Ex-city council worker 'blew the whistle on repairs scam six years ago'

Published on Monday 9 May 2011 20:07

A FORMER Edinburgh city council employee has told the Evening News how he first raised concerns about the city's property repair department six years ago.

&#149 It is claimed council officers authorised repairs that were not needed

Eight members of staff have been suspended amid a probe into alleged fraud over statutory notices - orders allowing the council to carry out repairs on private properties and recoup the costs from owners.

A joint police and internal investigation was launched last year but it has now emerged problems in the department may go as far back as 2005.

The ex-employee, who does not want to be identified, told the Evening News he would be "sent out to walk the streets" to find properties with "issues" rather than wait on calls from residents with genuine problems. A "league-table" was also set up highlighting the number of statutory notices each worker had issued, he said.

And he said officers - who surveyed buildings for problems then estimated a repair cost and passed the work to contractors - went on nights out with favoured contractors, who would take them to lap dancing clubs, football games and on golfing holidays in return for work.

Our source said he believed he was suspended for failing to issue enough notices and was eventually forced to resign.

He said: "In 2005, the whole property conservation was re-jigged and I said straight away I would not be involved in a league table. I could see that insecure staff would look to increase the number of notices and would feel pushed to do so. When I questioned what was happening, I was told 'If you don't like it, you know what you can do'. Four weeks later I was suspended. I was eventually forced to resign. It was common knowledge I was suspended for serving 'insufficient' notices.

"The way they started operating was a disaster. The department changed from being reactive to being proactive and they would send people walking the streets looking for problems. We'd only go before if a complaint was made. You have to wonder what the motivation was."

Officers had the power to set up scaffolding on the same day a "problem" was identified, then meet with a contractor the following day. Original costs would often increase after contractors identified further "issues" or took longer than estimated to complete the repair.

Minor statutory notice contracts, worth 15,000 or less, were dealt with by surveyors and contractors without checks, he added. But even when spiralling costs led to inflated final bills - sometimes ten or 20 times greater than the original estimate - the contract was still considered to be "minor" and dealt with on a one-to-one basis. In one of the worst cases, a job originally estimated at 15,000 increased to more than 500,000.

Contracts worth more than 15,000 - "major contracts" - were put out to tender, but there are allegations of under-bidding and sources claim after contracts were secured, bids were increased without question. It has been alleged unnecessary work was carried out and residents charged for fictional repairs. Both the police and Deloitte's financial auditors are now investigating.

Our source added: "There were jobs that would only have cost a couple of hundred pounds to fix, and I wanted to ask residents first if they wanted to repair the problem themselves. But I was told: 'You are here to serve notices'".

Another senior council source said the problems began when a shift in the workings of property conservation department happened around 2005/06. He said: "Officials said notices were clogging the system. All of them used to go to the general purposes committee, so essentially went in front of the council. Authority for issuing notices was then delegated to officers on the ground. It was meant to make the process more efficient, but a group of people created a system that worked for them, and not for the people of Edinburgh. A lot of us have been duped for a long time."

Labour councillor Ewan Aitken called for the latest allegations to be investigated.

He said: "If the allegation of a league table is correct, it suggests the problems in the department are far more deep-rooted and malicious than we ever thought. It would appear that a senior officer tried to blow the whistle and was prevented from doing so. This calls for further investigation."

The city council would not discuss the allegations while the investigation is ongoing.

Director of Services for Communities Mark Turley said: "The council has commissioned an independent investigation relating to the property conservation service."

Department needs fresh start

EDINBURGH CITY Council could be forced to "shut down and start again" its property conservation department after an investigation into past and current statutory repairs notices.

Bosses might have no choice but to order the move, which would cost the city several millions. Dozens of residents are in the process of considering a joint legal action to recoup payments.

It has been claimed that up to 25 per cent of work arranged by the department might not have been necessary. The annual turnover of work rose from 9.2 million in 2005 to more than 30m in 2010, and it is believed that 4m worth of work is currently waiting to be completed.

Eight property conservation employees, including a senior manager, are currently suspended.

It is hoped that the new model will be in place after autumn. One senior council source said he could see no option other than to "stop and start again". He added: "It will cost millions, but we have no choice. I think some staff will be sidelined.

"There needs to be more checks in place and people need to be held accountable."