Council CEO’s private company and mystery of £50,000 deal

Nathan Elvery, the interim chief executive at Croydon Council, has told Inside Croydon that there were no conflicts of interest when he set up his own private company for a business providing technical assessments for senior financial appointments across London local authorities, all at a time when he was employed full-time by our council.

Croydon's interim CEO Nathan Elvery: he set up a private consultancy company while employed by the council

Croydon’s interim CEO Nathan Elvery: he set up a private consultancy company while employed by the council

Elvery established Sundragon Associates Ltd in August 2009 together with Tracie Evans, who was then the director of finance at Barking and Dagenham. There were no other directors in the business.

When Inside Croydon sought answers from the council about whether Elvery had ever sought permission to pursue a private business while working as a full-time employee of Croydon, the borough’s most senior employee threatened legal action to gag us.

Through Companies House searches and Freedom of Information requests, Inside Croydon has learned that while both Evans and Elvery were in full-time employment as senior local authority public servants, they created Sundragon as a private limited company with share capital, with initial “investment” of £500 each in shares.

The company was registered at an address in Ashcroft Drive, Uxbridge, with Elvery describing his occupation on the official forms as “deputy chief executive”. According to Sundragon’s accounts filed at Companies’ House, the principal activity of the company “was that of providing consultancy services”.

In the accounting year ending August 31, 2010, the company’s first full year of operation, Sundragon declared a turnover of nearly £50,000. There was no money paid in directors’ salaries, though the company incurred nearly £7,000 in running costs. These included premises (£886) and professional costs (£340), plus two payments of very similar amounts, one for £2,773 for “motor costs” and one for £2,743 for “administration costs”.

According to the accounts signed off by Elvery, from its £49,200 turnover, Sundragon registered a profit of £33,762 after tax. That year, dividends payable – which might usually be expected to go to a company’s shareholders – were recorded as £19,302.

By August 2011, the Sundragon accounts show a company that appears to have stopped trading, with no turnover, no running costs, and with the two directors having been refunded their share capital. Dividends payable – from the surplus of the previous year, after deductions for tax – were £12,368.

The accounts state that the company’s income represents “consultancy sales”. However, they offer no further details of who the clients for those consultancy services may have been. So there is no way of confirming Elvery’s statement that there was no conflict of interest between his vitally important financial role within Croydon Council and the “sales” carried out by his private company with an unnamed third party.

Sundragon Associates Ltd was dissolved in April 2012.

Elvery has told Inside Croydon that, “I did not provide any services to the company and I did not receive any financial benefits from the company.” Bit of a mystery, then, as to why a senior public administrator went to all the bother of setting up Sundragon Associates in the first place.

According to Companies’ House official records, Sundragon had no employees. The two years’ worth of dividends amounting to nearly £32,000 must have been paid out to some one, although it remains a mystery as to whom. Elvery says it isn’t him.

Elvery told Inside Croydon, “As a consequence of being approached to provide professional services in respect of technical assessments for senior financial appointments across London a company was established to provide such services.

“In the event, the business did not mature, I did not provide any services to the company and I did not receive any financial benefits from the company. The company was dissolved some time ago. There were no conflicts of interest. I have fully complied with the council’s requirements in this regard and have nothing further to add.”

It is interesting that Elvery admits that, despite being a full-time employee of Croydon Council, when he was approached to do a spot of moonlighting – albeit potentially lucrative, white-collar, consultancy moonlighting – he went ahead and accepted the offer with alacrity.

Tracie Evans: another council employee and the "business partner" of Nathan Elvery, for a business that Elvery says did not make him any money. The speech bubble accidentally emerging from Evans' head is not thought to relate to Sundragon Associates

Tracie Evans: another local council employee and the “business partner” of Nathan Elvery, for a business that Elvery says did not make him any money. The speech bubble accidentally emerging from Evans’ head is not thought to relate to Sundragon Associates

It is also worth noting the comment that, “I have fully complied with the council’s requirements in this regard.” We will come to this later.

Elvery first joined Croydon Council in 2004, aged 35, as the borough’s director of finance. In the nine years since, with his salary rising to around £190,000 per year, he is understood to have remained as an employee, and therefore subject to the council’s code of conduct, which usually demands that any outside commercial affairs need to be declared, to protect public interests.

In 2008, Elvery was promoted to deputy chief executive under Jon Rouse. In March this year, upon Rouse’s somewhat hurried departure, Elvery was appointed as Croydon’s interim CEO by the council leader, florid-faced Mike Fisher.

Evans left her job at Barking and Dagenham council some time ago. An FoI request to Barking about Evans’s role with Sundragon elicited a prompt answer, stating they held “… no record of a declaration of interests in respect of Tracie Evans”.

In Barking, they say that their “…council’s code of conduct is clear that all staff, temporary or permanent, who choose to pursue external business activities are to seek consent first. This is a fixed obligation and the responsibility to comply lies with all staff irrespective of whether they have signed any documentation or not…

“It is a continuous obligation and to fail to declare the commencement or continuation of external business activities would be considered to require disciplinary action.”

But Barking evaded more pointed questions about whether Evans had ever been subject to disciplinary action because of the absence of the declaration of interests over Sundragon.

A similar set of FoI questions were put to Croydon Council – motto “Proud to Serve” – which, as usual, opted to drag its feet for the maximum period permitted. More like “Proud to Swerve”.

Croydon eventually offered the following response, which has all the hallmarks of evasiveness crafted in a not-very-good lawyer’s office:

“No formal agreement needed to be established between the council and Mr Elvery as Mr Elvery was not employed by and did not receive any financial gain from the company.

“Mr Elvery’s time was fully committed to the council during the period in question. This was fully compliant with the terms and conditions of Mr Elvery’s employment with the council.”

Jon Rouse: Nathan Elvery's former boss at Croydon Council. What did he know about his deputy's involvement with Sundragon Associates?

Jon Rouse: Nathan Elvery’s former boss at Croydon Council. What did he know about his deputy’s involvement with Sundragon Associates?

“Formal agreement”? How about Elvery ever seeking permission to embark on this private, commercial venture at a time when he was supposedly a full-time employee with a demanding job that sees him very well rewarded?

What about a declaration of interests?

And let’s imagine that Elvery had properly sought advice from his boss and employers to clear his involvement in Sundragon: how, at the time when the company was being registered – presumably with the usual intention of such companies, to make money – could Croydon Council have known that Elvery would not “receive any financial gain from the company”?

Croydon Council refused to answer questions about how Elvery’s conduct over Sundragon was monitored, even though Sundragon’s accounts show more than £5,000 in expenses being drawn down in a single year, suggesting that someone in this company with no employees was spending considerable time, and driving some considerable distances, to incur such expenses.

Requests for copies of any document in which Elvery ever advised Croydon Council of his intention to establish a private company were met with a statement that “there is no formal agreement of the nature you describe between the council and Mr Elvery save his employment contract with the council”.

A request for sight of those clauses in Elvery’s employment contract which show that he had no need to declare any outside commercial interests were denied on the grounds that it is “personal data”.

Nathan Elvery: might his two-fingered salute suggesting that he believes he can run a council and a private business at the same time?

Nathan Elvery: might his two-fingered salute suggest that he believes he can run a council and a private business at the same time?

When he was pressed on this matter by Inside Croydon, Elvery steadfastly maintained that as well as not receiving any financial benefits, he never did any work for Sundragon Associates (even though the company accounts carry his signature, indicating at least a modest administrative oversight function).

As the man who once declared of Croydon Council that “efficiency is in our DNA”, maybe Elvery actually believes that his setting up a private company that requires him to do no work and makes him no money is an “efficient” business.

The Freedom of Information requests about Elvery, Evans and Sundragon Associates have been pursued over nine months by Stephen Whiteside, the former council employee who in 2010 won a High Court case against Croydon in which the judge ruled that bad management, bullying and excessive workloads had caused the planning official to suffer a stress-related mental breakdown.

Whiteside believes that the Sundragon affair raises a number of worrying issues about the way Elvery has been allowed to conduct himself while holding one of the most senior positions at the council. “Dependent upon the services provided by this company, there was obviously a ‘conflict of interest’ risk connected to Elvery’s work as private company director and that for which he was contracted to the council,” Whiteside said.

“Clearly, there could also be an issue with the amount of time Elvery would have needed to spend on matters relating to the private business that might impact on his work for the council. After all, Elvery held a senior position of trust with the council, with critically important responsibilities.”

Whiteside remains unconvinced by Elvery and the council’s claims that there was no financial gain from the council official’s involvement with the private company. “On the face of it, Elvery stood to receive 50 per cent of the dividends payable, amounting to £15,835 over the two years, which to me and many others would be a significant ‘financial gain’,” Whiteside said.

“I know of cases where a local authority officer of a much lower status than Elvery has had to sign up to a binding agreement when running a business simultaneously to being paid from the public purse. Such agreements are used to prevent any conflict of interest and enable the local authority to hold the officer to account for any alleged breach of its terms.

“If nothing else, the council needs to show that there is not one set of rules for the ‘bosses’ and another for the ‘workers’… as well as that power is not being abused in any way,” Whiteside said.

  • Previous Inside Croydon coverage of Nathan Elvery:

Coming to Croydon


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About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
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