Following up the Folk Festival Losses – An Update


Sunday, May 24th, 2009. 2:03pm

Screenshot of meeting papers for the special community services scrutiny committee
Cambridge City Council lost £644,951 of public money when the company it contracted to sell folk festival tickets online in 2008 didn’t pass the money it took on to the council.

On the 30th of March 2009 the council’s civic affairs committee received the report of an internal review into the loss and asked questions on it. At that meeting it was revealed that the council’s finance department had advised those council officers running the folk festival not to appoint the company, SecureTicket UK Ltd, which they had selected to run the ticket sales. Not only did the team running the folk festival ignore the expert advice from the finance department, but the council’s Head of Legal Services also failed to take account of it when he signed the contract. I have written a separate article focusing on the details of what was said at that meeting.

The official outcome of that meeting appears to be disputed as its minutes were unusually not reported to the next meeting of the committee on the 11th of May 2009. The draft minutes have not yet been published online either whereas usually they would have been. According to my notes from the meeting the civic affairs committee agreed to suggest to the Community Services Scrutiny committee that they look into the implementation of the recommendations affecting the folk festival operationally. The day before the special Community Services Scrutiny committee called for that purpose on the 22nd of April 2009 a bizarre Liberal Democrat press release,with the headline Lib Dems call for “broader” inquiry into Folk Festival, was published. The Liberal Democrat group on Cambridge City Council has a substantial majority so they don’t need to call for the council to do anything, they can just get on with it. This shows the odd approach to running the council the Liberal Democrats appear to have, they don’t see themselves as in charge of, or responsible for, what the council is doing.

Community Services Special Meeting

I observed the special community services scrutiny committee. Councillors at that committee appeared unsure of what they had been asked to do. They spent a lot of time debating if they ought do nothing and simply pass the buck back to the council’s civic affairs committee on the grounds that the main problems were all systemic, corporate, council-wide issues which would be better dealt with there.

Elected Member’s Approval Needed to Override Professional Advice

Cllr Julie Smith, the executive councillor responsible for the folk festival, asked for two of the report‘s recommendations (2R.16 and 2R.17) to be strengthened so that in the event officers were considering overriding the council’s financial or legal advice in the future they would be required to consult the executive councillor. It appears to me that this edict, while welcome, applies just those areas under the remit of the executive councillor for Arts and Recreation. What hadn’t been scheduled was a timely (special) meeting of the Strategy and Resources meeting which could have made such procedural changes on a council-wide basis, we have to wait until Monday the 29th of June 2009 for the next proper meeting of that committee. Despite there not being an S&R meeting for almost two months councillors at the Community Services meeting agreed that the wider corporate issues could wait to be discussed there.

Better Record Keeping Demanded in Arts and Entertainments

The committee then discussed recommendation 3R9: “A clear communication structure needs to be built into the planning process for the Festival. ” There was a discussion of archiving emails and files as report had revealed some documents were missing. Cllr Al Bander suggested this wasn’t something which could sensibly be discussed with respect to a particular department within the council but, again, was a wider corporate issue. Cllr Boyce who was still present asked if members of the community services department kept “day books” in which they recorded key phone calls etc. The director of the department gave him a look which I interpreted as “don’t be silly”, and said: “no we don’t keep day books”. The community services committee then agreed to require the department to improve its meetings, record keeping and documentation though as too often happens they left it to a private discussion between officers and the meetings’ chair and opposition spokesperson to agree the details.

Members’ Enquiry

One of the main things the Community Services Special Meeting discussed was if they should set up a members’ enquiry or not. Cllr Bick started the debate by saying; “we need to be careful we’re specific and consider the period the whole ting is going to go on for as a result” he asked “What was in those people’s minds who suggested the members’ enquiry” he also questioned: “if it’s going to add anything”.

Cllr Boye explained the intention was that the officer, Antoinette Jackson, was to be asked to come up with terms of reference for the enquiry. He asked that in addition she be asked to include a cost-benefit analysis both of holding an enquiry and of not holding one. He contemplated what the outcomes could be. He said that there was a need for members to have a better understanding of what happened but noted that was not very measurable. He also said that an enquiry would result in more information appearing in the public domain, something which he said “presents a problem for whoever runs it”. He also suggested the members’ enquiry ought be manned by a “clean team” of councillors, people clearly separate from those involved in other ways. He said those councillors on the employment appeals panel might want to stand at arms length for example, though noted this problem could be negated by timing.

Cllr Blair, the meeting’s chair, then started a silly debate about what the committee was actually doing. She tried to rule that debate on the scope of the enquiry was out of order as all that was under discussion was if an enquiry was to be held or not. She even claimed that once the decision had been made to go-ahead with the enquiry (not having discussed its scope and terms of reference) that the committee wouldn’t be able to reverse that decision if when the terms of reference had been considered they thought it wasn’t appropriate.

Cllr Benstead, a Labour Councillor who while not a member of the Community Services Committee was attending anyway, spoke to say he didn’t know what the members’ committee of enquiry would look into: if if would be the future, 2008, or before. He said it was difficult to decide if it ought go ahead or not before having some idea of the scope. He argued that the only way there would be any real value for members would be if findings were taken on board by and applied to the whole council. He said there was still an opportunity to look at an independent enquiry, allowing the whole affair to be looked at from the outside – “warts and all”.

Cllr Blair said that she would answer Cllr Benstead. She said: “The issues to hand are the folk festival, looking into the 2007 an 2008 folk festivals”. She added that the enquiry would not look into the “Big Weekend”.

Cllr Blair then called on Conservative Cllr Howell, who was also attending despite not being a member of the committee. She addressed him as “Councillor Howells”. He started by saying that her earlier rulings as chair had been bizzare. He asked how there could be any meaningful debate if not considering the terms of reference and what could potentially be achieved. He said that without that there was “absolutely nothing on which to base discussion”.

Cllr Howell then turned to the Liberal Democrat press release calling for a broader enquiry. He said that this said the community services committee would look at issues which have a wider impact on the council, and this was “directly in contradiction to what councillor Blair has been telling this committee so far”.

He went on to say the “non-independent report looked almost exclusively at what went on in Arts and Entertainments and slated a number of issues which went on in that department”. He said that a lot of what had been discussed was not high risk. He said the main point was one he had raised at Civic Affairs, that “Both finance and legal were fully aware of a flawed contract so why did they not stop it happening”. Cllr Smith nodded vigoursly while Cllr Howell made this point.

Cllr Howell said that this was “something the council as a whole has to be in charge of”. He then turned to the council’s approach to “risk management” he said “the procedures are all there – we have a policy – it sounds great. The question is why it is not operative”. He than said :”If we don’t get an answer who knows what’s going on in this council; that’s not a party political point, I’m genuinely concerned.” Then musing on why the civic affairs committee had decided to recommend this committee set up a members committee of enquiry, he said perhaps this was as the folk festival could be used as a example. The idea for a members’ enquiry was thrown into the civic affairs meeting at the very last minute by councillor Pitt, there was no debate or discussion of it at all. At that point it did not appear to be a major strand of the Liberal Democrat’s plans. Cllr Howell finished by saying that putting out press releases saying that the community services committee is going to look at broader council wider issues was “frankly ridiculous”.

Cllr Blair responded. She said: “Thank you for your comment: ‘frankly ridiculous’. What we have been to agree is to set up a committee, then look at the remit. That is the right way round. The committee of enquiry is right. I take issue with your comments on the way it is being done round”.

Cllr Wright, yet another councillor who isn’t a committee members attending said she accepted what Cllr Blair was saying and didn’t share the concerns raised by Cllr Howell. She said it was sensible to have the task in-front of them (to decide to go ahead or not) then to get the remit sorted. She went on to say: “I find it better to work from the specific. To look at the folk festival from last year in depth, then from there you’ll find there’s links to other departments. I recommend going into as much detail as possible over the specifics. When something has been running for forty years, there’s an attitude that we’ve done it before so it’ll be alright and it keeps going. I would like to feel at the end [of an enquiry] that I can see if Cambridge City Council is competent. I am not convinced that the City Council is competent to run the Folk Festival this year.” She asked that the enquiry be set up in such a way that it can “allay fears of mine, and of members of the public”.

The Leader of the Council, Ian Nimmo-Smith started his contribution by saying: “I feel like the sleeping princess” (I have no idea what he meant). He started by answering Cllr Wright by saying: “The Folk Festival has never been in question. The competence of the council to run the folk festival has never been in question. However problems in procurement have had a serious impact on the council.” He said he welcomed the Civic Affair’s committee’s call for an inquiry to look at the 2007/8 folk festivals and wider implications. He said it had to be a process which is: “owned, managed and trusted by members” and pointed out “even if you go out to an external enquiry there would have to be a member process to internalise and respond to that process”. He said an important deliverable was to allay the mistrust and lack of confidence of a range of members in the degree to which this process has been finished and has been done as well as it should be. We owe it to this council and to its members to have a process which is owned by those members. This committee does not have to be drawn from this committee, it is simply owned by this committee. Membership can be drawn from wherever”. He added that there was some merit to someone from outside the ruling group chairing the enquiry: “so it doesn’t bring on criticism of whitewashes and such like”.

Cllr Al Bander said: “What is at stake here is the reputation of the council in general. The Folk Festival is a trade mark. People are excited about the 2009 festival”.

Labour Councillor Blencowe said that in relation to the recommendation that this committee sets up a committee of enquiry his view was no. He said that the council had already had an internal enquiry which had resulted in the action plan, he said that if the council was not happy with what had come out so far the only suggestion he had was to go out to an external enquiry. He suggested that the recommendations which the report had identified ought be “tackled in a corporate way”.

Cllr Nimmo-Smith responded on this point to say: “The report to Civic Affairs did not say there were wider issues with respect to risk management at the council. They did say there was a failure of risk appraisal on that particular project. This goes back to what Cllr Howell was saying – if there is one problem there must be a generic failing. They could ask the head of internal audit to come and explain to them about risk management. The district auditor could be asked to comment on the fitness for purpose of the existing [risk management] arrangements.”

I cannot believe that Cllr Nimmo-Smith really doesn’t accept that no serious systemic council wide problems have been identified. Junior officers having the freedom to ignore financial and legal advice looks to me like a major problem. As is the head of legal services signing contracts without regard to advice from the council’s finance department. They are serious problems with process which I felt officers appreciated. I would be shocked if processes had not already changed and am surprised there has not been a clear summary published of key changes which have already been implemented.

Councillors went back to the question of if they were going to order the members’ enquiry or not. Cllr Boyce made the, albeit slightly jokey, comment that if the committee decided to pass the buck back to Civic Affairs then members of the community services committee would be put on the enquiry out of spite. He urged them not to do that but to decide to do it or not.

Cllr Knightley said he: “can’t relish the idea of a member enquiry but it is the right thing to do. The report to Civic Affairs was narrow. We should call for a scoping report to tell us the terms of reference.”

Again he appeared to show a failing to understand that it is the councillors who ought be telling the officers what to do rather than the other way round. Cllr Knightley also sensibly asked for a specific report on the costs in terms of jobs which will not be done by staff as a result of resources directed onto a members’ enquiry.

Cllr Blencowe clarified what was being proposed saying “the enquiry doesn’t get launched until after the report which comes to this committee in June. What we’re asking for is some identification of costs within that”. Urging the committee towards the members’ enquiry Cllr Ian Nimmo-Smith said: “this is not a commitment to make a go-no-go decision, that’s deferred to June”.

Cllr Blair caused the meeting to collapse into laughter as she haughtily intervened : “I hesitate to correct the leader of the council but we are making a decision whether to go ahead with an enquiry or not. It’s not conditional on cost or anything else.” Cllr Blair refused to allow any of the other councillors, including Ian Nimmo-Smith, who wanted to respond to her to do so. She insisted on asking the director of democratic services, Antoinette Jackson, to comment. The officer said : “I would expect costing to be included in the proposals, there could be options within the proposals and you might want to take the cost-benefit into account as you make decisions about how you run any enquiry”. Cllr Blair said: “but when we get that report we are not able to revert on our decision to go ahead with the enquiry”. The officer responded “A committee can change its mind”. To which Cllr Blair, still providing the entertainment, said: “Can it? … OK. Thanks for that clarification.”

The meeting proceeded to a vote and decided to request a report on the potential scope and costs of a members’ enquiry to be brought to their next meeting.

Full Council

At the full council meeting on the 21st of May 2009 the folk festival was discussed both during the oral questions and during a formal motion.

Cllr Herbert, the leader of the Labour opposition, tabled the following “oral question” to the Leader of the Council:

What is his view of the lessons from the 2008 Folk Festival ticket loss review, are there council wide lessons to be learnt or was it all the fault of Arts and Entertainment?

Cllr Ian-Nimmo Smith answered briefly saying simply: “there are clear lessons for Arts and Entertainment and council more corporately”. He added that : “these were picked up at civic affairs.”

Cllr Herbert followed up by asking: “why, if that was the case, when he has had the opportunity to make comments in public, to the media, why does he place all the blame on Arts and Entertainment?” He said that the leader had spoke to Heart radio and had said: “We will be taking action with respect to certain staff within Arts and Entertainment” but had made no reference to wider corporate issues.

Cllr Nimmo-Smith responded to say: “Quite clearly at that stage we didn’t have the benefit of the report we had to Civic Affairs”, he accepted he had made the comment quoted but claimed that nothing in his comments had precluded “additional lessons being learnt outside Arts and Entertainment”. He said at that state the clearest focus was on actions by the Arts and Entertainment team.

Cllr Dryden also asked a question on the folk festival, this time to the Executive Councillor for Arts and Recreation, Cllr Smith:

Is the Executive Councillor happy with the internet sale of folk festival tickets this year?

Cllr Smith responded to say she was broadly happy with way online ticket sales went in terms of functionality of the system and reported that all the non-residents’ tickets had been sold within forty-five minutes.

She said there had been “a few technical hitches in terms of receipting” and “far fewer complaints”. She also reported that the council already had money coming into its bank account from the ticket sales.

Cllr Dryden followed up by saying: “It sounds like the company has done a good job. So why weren’t they asked to tender in previous years?”

Liberal Democrat councillors shouted out: “Because they weren’t. ”

Cllr Smith took a few seconds to reply, as she was being bombarded with further flippant suggestions for replies from her party colleagues. She said that : “In previous years the system had been bespoke, this year is quite different, we have taken a new approach that’s quite different. The system in 2007 worked pretty well, in 2008 it technically worked quite well too though there’s the business and financial side I’m not going into.”

Council Motion

Councillors Herbert and Blencowe proposed the following motion to Cambridge City Council’s Full Council meeting on the 21st of May 2009:

The Council agrees that the proposed member-led Committee of Inquiry into Folk Festival arrangements should report to Civic Affairs Committee given the need to consider council-wide and audit issues, and integrate it with the responsibilities of Civic Affairs for:

  • monitoring the implementation of its Action Plan re: the review of 2008 Ticket Sales.
  • considering also the agreed additional review by the Chief Executive.

Cllr Herbert introduced his motion by complaining that there had not been an external enquiry despite one being promised. He also complained about pre-emptive statements by Liberal Democrats, including on the radio, before the Civic Affairs meeting. While he described the long civic affairs meeting as a “detailed piece of scrutiny” he said there were deficiencies particularly with respect to the range of people interviewed and the fact it was an internal enquiry. He also said it was premature to refer the action plan immediately to another committee.

He noted, without indicating if he would accept the role or not, that the Liberal Democrats appeared to be suggesting they might offer the opposition the opportunity to chair the enquiry.

Cllr Herbert explained why he thought the Civic Affairs committee ought lead the investigation:

  • Civic Affairs is the audit committee
  • Civic Affairs is a council wide committee
  • Civic Affairs has the remit

Another argument he put forward was that under the Liberal Democrat proposals he, and other members of the Civic Affairs committee would have to start attending the Community Services Scrutiny Committee meetings in order to stay on-top of the progress of the investigation.

Cllr Ward said that he had some sympathy for the points made in the motion. He, like the leader, didn’t seem to think evidence had already been presented of systemic problems. She said that that he was sill unaware of if the problems were restricted to Arts and Entertainments or not. He said: “I’m not going to annoy my colleagues to the extent of voting for this motion; but if the audit planned [the members' enquiry] does include some council wide investigation then Civic Affairs will have to take a role.”

Cllr Boyce spoke to say that he had not voted in favour of considering this motion at this meeting (Councillors vote on if they want to debate a motion before they debate it). He said it pre-empts the Community Services’ Committee’s activities. He said the remit had to go further out, to get members involved doing some actual work to find out what happened. Cllr Boyce said his committee had asked community services to take on board the action plan, which relates entirely to Arts and Entertainments and asked for a report on this year’s folk festival in October. He said in the long run audit will come back to civic affairs and say how the action plan went.

Cllr Boyce criticised Labour election leaflets which say: “scrutiny doesn’t work”, he claimed Cllr Herbert was asking a regulatory committee [Civic Affairs] to do scrutiny.

During the discussion Cllr Boyce revealed he had asked the new chief executive to work on guidelines for internal investigations, particularly with respect to ensuring that where they revealed problems in other departments than the originating one leads were followed. He also wanted members to be involved in any future internal enquiries.

Cllr Benstead spoke to say at present he didn’t know the scope of the proposed member lead enquiry. He said: “my view from attending Civic Affairs was that there were a number of issues, the relationship between several departments of the council so it is logical that the committee of enquiry would report back to Civic Affairs due to the number of departments involved.”

Cllr Herbert said he was bemused and confused as he couldn’t see the chain of responsibility. He noted the new chief executive’s review of internal investigation procedures had not been discussed at a council committee meeting. He complained that it had clearly only been discussed within Liberal Democrat group meetings and had not been discussed with other councillors and called it “just one area of mystery”.

The Liberal Democrats voted against the motion so it was not adopted as council policy.

Previous articles

While the loss of £644,951, which is a huge amount compared to Cambridge City Council’s “disposable income”, doesn’t appear to have really invoked much response from the City’s residents I have written a few articles on the subject:

12 comments/updates on “Following up the Folk Festival Losses – An Update

  1. Richard Article author

    I have written to Cambridgeshire Police to say:

    Could you please let me, and other Cambridge residents, know what progress the police have made in terms of attempting to recover the £644,951 of public money lost by Cambridge City Council when their online ticket selling contractor, SecureTicket UK Ltd., failed to hand over money they had taken for tickets to the 2008 Folk Festival to the council.

    Executive Councillor Julie Smith has stated, in the presence of a police officer, that she believes the council may have been the victim of fraud. Do the police share this view? Is there an investigation? Is there any prospect of the people involved being brought to justice?

    Who is leading this investigation, is it Cambridgeshire police, another force, or the Serious Organised Crime Agency?

    I would like to suggest the police write a letter to the local paper and place an article on their website reassuring Cambridge residents that they are taking this loss of public money seriously. I believe such a gesture would be in line with the policing pledge which promises: “monthly updates on progress, and on local crime and policing issues”.

    I would also like to suggest it might be appropriate for the police to offer to provide evidence to any Cambridge City Council members’ enquiry, particularly if it could assist in the recovery of the money.

  2. Geoff

    It is all simply amazing that the council is so easily defrauded – makes you wonder how many other frauds and mis- management of public funds are been perpetuated right now. What does our Liberal MP have to say about his councils actions?
    Please change your blog theme – it is really hard to read white text :-(
    Keep up the excellent work!

  3. Geoff

    I wonder if it is possible for local residents to sue the person who signed the contract for gross negligence especially as they ignored the advice of their own officers?

  4. Oliver Stanton

    In the current climate where MP’s are resigning for less, this is utterly scandalous. Sure there should be a fraud investigation into the ticket company, but how our elected representatives can remain in office after taking such a decision defies decency. Incompetence at best. If this was a commercial organisation desks would be cleared and such blatant bad judgement punished. BTW Full Festival for resident last year was £89.00. This year £102.95. We’re supposed to be in a deflationary economy.

    More depressing is the lack of public outgrage at the original act, and the length of time an inaction since.

  5. Richard Article author

    Jonathan Hutchinson of Cambridgeshire Police has replied to my above enquiry. He has confirmed there is “an ongoing enquiry”, though no further information has been released.

    Dear Richard,

    I hope you are well. I must admit that I do miss your often challenging, but extremely pertinent questions at Area Committees!

    Superintendent Mike Brown has asked me to contact you following your request to clarify whether there is a Police investigation into the Folk Festival ticket revenue.

    I can confirm that Cambridgeshire Constabulary has been working closely with Cambridge City Council over this matter for several months and investigations are ongoing. Unfortunately, I cannot make any further comment, as I do not want to prejudice what is an ongoing enquiry.

    You raise good points about the necessity to inform the public, and this forms part of a wider communications strategy. Again, for operational
    reasons, we are not pro-actively going to the media on this issue.

    I hope this re-assures you.

    Jon

    T/Detective Chief Inspector
    Crime Manager
    Southern Division

    I should note he’s missing my questioning at Area Committees because he’s been promoted, not because I’ve stopped asking questions!

  6. Richard Article author

    A report to tonight’s Civic Affairs Committee states

    “19/02/2009 – Meeting with Police Fraud Investigator”

    I think this is the first mention of the police investigation by the council in any council papers. The money was overdue as of August 2008, the police meeting was in February 2009.

  7. Richard Article author

    I have just asked a public question at Cambridge City Council’s Civic Affairs committee.

    I asked if the “19/02/2009 – Meeting with Police Fraud Investigator” line in the report was the first and last time the council had contacted the police, and if they were working with the police to try and recover the public money.

    The council’s principle auditor confirmed that the first contact with the police was in-fact on the 19th of February 2009. She said that they have worked with the police since then and that work is ongoing.

    I said I was surprised that the council were so slow to call in the police.

  8. Richard Article author

    Later in the Civic Affairs committee meeting on the 24th of June Cllr Herbert followed up on my question. At that time Simon Pugh, the City Council’s Head of Legal Services was present. Cllr Herbert asked what could be said in public about the progress of the police investigation. He noted that the presence of a mention, for the first time, of the police investigation invited members to ask about it. Mr Pugh said that he was sure councillor appreciated the sensitivity of the police investigation and in public he could do no more than confirm the matter had been referred to the police and confirm that “matters are proceeding”. He said that he had been to check when the first contact with the police had been, and he was now able to correct the timeline and say it had been the 30th of January 2009. [On the 8th of January 2009, Inspector Kerridge had been present at a West-Central Area committee when, in response to a question I asked, Cllr Julie Smith said the council had been a victim of fraud (she later disputed the minutes and claimed to have said "may have been a victim of fraud".]

    Mr Pugh noted that Price WaterHouseCoopers were due to visit the council the next week and would be providing the council with an update.

  9. Richard Article author

    David, you’re right he is. It was Mr Pugh, Head of Legal, and not Mr Horspool, Head of Finance, I was referring to in comment 10 not some mishmash of them both!

    I’ve corrected my comment.

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