LibDem official causes scandal over undeclared donations

Our Sutton reporter, BELLE MONT, finds that the former chair of Sutton’s ruling party, John Drage, forgot to declare an interest during a multi-million-pound public tendering process. And not for the first time

The Liberal Democrats on Sutton Council accepted political donations from a contractor who was working for the borough’s social housing managers during a procurement process – and while the chair of the LibDems’ local party was on the decision-making board of the housing body.

Sutton Housing Partnership (slogan: “Improving housing together”) is the council’s social housing organisation, and what is supposed to be an ALMO, or arm’s length management organisation.

This week, Steve Tucker, SHP’s interim CEO, found himself with huge problems on his hands as the £8.9million cladding on the recently refurbished Chaucer House failed a fire safety test. Tests on the cladding of its sister tower, Balaam House, are in progress.

And now it has emerged that an SHP contractor made generous donations to the political party of a one-time SHP board member – John Drage, the former chair of Sutton Liberal Democrats.

Forgetful, again: John Drage

Drage will be familiar to Inside Croydon’s loyal reader as the council official from Sutton who sat on the South London Waste Partnership committee that appointed Viridor to build and operate the incinerator on Beddington Lane in a 25-year £1billion-plus contract.

Drage was also on the Sutton council executive that rubber-stamped the Viridor  decision in November 2011.

Drage never mentioned to the SLWP nor declared an interest at Sutton Council that he is a life-long friend with Viridor’s then CEO, Colin Drummond. Drage’s wife, Elaine, is godmother to one of Drummond’s sons.

Drage has long been a key supporter of local LibDem MP Tom Brake. Drage did not stand for re-election as a Sutton councillor in May 2014. Instead, he became chairman of the Sutton LibDem party, and the LibDems’ appointee as a director on the board of the Sutton Housing Partnership.

It was while Drage was on the SHP board that a series of questionable events occurred around a juicy £11million contract.

Smith & Byford Ltd, based in Cheam, first began working for Sutton Council on social housing gas installation and maintenance contracts in 2002. When SHP was formed in 2006, this work continued. The company was recontracted twice.

In May 2014, SHP began a new procurement exercise for the gas servicing, maintenance and installation contract on its social housing estate. The contract was for 10 years, and worth more than £1million per year. Smith & Byford won the procurement exercise and began the contract in July last year.

John Drage was appointed as a director on the board of SHP on September 10, 2014. At this time the gas installation and maintenance contract bidding process, initially involving 27 companies including Smith & Byford, was already under way.

On November 1, 2014, Smith & Byford Ltd donated £5,000 to Sutton Liberal Democrats (chairman: John Drage).

On April 28, 2015, Smith & Byford Ltd donated a further £2,500 to Sutton Liberal Democrats (chairman: John Drage).

At a board meeting of the SHP on March 9, 2016, Smith & Byford was approved as the recommended bidder for the service.

The contract was officially awarded on May 4, 2016.

On June 8, 2016, John Drage resigned as a director of SHP. He and Elaine Drage relocated from south London to the West Country, although Elaine Drage remains a director of the Sutton Carers Centre charity.

There is no suggestion that Smith & Byford’s donations were intended to influence the decision-making of SHP. The 2015 General Election was in the offing, and the then MP for Sutton and Cheam, Paul Burstow, was a regular visitor to Smith & Byford’s premises in his constituency.

The problem is that John Drage never made any declaration about the donations received by his political party at any board meeting of SHP, even when the board was voting to accept Smith & Byford as the recommended contractor. A bit like how Drage “forgot” to mention his lifelong friendship with Viridor’s Drummond when he a member of organisations awarding multi-million-pound public-funded contracts to Viridor.

In fact, an SHP official’s report from March 9, 2016, recommending Smith & Byford as the contractor, said that due diligence had been undertaken and nothing had been found to indicate a reason for not appointing Smith & Byford.

That due diligence clearly did not include looking at its political donations, which are a matter of public record.

The official record of Smith & Byford’s first donation to the local LibDems

The SHP constitution is clear regarding declarations of interests. It states: “Members should consider the following interests and whether they have any they should declare.

“Personal Interests: Where it can reasonably be thought that a matter will affect the well-being of yourself, a friend or a relative or an organisation/body with which you are involved, to a greater extent than other people. In this case you should declare the interest and state the nature of it.

“Personal and Prejudicial Interests: Where a personal interest is thought to be so significant that a member of the public, with knowledge of the facts, would consider it likely to prejudice the member’s judgement of the public interest. In this case you should declare the interest, state the nature of it and leave the meeting room.”

And then a couple of thousand pounds more, at a key time in the contract award

It seems inconceivable that, as the chairman of Sutton LibDems, Drage would not have known about the generous £7,500 in donations from Smith & Byford. It also seems odd that for a man who held a number of high-ranking and influential positions in public life, Drage has repeatedly struggled to remember to mention matters which many might consider very relevant to decisions involving billions of pounds of public cash.

There is no suggestion that Drage alone could have swung the SHP contract the way of Smith & Byford – only a thorough inquiry might establish the facts.

What really matters is public perception. And in the case of SHP, the perception of its residents would be vital to its reputation. The residents had been promised engagement and influence. In the summer of 2016, SHP’s then chief exec, Colin Taylor, said that SHP was able to announce long-term contracts with gas contractor Smith & Byford following a “very successful collaboration involving SHP and residents to choose the new contractor”.

Andrew Taylor: residents would be involved in contract decision

SHP also claimed that, “We’ve had residents involved in this decision making at every stage, from finding out what the priorities are … through to evaluating the bids that have influenced who we appoint to deliver the contracts.”

Emphatically, SHP said, “Residents will be involved in choosing the new contractor.”

But these supposed resident consultations were something of a sham, as Drage himself revealed at a SHP board meeting in March 2016, where he said in relation to a similar procurement exercise that the final decision “rested with the SHP board”, with no outside influence.

Enquiries by Inside Croydon suggest that other SHP board members and management at the time had absolutely no idea about the donations made by its contractor Smith & Byford to Sutton LibDems.

The blame, it seems, lies squarely with Drage for failing to make a declaration.

SHP’s management of public property and finances has already been called into question recently, after it emerged that an administrative cock-up of epic proportions saw the housing managers lose more than £1million of Council Tax-payers’ money in 2013-2014, when it failed to invoice nearly 400 leaseholders correctly for works done. No executives were sacked for this debacle, but the matter was covered up for more than a year by Sutton Council officials and senior LibDem councillors.

Last autumn Taylor left his CEO’s job to set up a management consultancy, while the head of income, Cliff Haynes, took early retirement in February 2016. SHP’s executive director of finance, Brendan Crossan, moved on to sell… er… low-sugar biscuits. No details of any severance deals were made public following the departures of Taylor and Crossan.

Sutton’s Niall Bolger: on holiday

Inside Croydon wanted to ask Niall Bolger, the  chief executive of Sutton Council, what he intended to do about the apparent repeat failings of SHP. But he’s gone off on holiday. For three weeks.

Sutton councillor Tim Crowley, the leader of the Conservative opposition in Sutton, says he has written to Bolger and to SHP demanding “an immediate independent inquiry” into Drage’s failure to declare an interest.

Sutton’s Liberal Democrats, meanwhile, continue to receive donations from various companies that supply services to the local council and other related bodies, donations which are certain to come in for much closer scrutiny now than previously.

Inside Croydon has contacted the SHP, Tom Brake and Sutton LibDems, and William Smith of Smith & Byford with a series of questions to seek explanations for this latest oversight in accountability and transparency by John Drage.

None had responded by the time of publication.

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1 Response to LibDem official causes scandal over undeclared donations


    Some days ago I wrote about the toxic web surrounding procurement processes in general and Grenfell in particular.People may have seen the striking news item from France on SKY,with a terrifyingly quick fire spread:

    Yesterday Newsnight dug up “desktop assessments” and “loopholes” (deliberate?).The article below (I know its slow going) details some of the crucial steps to bad cladding.I stronglt encourage you to read it if you want to cut through the politics.Was Grenfell a tragedy or an atrocity?

    Why do England’s high-rises keep failing fire tests?
    Chris Cook Policy editor, Newsnight

    29 June 2017

    Over the past week, the government has been testing high-rise tower blocks in England owned by councils and housing associations. All 95 of those tested so far have been discovered to be covered with an aluminium “rain-screen” exterior cladding that does not meet the required combustibility standards. You would be right to ask: how on earth can this have happened?

    The short answer is: the organisations responsible for maintaining standards in the building industry have been advising contractors not to take the regulations too literally.

    To understand this, it is worth starting with a document known as Approved Document B. This is the government’s own set of fire safety guidance. It stipulates, at section 12.7, “in a building with a storey 18m or more above ground level any insulation product, filler material…. etc used in the external wall construction should be of limited combustibility”.

    That loose-sounding term – “limited combustibility” – actually has a precise definition, set out later in that document. Broadly, though, all you need to know it basically won’t catch alight. And material meeting this requirement in tests will get a combustibility grade of “A2” or better.

    That is the standard against which the government has been testing cladding. A government spokesperson said “a test failure means that the cladding does not meet the requirements for limited combustibility in current Building Regulations”. That is to say, a failure means a breach of the official rulebook.

    Why, then, have builders installed so much sub-A2 cladding?
    Image copyright Getty Images
    Image caption Residents leave the Chalcots Estate in Camden, after being evacuated
    Undermining the building regulations

    The first thing to know is that local officials no longer run all building inspections. England has a so-called “Approved Inspector” regime. Contractors must no longer wait for a local authority official to check their work. Instead, they may hire people to check their construction processes meet the required standards. There is no single regulator – or arm of government – directly upholding standards.

    Second, the most important requirement in the building regulations is to build a safe building. So long as you do that, the fine print of the rules does not much matter too much. That is why, when inspectors sign off sites, they do not feel the need to work directly from the government’s own guidelines. And the guidelines set out by government are rather old, and cannot specify everything in all circumstances.

    That has left a gap into which esteemed sector bodies have stepped. Their umbrella organisation – the Building Control Alliance (BCA) – has issued advice about how to get a building signed off as compliant without using the type of materials specified in the government guidelines.

    And it is the case that, in the event of some prosecutions or a civil case, breaching the government’s guidance would count as a serious strike against a builder. But it would also be the case that following widely accepted professional practise and BCA guidance may also constitute a defence in a suit for negligence and grounds for mitigation in a criminal prosecution.

    The problem is that this BCA guidance does not just suggest ways of making new technology fit the old rules. It introduces loopholes. The net effect of the sector bodies’ guidance is to set weaker standards than the government’s rulebook.
    Routes to compliance

    For example, the BCA’s guidance in force when the Grenfell renovation took place was issued in July 2014, and it stated that there were several routes to getting a building ready for sign off by an inspector. “Option 1” was just to follow the simple Approved Document B route: just make sure everything you bolt to the outside of the building is of grade A2 or better.

    There were other routes, though, to allow the use of sub-A2 components. Option 2 is to hold a bespoke fire test. So you rig up a wall in a test centre with your proposed cladding design – which might include some sub-A2 components – and try to set it on fire. If it passes the test, you can get certified so that inspectors will sign off this system, even if component parts on their own would not pass.

    This route is actually referred to within the official guidance and has a clear performance standard attached. But there are issues with this. For example, we do not know how many attempts a product might take to pass a fire test.

    Option 3 is where bigger concerns creep in. It allows for so-called “desktop studies”. If I have conducted tests of a cladding product in a few different scenarios, then I might not need to bother with a new fire test. I can convince inspectors to sign it off by hiring an expert who will say “based on these results, I am confident that this cladding is safe in this context” without doing any further trials.

    There are problems with all of this: it has allowed substandard material through. It is a deeply opaque process. We do not know when desktop studies get used. We do not know who writes these desktop studies. They are not lodged anywhere so that people living in these buildings can go and check on them.

    Newsnight reported, however, on a troubling fourth route. The National House Building Council (NHBC) is a big player in building inspection. Last year, they issued guidance which states that you can use a variety of sub-A2 insulation boards with B-grade external cladding – and you can do all of that without even a desktop study.

    That effectively means that a sector body involved in signing off buildings unilaterally decided that largely using B-grade material is now sufficient, not A2. NHBC themselves state that “this is on the basis of NHBC having reviewed a significant quantity of data from a range of tests and desktop assessments.”

    NHBC also added: “we are confident that since the guidance note was issued, the inappropriate use of [plastic-core panels] would have been identified. Indeed we have not encountered or approved any proposals for their use via this route since this guidance was issued in September 2016.”

    But they have conceded there is at least one such polyethylene-core cladding product that meets the B-grade standard demanded in their guidance. And following Newsnight’s reporting on this guidance, the body said that “in light of on-going discussions regarding the use of [plastic-core cladding] products in high-rise buildings, NHBC has withdrawn its guidance”.

    Plastic-core panelling is not the only issue, however, with the now-suspended guidelines.

    NHBC also advised that materials could be used more widely than their own manufacturers did. Take one of the insulation materials that the NHBC mentioned by name: Celotex RS 5000, the insulation used at Grenfell Tower. According to documents issued by the manufacturer, this board was only tested for use with A2-grade external cladding. The NHBC said it could be used with B-grade cladding,

    We also identified one type of insulation that, NHBC said. could be used safely with B-grade cladding, which is actually grade C. All in all, the NHBC guidance was a long way from that official A2 standard.

    As the official cladding tests results keep showing, though, NHBC are hardly alone in having signed off sub-A2 cladding. These widespread test failures are a symptom of broader problems with standards across our building sector.

    There has been a lot of discussion about sprinklers. But the catastrophe at Grenfell Tower has showed up the weakness of the whole framework in which our building regulations sit. The basis on which we decide whether a tower block is fire-safe is a mess.

    Accepted professional practice has systematically reduced the fire resistance of our tall buildings.

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