Ross Knowles - picture credit Mike GunnillOver the last year or so, Mrs Angry has observed one rather interesting and recurrent trend in the type of visitors to this blog: hits from local authorities all over the country keen to read posts referring to the case of a Mr Ross Knowles, former head of procurement at Laser, 'Local Authority, South East Region' - the energy buying consortium created by Kent County Council.
Ross Knowles, a 42 year old Cambridge graduate earning £66,000 a year, was charged last May with offences involving the embezzlement of money from Laser suppliers British Gas and NPower.
On the 30th March, Knowles was convicted of one charge of fraud involving British Gas and cleared of the second involving NPower, following the direction of the judge. He was warned that he faces a prison term when he returns to court for sentencing on April 27th.
Laser is an energy procurement consortium set up by Kent County Council and is run as a business venture, supplying energy to 106 other authorities and public bodies in London and the South East, supposedly bringing savings to all members, and a dividend to Kent County Council. It employs around sixty members of staff. The London borough of Barnet was one of the consortium's customers.
Ross Knowles abused his position as head of procurement at Laser in what was described as a sophisticated technique, but was so easy to pursue. Over a fourteen month period, in fact, he was able to divert a charge of 0.04 pence per unit sold to clients, as an unauthorised management fee, into a private account. Knowles spent £400,000 of a total £2 million obtained this way on holidays, a Jaguar car and gifts for his family.
After the trial, Andrew Penhale, CPS Central Fraud Group said:
“As the Head of Energy Procurement for Kent County Council, Ross Knowles was a trusted and very senior public official. In that role, he headed up a consortium that brought together local authorities from up and down the country, ostensibly to improve their buying power to source energy at competitive rates for schools, council buildings and street lighting.
“But far from ensuring best value for the public, Knowles used a sophisticated but simple technique to defraud them. At the year-end reconciliation, instead of claiming a rebate which would have benefited all the public services that were part of the consortium, he forged invoices and diverted the monies to his own bank account. Knowles benefited from the arrangement to the tune of £2m, an amount thirty-two times in excess of salary."
What implications does this case have for us here in Broken Barnet?
Plenty, as it happens.
Until recently, Kent was one of the 'easycouncil' style authorities, run by Katherine Kerswell, former President of SOLACE, the Society of Local Authority Chief Executives, an organisation so deeply involved in spreading the sort of One Barnet, easycouncil, privatisation friendly disease which has infected many local authorities throughout the country.
We have the 'One Barnet' programme - they had the rather amusingly named 'Bold Steps for Kent' ... sadly, at the end of last year, Katherine Kerswell decided to take the bold step of stepping down from her post, although the blow was softened by an alleged payout of more than £400,000. Kent has taken the decision not to replace her, and to struggle on without a 'managing director', in order to make savings. Oh dear, Mr Walkley - let us hope this does not set un unfortunate precedent ...
Here in Barnet, of course, our flirtation with commerical enterprise, at least on such a large scale, has only just begun. And look at the signs and portents for what is to come.
If we cannot properly organise the regulation of commercial engagements with the many hundreds of companies with whom Barnet Council is already involved, how on earth can we trust them to manage a billion pound package of outsourcing?
A year after MetPro, no real lessons have been learnt in this borough in regard to the proper management of procurement. As this blog has demonstrated over the last few weeks, there are still an astonishing number of non compliant contracts with private companies providing services to our authority.
Has any fraudulent activity taken place in the many irregular, or even the ostensibly regular arrangements which Barnet has had in place over the last few years? Apart from via Laser, that is. Mrs Angry suspects that the answer to this is - yes.
No fraud investigation was instigated, despite requests, over MetPro. It would probably have been in the public interest if such an investigation had taken place, but it did not.
How many other cases there may be is unknown. The Knowles case shows just how easy it is, in the absence of really effective procedures, to defraud tax payers.
Do you trust Barnet Council to ensure that your tax is being defended, has been defended, from the exploitation of personal gain? How easy would it be for a senior employee, or an dishonest contractor, to abuse the procurement process here in Broken Barnet?
No wonder Tory leader Richard Cornelius is so opposed to the restrictions of procurement regulation, and the intrusive enquiries of Freedom of Information requests by the bloggers of Broken Barnet. He is an honest man, and has probably no real understanding of the depth of incompetence within the procurement process in this borough. In his view, EU procurement laws are that dreadful thing, in the eyes of Tory businessmen - unnecessary interference by the bureaucrats -here in Barnet we have reason to know that such interference is necessary and protects us from fraud and corruption. MetPro was just the tip of the iceberg, and there are still many other bodies buried beneath the floorboards. The political cost of further revelations, however, is too high.
The truth is that there are years of unregulated commercial activity within the borough and we simply do not know how many of these arrangements began or were allowed to continue. This is, of course, dwarfed in scale in comparison to what could happen in the future with new commercial partners and an empire of subcontractors. The current administration would prefer that we did not ask any more embarrassing questions. We must, and we will, and the Ross Knowles case is just one reason why we must continue to do so.
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