Did CEO Elvery break council code over his private company?

Did Nathan Elvery, Croydon’s chief executive, break his £150,000 a year employment contract in 2009 when he set up a private business, Sundragon Associates Ltd, while he was a full-time council employee?

Nathan Elvery: did he act outside the terms of the council staff's code of conduct?

Nathan Elvery: did he act outside terms of the council staff’s code of conduct?

Official documents provided by Croydon Council through a near-year-long Freedom of Information process, and seen by Inside Croydon, strongly suggest that there is a case to answer.

Elvery denies any wrong-doing, and maintains that he has always conducted himself according to the council’s requirements.

Croydon spent seven months of evasiveness and obfuscation over two straightforward questions: Did Nathan Elvery’s contract of employment allow him to run a private business while working as a senior executive at the council? And who, if anyone, did Elvery tell that he was setting up Sundragon Associates, and when?

The latter question is key, since it is a routine condition of most public servants’ employment – especially those responsible for millions of pounds of public finance – that they need to advise their management of any intention to establish a private business, regardless of whether they manage to make that business successful and make them any money. Moonlighting is moonlighting, after all.

It took an internal review by a corporate solicitor before Croydon finally addressed Freedom of Information requests that had first been put to them in March.

Nathan Elvery's 2008 letter of appointment as Croydon Council's deputy CEO, with the clear requirement "to comply with the Council's Code of Conduct"

Nathan Elvery’s 2008 letter of appointment as Croydon Council’s deputy CEO, with the clear requirement “to comply with the Council’s Code of Conduct”

The council response stated: “The personal data of Mr Elvery which you have requested relates to how Mr Elvery carries out his role as a senior employee of the Council and the protection required for disclosure of such information is reduced.

“I have noted your submissions in your request for an internal review about the expectations on senior employees regarding the need for accountability and transparency and the need to provide public assurance that the Council does have measures in place to prevent officers in such senior positions of (especially financial) responsibility establishing a private business without permission and when allowed, to monitor progress and avoid any conflict of interest, and show the public that the Council does not have one rule for the ‘bosses’ and one for the ‘workers’.”

The council provided a heavily redacted extract from the 2008 letter of appointment, when Elvery was promoted to become Jon Rouse’s deputy chief executive.

The letter is unambiguous: “You will be required to comply with the Council’s Code of Conduct”.

The council also provided a copy of the staff code of conduct. It is difficult to understand how, under such terms, it was ever possible for Elvery to be involved in any private business venture without being in breach of his employers’ code of conduct and thereby his contract.

This is the relevant clause from the code of conduct:

2.10 Full-time Service
Your off duty hours are your personal concern but you should not subordinate your duty to your private interests or put yourself in a position where duty and private interests conflict. It is not the intention of the Council to preclude you unreasonably from undertaking additional employment unless that employment conflicts with or detrimentally affects the Council’s interests, in any way weakens public confidence in the conduct of the Council’s business, or in any other way affects your liability to undertake your work. However, staff above Scale 6 (or equivalent) are expected to devote the whole of their service to the work of the Council and shall not engage in any other business or take up any other additional appointment for financial gain without the agreement in advance in writing of their Chief Officer that it does not conflict with their work. Chief Officers must obtain the Chief Executive’s permission and are requested to pay any fees received into the General Fund.

In particular you should not undertake outside work related to any matter which is or could be dealt with by the Council. For example you should not produce plans for building work which could be the subject of a planning or other application to the Council. It is irrelevant whether or not the work is paid.

Elvery’s Sundragon Associates was established, according to documents signed by Elvery  and lodged with Companies House, to conduct the business of “providing consultancy services”.

Sundragon Associates Ltd was formed in 2009 by Elvery together with one co-director, Tracie Evans, who was then finance director at Barking and Dagenham Council. After turning over £50,000 in its first full year of operation, Sundragon was quietly wound-up in April 2012, the business having failed to “mature”.

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.”

Elvery has never said who it was that approached him and Evans to provide such services, nor how they received nearly £50,000-worth of business in their first full-year of operation.

Elvery maintains that he “fully complied with the council’s requirements”.

Throughout the period that Sundragon Associates existed, Elvery and Evans also worked together on Programme Athena, a London-wide scheme aimed at providing economies of scale for boroughs’ IT procurement.

For her part, Evans left Barking and Dagenham in 2012 and took up one of the most senior jobs in the Metropolitan Police, as the director of resources, working closely with the Commissioner, Sir Bernard Hogan-Howe, and responsible for millions of pounds worth of crime-fighting IT systems. Yet in May this year, Evans left this important job at Scotland Yard after just a few months in post.

Elvery has managed to rise to the top job in Croydon, overseeing the borough’s annual turnover of £500 million, despite being likened by council insiders to having the management style of David Brent and a liking for “management by Powerpoint”. His career has frequently attracted controversy.

Taxi for Mr Elvery! Just make sure it is licensed and insured

Taxi for Mr Elvery! Just make sure it is licensed and insured

In evidence at a 2009 Employment Tribunal, Elvery was accused of “manipulating” the accounts between council departments, in order to make his own area of responsibilty appear more successful. The council denied this allegation.

But the case for wrongful dismissal, brought by a senior council officer, Alan Langridge, was ultimately successful, with Langridge being awarded tens of thousands of pounds in compensation for the way he had been forced out of his job.

The tribunal considered the treatment of Langridge was “unfair” and that there had been a “serious breach of contract” which had led to his forced resignation.

In his testimony, Langridge accused the then CEO, Jon Rouse, of being “hostile and confrontational”, and spoke of how when he had issued a briefing note about the financial position to elected councillors, he was called in to meeting with Elvery, in which the angry finance director shouted at him and warned that Langridge could not be given “protection” as part of what Elvery called his “finance family”.

More recently, Elvery has been a favourite subject of Private Eye over the mishandling of multi-million pound council contracts for transporting disabled children to school.

In September 2009, Merton-based Olympic South was awarded a £6.5 million contract, despite there being cheaper bids from better-qualified firms based in Croydon.

The decision to award the contract to Olympic South appeared to be based on advice from Michael Lawrence, a transport consultant appointed by Elvery. Soon after Olympic South won its Croydon tender, Lawrence went to work for the cab firm, according to the Eye on a £100,000 salary plus company Merc.

After reading the magazine’s reports, Croydon councillors ordered an inquiry. An internal investigation said it found no evidence of fraud, although Rouse was forced to admit that the inquiry “raised concerns with the evaluation process”.

Top job: Elvery pictured after his most recent promotion was announced

Top job: Elvery pictured after his most recent promotion was announced

Soon after, all Croydon’s transport contracts were put out to tender again. This time, Elvery, in overall charge of procurement, managed to oversee the awarding of a £3.7 million public contract to a taxi firm that did not have the requisite insurance or licences to provide the service.

None of this will inspire confidence in Elvery, who took over from Jon Rouse earlier this year with the blessing of florid-faced Mike Fisher, the leader of the Conservative group which controls the council. As interim chief executive, it will be Elvery who will be responsible for overseeing the local elections next May.

“We must remember that we are not talking about just any member of staff here,” said Stephen Whiteside, a former council employee whose FoI requests led to Croydon’s disclosures.

“At the time Sundragon was ‘active’, Elvery and Evans were not only directors of finance in two big London councils, but also joint project sponsors for a major partnership across many London local authorities called Programme Athena – worth billions of pounds of public funds.

“In March 2012, just a month before Sundragon was finally dissolved, both Elvery and Evans were admitted to the Freedom of the City of London. With the departure of Jon Rouse a year later, Elvery was elevated to the position of chief executive with even more important and wide-ranging responsibilities including that of Returning Officer for the borough elections in 2014.

“As the custodian of the council governance and a good deal else, he must be beyond reproach. Elvery’s private business venture threatens to undermine public trust in senior managers and those who monitor their conduct,” said Whiteside.

  • Previous Inside Croydon coverage of Nathan Elvery:

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6 Responses to Did CEO Elvery break council code over his private company?

  1. davidcallam says:

    It stinks.

    Elvery should seriously consider his position and if he won’t then a strong articulate leader of the council should make him – but we don’t have one of those.

    I spent 20 years in local government working in five departments across three London boroughs. I can remember a number of inadequate senior officers, mostly people promoted beyond their abilities who couldn’t make a clear decision about anything. But I never remember anything like this and I don’t think it would have been tolerated.

  2. We have got to move from being a Borough where there is the constant question:
    “who is benefiting from this deal?”

    To a borough where all transactions are clearly:
    * of benefit to the community;
    * offer value for money;
    * are subject to appropriate checks and balances.

    Croydon would benefit from some basic rules being in place so that there is no doubt in anyone’s mind that public servants, Councillors, Trustees and so on are subject to appropriate scrutiny; and if those rules are breached the people involved go. Grubby compromises do not serve Croydon’s best interests, we would not have got into this position if everyone understood from the start that the highest standards are required from them.

    • I think Charlotte is a little unfair. I have always worked to the highest standards possible. I have never been offered a bribe and always speak my mind. Politics should be about a plurality of views, however uncomfortable that is for those who don’t like to think.

      The rules already are in place…

      Having said that I think it is important to shine the light of openness and transparency on Croydon. Too often the council hides behind ‘commercial confidentiality’, when 99% of what is being discussed should be in the public arena, as it is at other Councils.

      Over the last ten years as a Councillor, I have seen the quality of officer reports get worse and worse. Just look at the Council Budget book. You used to be able to see how much your local library spent each year and how much the local care home cost. Look now, and it is meaningless.

      Such basic information would help the public and staff understand how the Council operates and enable better budget decision making.

  3. In that case, let us enforce the rules properly. Then we can employ people who can cope with the demands of the job. Why are the Labour councillors not vigorously exposing the situation to public auditors?

    • As an opposition councillor i am faced with an administration (the officers) who work entirely for the Leader of the Council. In effect we have a Mayor, elected by the 70 Councillors. That Leader does not believe in democracy – as demonstrated by ending the practice of having a public cabinet meeting which included the opposition front bench. That Leader does not believe in openness – as demonstrated by the awarding of contracts for libraries or IT costing a few million to almost 100 millions. That Leader who doesn’t believe in offering a full range of public services – as demonstrated by using an ultra simplistic ‘budget consultation’ to justify cutting all of Arts & Culture and selling the Riesco Collection.

      So when faced with a Council run like that, officers follow the letter of the constitution or in the case of Riesco, break the constitution in collusion with the Leader. As under the constitution the Riesco Sale should have been considered a Key decision and therefore subject to the Scrutiny of all 70 councillors.

      Nationally this government has privatised the Audit Commission.

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