflating” or falsely logging jobs as “abortive calls” - jobs cancelled because the property could not be accessed - had been commonplace.
In 2016/17 rewiring a two-bed maisonette was worth £605 to an employee, while replacing sealant around a bath could be worth as little as £4.06.
Abortive calls result in a nominal charge of 1p to the council tenant but operatives are paid £3 for each attempt.
The ex-manager said: “Because of the value of jobs, some stay on the system for 200 days because it’s not worth their time. People aborted jobs because they didn’t want to do them or couldn’t park near, or they just weren’t worth enough money.
“That or they would exaggerate the job by adding elements that were superfluous or didn’t need to be done. A plumber would book a stopcock on every single job to get an extra £6 - now multiply that by 10 jobs a day.”
They added: “The system needs a complete overhaul. The bonus scheme needs to be replaced because the one they have got is too open to abuse.
“Some people work all the hours God sends and I have no problem if they’ve earned that money, but the checks and balances weren’t there.”
Internal memos show that in September 2015 a plasterer was suspended from RMS after being accused of “theft, fraud and deliberate falsification of records”.
Over nine months he had been given 189 jobs to do and completed 12 of them. The other 177 were logged as abortive calls.
Between April and August that year the same employee invoiced the council for £14,110.66 in materials.
Despite being a plasterer, these included paintbrushes and decorating sponges, as well as 17 brooms, 70 tubes of sealant and 22 sets of coveralls.
Ordinarily he would have been paid £1,341 but was also given another £16,203 due to make-up pay arrangements.
Elsewhere, figures seen by the Recorder show that from 2014/15 a number of operatives were walking away with up to five times their minimum monthly pay.
In September 2014, one carpenter on a basic monthly wage of £1,978 who worked 165 of an expected 170 hours ended up taking home £9,361.29.
Over the whole of 2015/16 a total of £1.95m was paid out in bonuses and incentives to 140 employees, with ten people walking away with £388,721 between them.
And in the first quarter of 2016/17 alone, £629,531 was paid out to 121 operatives in bonuses, some of whom were earning up to £7,000 a month.
Plans to replace the scheme were relayed to councillors at a meeting of the audit board last March, when the situation was decried as a “scandal”.
At the meeting Cllr Julianne Marriott warned that tradesmen’s salaries encouraged “a reliance on bonus schemes and overtime which would result in people ‘scamming’ the system”.
Lester Hudson, then-chair of the audit board and cabinet member for finance, has been approached for comment.
Terry Paul, the council’s former lead member for housing and current cabinet member for finance, and John Gray, the current lead member for housing, have also been approached for comment.
Back in 2013 a bonus scandal also erupted at Haringey Council in north London when a scheme adopted in 2011 led to £3.7m being dished out to operatives in less than two years.
For the first time Haringey has now confirmed that that problematic system was adopted from the one used at the London Borough of Newham.
A spokesperson added: “Since then our repairs service has been subject to regular scrutiny by independent auditors and no concerns have been raised.”
Separately at Newham, tens of thousands of pounds were deducted from RMS employees’ payslips due to miscalculations and “overpayments”.
In just two months in 2014 some £20,070 in duplicate call-out payments were made to 28 operatives, which were taken back out of their salaries once managers realised.
And after transferring to the One Oracle finance system in 2016, a small typographical error led to 115 employees being paid £26,000 for van hire instead of charged.
An internal memo told employees that “due to a computer error” they would have the payments taken out of future wages - without signing consent forms.
When questioned by the Recorder, the council did not dispute that depending on the type of contracts staff were on, the deductions could have been illegal.
The council spokesperson said: “A number of thorough investigations [into RMS] were unable to find sufficient evidence of criminal activity.
“Anyone with any evidence of fraud within RMS should report it to the council and we will investigate.”
“Absolutely appalling”: Tenants’ waits for repairs
People living in social housing in Newham have told the Recorder about their experiences of interminable waits for simple repairs.
According to government figures, 2,212 council dwellings in the borough underwent some kind of work in 2017/18, out of a total of 15,706.
Tenants have complained of waits several months long for basic issues in their homes to be dealt with, with one person who wrote in reporting water ingress since 2014.
Banke Morakinyo, a 29-year-old teacher and mother-of-one, was offered a property in Plaistow last April.
On arrival she reported “rampant” black mould and an ant infestation but in July learned no jobs had been booked or recorded on the system.
She spent £1,200 of her savings on decorators to paint and treat the mould and mildew in the flat, which a previous tenant had used as a cannabis factory.
On July 23 no-one turned up to an appointment to inspect PVC on the windows, and another job booked for August 15 was logged as an abortive call.
Then on September 12 the flat was broken into and the front door lock completely hacked out of the frame by intruders.
Miss Morakinyo told the Recorder: “The council said they would send a locksmith out within four to six hours. I waited and waited and waited, and no-one came.”
Five emergency repair bookings were made in September, with no-one attending each time, and another was made in November.
But by March this year the door was still not secure. In a formal response to her complaint on February 5, resolution officer Jonathan Smith wrote: “This was clearly not addressed and the repair remains outstanding for which I apologise.”
Miss Morakinyo said: “My plans were to spend September finishing the property. I had stacks of things packed and ready, and my daughter was asking ‘Mummy, when are we going to move in?’
“I thought I was going to have a nice, safe home and wouldn’t have to be looking over my back wondering if someone was going to break in.
“No reason has been given why we’re waiting up until now. It’s left me feeling depressed. I don’t sleep. I’m not motivated in terms of my teaching and there is no empathy from the council.”
Elsewhere, mother-of-two Gemma Walters waited for urgent work to her downstairs bathroom in Stratford for almost six months after plaster was poured down her toilet during a previous job.
The 40-year-old had two jobs opened on the system in August 2018.
On two occasions, first on November 22, 2018 and then on January 29, 2019, she and her teenage daughter waited at home for a repairs team that never showed.
She said: “When you call the repairs service they’re always really helpful and honest about the situation. We’ve had them come before and say ‘There’s no money in the budget so you won’t get this done’.
“On the day they didn’t turn up, they said ‘There’s no parts on the job number’. I’d been sitting at home all morning having taken half a day off work.
“I’m really frustrated. Screaming and shouting isn’t going to get me anywhere but we just need to communicate so that we can get this resolved.”
A spokesperson for the council said: “These cases could have been handled better by RMS and the service is working to learn from these events.
“In both instances there were difficulties in making contact with residents in order to complete the repairs.
“However, all repairs have now been completed or are booked to be completed in the near future.”
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