Tag Archives: Overview and scrutiny

Last chance saloon

27 Mar

!04 studios in this converted office building

Last week Sir Robin’s cabinet approved a loan to Red Ventures, the council-owned property company, of £28.9 million to buy a property in north London.

The property in question is Zenith House (pictured above), a refurbished office building in Seven Sisters. Planning rules for converted commercial properties are much looser than for purpose-built residential buildings and the developer has crammed in 95 studios and 9 flats.

The website advertising this development says the studios “range from 319 to 388 square feet.” Which sounds quite a lot until you translate it into square metres – it’s just 29.6 m2 to 36 m2.

The UK government’s ‘Technical housing standards – nationally described space standard’ sets the minimum gross internal floor area and storage for a one-person dwelling as 37 square metres.

So even the biggest studio in Zenith House is smaller than the minimum. But the standard doesn’t apply because this is a refurbished commercial building.

It is fair to say that if this scheme was it was in Newham and required planning permission, it would never be given.

Despite the high number of units and some fairly optimistic assumptions about occupancy, the return to the council over ten years is paltry.

By the end of year 10  LBN will receive a net income of £113,000.

Overview and Scrutiny has called the decision in and will meet tomorrow to discuss it. Sir Robin has scheduled an emergency cabinet meeting for Thursday at 10 a.m. to receive O&S’s verdict and, if necessary, overturn it.

But why the rush?

The government is changing the rules on ‘prudential’ council borrowing to prevent them taking out loans to fund purely commercial acquisitions and from ‘investing’ outside the borough. These new rules come into effect on 1 April. If Sir Robin doesn’t get this through by close of business on Thursday the deal will fall through.

Let’s hope it does. Why is so much being staked for such a low return, in a scheme that doesn’t provide a single new home in Newham? Sir Robin has only a few weeks left in power. Councillors should not let him bind his successor’s hands by tying up cash in imprudent and sketchy ‘investments’.

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Pensions again

3 Sep

Professional Pensions has reported on Sir Robin’s decision to overrule the recommendation of Overview & Scrutiny (OSC) and proceed to spend £500,000 on developing a ‘special purpose vehicle for Newham’s pension fund.

Forest Gate South councillor Dianne Walls, one of the OSC members who called in the original decision, is quoted at length:

She is concerned about releasing the funds without reference to the Investment & Accounts Committee which “should really look at all of these things very closely”.

Walls believes it is important to look at the proposal in more depth rather than “spending lots of money without due process”.

She said: “It’s a matter of principal, mainly because there’s a lot of decisions made at cabinet and mayor level that have not been open and haven’t been scrutinised properly.”

She added: “As we’ve seen in the past, when decisions are made in haste or without due process, then we make mistakes and we lose money. This is not to say that this actual proposal is wrong – we just don’t know – we need to look at it very carefully before we commit half a million pounds.”

At a time when the council is being forced to make £50m in cuts, she said that spending public money without investigating properly raises the risk of making costly mistakes, which the council “cannot afford to make”.

Cllr Walls noted that call-ins are very rare – only two have been made in 12 years.

And both were on the subject of pensions.

Leader Knows Best

27 Aug

by Rachel Collinson


“I know how this vote is going to go. If the motion was ‘the earth is flat’ councillors Rokhsana, Seyi, Kay and Susan would vote 4-2 for it,” thunders Lester Hudson, as he eyes the Overview and Scrutiny Committee meeting.
 
I’m so offended and shocked by this that I can’t help snorting, despite being in the public gallery.

Hudson continues as though nothing has happened. “If the motion was ‘Geoffrey Boycott is useless at cricket’ they would vote 4-2 for it.” Nobody’s laughing this time. His tirade continues: “I sincerely hope this time, common sense will prevail, but I doubt it.”

There is general uproar, and the female councillors who have been the subject of these personal attacks are rightly livid. (Later on I realise that John Gray – also a member of the rebellion against the Robin Wales regime – is spared the vitriol. Could it be that the Y chromosome is a safeguard?)

A chap to my left passes me a sheet of lined A4 notepaper, with “Attendance Sheet” scrawled at the top. There is a name and one signature on it so far. I pass it on without signing.

A few minutes later, an unnamed lady shouts “Has everybody signed the attendance sheet?”

“I’ve never been asked this before as a member of the public in a council meeting,” I say, annoyed. “It doesn’t say on it how the data will be used, so I didn’t.”

“I just need to know who is here,” she replies.

Well, that much is obvious.

This meeting has been called because Newham Council’s Cabinet have seemingly approved a dubious investment proposal without oversight of the Investment and Accounts Committee. Councillors heard about it in passing and were horrified. They have decided to ask the Mayor to reconsider spending £500,000 without due process.

Council Officers will not let members of the public (or even certain councillors) see more details of what’s proposed. All we know so far is that the Cabinet are attempting to reduce payments to the council’s pension fund –  which already has a £238 million deficit – using a ‘Special Purpose Vehicle’. We understand that the council is using some of their buildings as security on a risky investment. How do we know it’s risky? Because their financial advisors are warning them against it.

It seems common sense to me that if the proposal were common sense, then the Cabinet would not resort to bending the rules to avoid scrutiny.

What I am seeing in action here is the Labour belief that Leader Knows Best, and democracy is merely a frustrating blot on the master plan. The belief that the people ought to shut up and take their medicine. The belief that is shown up at its worst in the Executive Mayoral system.

This is further confirmed when a member of the public stands up and questions whether the chair should be asking loaded questions of his own committee. The offender, Anthony McAlmont, says that members of the public are not allowed to speak, despite having allowed an earlier question. For some reason this breach of meeting protocol goes unnoticed by the Legal advisor present.

I hear the words ‘p&%$-up’ and ‘brewery’ emanate loudly from elsewhere in the public gallery.

With dogged persistence, the female councillors draft a resolution that no more money should be spent until the investment and accounts committee has had a chance to review the proposal in more detail. In the end, the meeting vote is 5-1 for this motion.

Hudson warns this is a waste of time. What does he know that we don’t?

During this fiasco, I am reminded of the botched Labour leadership elections. You can vote for anything, as long as it’s the right choice.

As if to reinforce this, the Mayor rejects the motion day after.

It would be easy to despair right now. But I’m seeing a new movement emerging amongst the people of Newham. I see it in the snowballing, hopeful tweets about Jeremy Corbyn. I see it in the growing bravery of left-wing councillors against their bullying leaders. I see it in the swelling numbers of Newham Green Party.

And it’s almost reassuring to observe some councillors in utter denial of this growing trend. It means we will win, and soon.

If you’re interested in helping the Green Party challenge Labour’s one party state in Newham, do sign up here. (NB: We have a No Purge Promise™)

Rachel Collinson is acting membership secretary for Newham Green Party, and a former General Election candidate. 

More pensions malarkey

18 Aug

Bankers can’t believe their luck as Newham buys into another crazy scheme

Newham Council’s Overview & Scrutiny Committee will meet next Monday (24 August) to discuss the council’s pension arrangements. Not the new scheme for councillor pensions this time, but the fund that pays for ordinary staff pensions.

Despite the current state of the council’s finances and the need to make significant cuts the Mayor has decided to spend up to £500,000 developing an asset-backed ‘special purpose vehicle’ (SPV) to finance its defined benefit staff pension scheme.  The idea is to give the scheme security over some of the council’s property portfolio, thereby allowing it to reduce its cash contributions.

At its last valuation in 2013 Newham’s pension fund was found to have a £298m deficit.

The decision to spend money developing the new asset-backed SPV was made without the agreement of the Investment & Accounts Committee, whose principal purpose is to oversee the council’s pension funds.

Cllr John Gray, who sits on the IAC, has raised concerns about this proposal and one pensions expert described it as “bloody dangerous”:

Have they learnt nothing from the City as to how not to do it? SPV-financing mechanisms were a significant part of what caused the financial crisis. 

[This] feels like they have been sold a pup by some City whizz. And where does this kind of financing arrangement (off balance sheet most likely) end?

Another expert, Judith Donnelly, told Professional Pensions magazine the half-million pound price “sounds excessive” and that

she would not normally expect it to cost that much to put an asset-backed structure in place

The government announced in its summer budget that if local authority pension funds do not pool their funds they will be effectively forced to do so. So any money Newham spends now investigating changes to its pension scheme could be wasted.

After the dreadful publicity surrounding the £560 million of hugely expensive LOBO loans the council has taken out and the stench emanating from West Ham United’s Olympic stadium deal, not to mention the naked self-interest of the new executive pension scheme, some backbench councillors are finally taking a proper interest in what’s going on. As Cllr Gray put it when speaking to Professional Pensions:

We should be extra careful not in invest in such complex products without the highest level of scrutiny.

That is why Overview and Scrutiny have ‘called in’ the decision. The request to do so was made by Little Ilford councillor Farah Nazeer, who also sits on the Investment and Accounts committee:

I am writing to request that you support my application to “call in” the decision by the Executive at the Cabinet Meeting on Thursday 23rd July 2015 (item 5) to spend up to £500,000 of public money on setting up an “Alternative Asset backed Financing for the Newham Pension Fund”.

I believe that this is the wrong sequencing for this decision because the proposal has not been consulted upon and agreed beforehand with the Newham Council Investment & Accounts Committee.

As a member of this committee I am concerned that this proposal may not be in the best interests of the Council nor the staff Pension fund and we might waste this £500,000 if the Committee decide that this proposal is not appropriate. I understand that the alternative asset proposal has significant risks attached to it which I feel merit proper scrutiny. 

It is inappropriate in principal for any such proposal to go ahead without the agreement of the Investment and Accounts committee beforehand.

I request that the Overview & Scrutiny committee should examine the arguments and consider making a recommendation back to the Executive that no further expenditure of public funds is made until the Investment and Accounts committee have had a chance to fully consider the proposal and are made aware of all  the possible costs and benefits of the scheme.

All Overview and Scrutiny meetings are open to the public. Next Monday’s is at 6:30 at East Ham Town Hall.

The geezer is underpaid

23 Jul

Sir robin wales labour hand up for more money

Hands up if you think you’re underpaid on £81,000 a year (photo: WorldSkills)

by Iain Aitch

‘The geezer is underpaid’ is not a phrase you expect to hear from the Deputy Mayor of a Labour council when talking about his boss. You expect it even less when his boss, Newham Mayor Sir Robin Wales, draws allowances of £81,029 per-annum and is asking Council Tax-payers where £50m of cuts should be made. 

Yet these are the words that came from the mouth of Councillor Lester Hudson at Wednesday evening’s Overview and Scrutiny Committee (OSC) at East Ham Town Hall. Hudson said he was speaking on behalf of the Mayor as he attempted to justify how and why Wales should get a £10,858 pay rise, in the shape of a pension paid for solely by Newham residents. 

Once tax breaks were taken into account this would leave the Mayor with a council tax-funded income of £96,231. This is more than four-times the mean Newham salary that other councillors reported to the meeting. Hudson was adamant that Wales, full-timers and those who receive Special Responsibility Allowances (SRA) should receive a hefty 13.4% pension contribution from residents. The contribution from Wales and councillors? Zero. 

The meeting was discussing these pensions because the issue had been called in to the OSC by councillors concerned at just how this £600,000 spend over three years would make them look. Councillors Dianne Walls, Seyi Akiwowo and Kay Scoresby asked how this would appear to residents on the doorstep come election time, but Councillors Hudson, McAlmont, Vaughan and Noor argued that MPs get a generous pension, so why shouldn’t they? Vaughan asserted that they were as good as MPs; ironically, Noor decided they were better, even though it appeared that he did not know quite how pensions worked. 

Several members struggled with the concept that they were paid allowances for duties rather than actually being employees of Newham Council. Some had to be reminded more than once. They still remained puzzled. Hudson didn’t help by constantly referring to being an employee, even when he was regaling the meeting with tales of his Cambridge degree, his past as an accountant and how he could earn more elsewhere were it not for his selfless dedication to public service.

If there was a The Thick of It moment during the OSC it was when the big white book of meeting rules was pulled out and dusted off. Newham’s council meetings and committees are not places where dissent is a common occurrence and suddenly there was some. Computer says no. 

The chair, Councillor Anthony McAlmont, didn’t know quite what to do. The rule book was consulted. But it was clear there was more than a simple problem of pensions or procedure at play. The room was divided along gender lines, with Councillors Rokhsana Fiaz and Susan Masters joining the dissent. Female councillors spoke about the impact of austerity, the impact on residents and the probable illegality of the scheme being proposed. Male councillors spoke about how selfless they were and how much they were worth to the public. 

In tense exchanges, issues of childcare, meeting times and parental leave were raised by the women. Councillor Hudson expressed an opinion that those issues had already been discussed at Labour Group. Councillor Akiwowo face-palmed at this point. Fiaz rolled her eyes. Walls pointed out that no such discussion had occurred. Akiwowo came out fighting and impressed mightily. She had already rubbished the idea that huge pensions would attract a younger, more diverse set of councillors. “I’m not 55 and I am pretty diverse,” she said. But the point was lost on the old guard in the chamber. Hudson, unable to vote, left the room stating that he hoped ‘common sense would prevail’ to yet more eye-rolling, astonishment and opprobrium. 

At the meeting’s conclusion, all five women voted to recommend that the Mayor reconsider the pension scheme. All three men voted to say all was fine and dandy and when do the payments start?

The final decision as to whether to spend the £600,000 on pensions now rests with the Mayor. At a time when community centres are being closed, childcare facilities cut and repairs put off it would surely be embarrassing, even for this Mayor, to rub Newham residents’ faces in it, wouldn’t it? Let us see. 

Whatever the decision, it does now seem that the split within Newham Labour’s ranks is becoming visible. It was seemingly bubbling under even before the ink was dry on the ballot papers at the last council election, but now it is out in the open. We may finally have an opposition sitting in the council chamber, only not where anyone would have expected to find them, least of all Sir Robin. 

Iain Aitch is an author and journalist who lives in Newham. He has written for the Guardian, Daily Telegraph, Sunday Times and Financial Times.

 

More scrutiny

25 Mar

I was live tweeting from the oversight and scrutiny commission meeting on the East Ham Town Hall campus and Newham 6th Form Collegiate last night.

You can read the stream, plus some additional commentary, on Storify.

Overview and Scrutiny

25 Feb

I’ve Storified the live Twitter commentary from last night’s OSC meeting, with some added notes.

The committee’s witness was the Mayor of Newham, Sir Robin Wales.