Cambridge City Council did not receive the money from folk festival tickets which were sold online in 2008. Over £600,000 taken by the ticket selling company SecureTicket UK is outstanding and the company has gone into administration.
A Cambridge City Council press release published on the 7th January 2009 stated that: “the council is commissioning an independent review to look at whether more could have been done to protect the council’s money.” This promise of an external inquiry was repeated by the Executive Councillor responsible for the folk festival, Julie Smith, leader of the council Ian Nimmo-Smith as well as officers including Simon Pugh the council’s Head of Legal Services.
Just before 17.00 today the city council released a news story along with their report into the failings which led to the council losing this money. The report has not been carried out by an independent body as promised, but by Sarita Haggart, Cambridge City Council’s Head of Internal Audit. She has been assisted by one individual from Price Waterhouse Coopers (PWC) who was engaged to give her advice.
Despite the lack of independence the council’s report is damming, it states that those council officers running the folk festival ignored advice from the council’s finance department:
In 2008 a request for financial viability was made for the contractor used, but they were a dormant company and therefore financial viability checks were requested upon the parent company.
The advice from the Finance Department stated that the contractor should not be appointed, however this advice was not followed.
It is shocking that in 2008 council officers had sufficient concerns about this company to recommend they ought not be dealt with, but the views of these internal experts were ignored. The report attempts to blame inadequately trained junior officers for the failings. Not only was the council’s Finance Department ignored by the council staff responsible they also failed to properly work with the council’s in-house legal service, the report states:
There was no clear allocation of responsibility for liaising with the legal department. As a consequence in 2008, the legal department was engaged late in the process and given insufficient time to consider and agree adequate legal documentation with the contractor. Service Officers decided that there was no practical choice but to proceed with an incomplete document on the Friday before the tickets went on sale on the Sunday. However this decision appears to have been taken without escalation within the Service.
The outline plan for the internal investigation makes the only hint that the council is actively pursuing this money which is owed to the City of Cambridge:
The work will be conducted on the basis of strict confidentiality, as the Council is still pursuing the contractor involved for payment of the outstanding monies.
No assurance that an appropriately scaled police investigation is underway is given in the report itself, and there are no details of what the council has done, and is doing to attempt to recover the money. I would have liked to have seen details of how the council has engaged with the administration process, what correspondence it is entering into with the SecureTicket’s parent company, and other associated companies which were involved.
If the city council has been a victim of fraud (as Cllr Julie Smith suggested) an update on the possibility of justice – holding those responsible for the company to account, and perhaps recovering some money – would I believe have been in-order.
The report reveals the council was slow to act following the failure to pass the funds to the the council; this can’t have helped our chances of recovering the money due to the City. It is reported that:
In 2008 the Legal department was not formally instructed regarding the non-payment until 30 September 2008, whereas the funds were due on 11 August 2008.
There are other suggestions in the report that those running the Folk Festival did not attach enough importance to the late / non-payment of the funds from online ticket sales, including the fact that the failure of the company to pay the money barely got a mention in their debriefing meetings.
PWC’s terms of engagement indicate they were asked to provide a public letter to councillors outlining their involvement and this was supposed to have been published alongside the report. The terms state PWC will provide:
A letter at the end of the engagement confirming the nature and extent of the support provided as a ‘critical friend’ to Cambridge City Council during the conduct of the review. [...] You and we agree that the letter will accompany the report that will be made to the Council’s Civic Affairs committee and, as such, will be a public document.
This letter has not been included in the papers prepared for next Monday’s Civic Affairs committee which will receive the report, no mention is made of why it is missing.
The general way the Folk Festival was (and presumably is) managed was heavily critisised by the report which states:
During the investigation of the procurement of the on-line ticket contractor, it has become apparent that there is an overall lack of planning and robust management to enable the Festival to be delivered in an acceptable way.
The way that section is written in the present tense leads me to question if the 2009 festival under threat? Are councillors confident the 2009 festival being run in a proper manner which does not put public funds in Cambridge at undue risk again?
It is notable that there is no mention of the Executive Councillor responsible, Julie Smith, in the report and no evidence that she has been interviewed by those carrying out the internal investigation.