The documents For Argyll obtained from Argyll and Bute Council under Freedom of Information demonstrate the monkey business that was the Chief Executive’s request to Audit Scotland to conduct a thorough review of the Castle Toward / Actual Reality affair.
The documents show that, while Audit Scotland – and this has all the appearances of a prior agreement – chose not to investigate the heavy matter of the affair, they nevertheless expected Argyll and Bute Council to conduct a thorough internal investigation of the substantive issues.
The Assistant Director of Audit:
- provided the Chief Executive with guidance and a template for what should be done;
- made it clear that the commission expected this to be done;
- asked for a note on how the council ‘intends to progress this issue’;
- and noted that findings from any council investigations would be considered bu Audit Scotland as part of their annual audit responsibilities in relation to council governance.
The documents then show that following this instructive communication, the CEO did nothing.
She did, however, take care to make sure that a council meeting three weeks after the auditor’s wishes had been communicated – and, naturally, at the very last gasp of a long and complex agenda – ‘endorsed’ a ‘view’ she had extracted from the council Group Leaders, that ‘no further action is necessary in respect of this matter by the Chief Executive‘.
This is the CEO’s Home Free card.
Should the audit commission ever inquire as to what had happened, all she has to do is produce this ‘decision’ from council. Manufactured as this clearly was, it will still be sufficient to pass the commission’s undemanding tests.
The evidence for this masquerade is detailed below.
The choreography
First, the Council’s Chief Executive, Sally Loudon, writes to the Assistant Director of Audit at Audit Scotland, Fiona Mitchell Knight, on 7th February 2013.
Mentioning that the two of them have ‘previously discussed’ the matter, she asks Audit Scotland to consider reviewing ‘the Council’s actions in 2009 / early 2010 in respect of Castle Toward and its dealings with Actual Reality at that time.’
She suggests terms of reference which no one could see as remotely defensive – and, as we have noted earlier, were eye-widening in their bullishness. So gung-ho an invitation would be uncharacteristic of any local authority.
On 28th February 2013, Fiona Mitchell Knight replies: ‘Whilst responding to the council’s request for assistance, you will appreciate that as your appointed external auditor, Audit Scotland’s independence cannot be prejudiced by any work we carry out in this area. In this context we do not consider it is appropriate that Audit Scotland carry out work to cover the terms of reference as stated in your letter.’
Ms Mitchell Knight goes on to say that Audit Scotland will, however, ‘review the sales of Castle Toward and Ardentinny as part of our 2013-14 annual audit.’ The following couple of sentences set concentric rings of razorwire between the minimal and technical review offered and the matters that obviously require serious scrutiny.
As the FoI documents show, the CEO’s briefing to Audit Scotland, accompanying her letter of request for review, materially misrepresents some issues and omits others altogether, providing a steer which misdirects Audit Scotland’s assessment of the matter in major degree.
Audit Scotland’s protective measure
However, having offered a token response to the CEO’s request for a no-holds-barred review – which, as the documents show, was never sincere – the auditor goes on to outline the internal investigation of the matter which Audit Scotland would expect to see.
For the commission, this strategy ensures that the matter may be fully addressed, while keeping its own feet out of the mire.
Ms Mitchell Knight says to the CEO – and the emphases are ours: ‘However we acknowledge that the council will want to seek reassurance on the remaining areas of concern raised. I would make the following comments on the governance arrangements that we would expect to be followed, as good practice, in a council in such situations.
‘The council should consider whether it has taken appropriate action to resolve the concerns raised internally. We would expect that the council considers what governance arrangements, cods of conduct and local protocols are in place for clarifying role and responsibilities of members and officers in such situations. The council’s statutory monitoring officer will have a key role in advising councillors and officers about the process to be followed in resolving the concerns raised by members, to be addressed by officers. Advice would be appropriate on the governance and legal position of any proposed actions. This is of particular importance given that some of the concerns raised relate to actions taken by the council prior to the last council elections, i.e. decisions made by the previous council. We expect that resolution of this issue would involve senior officers being asked to respond to the concerns raised on behalf of he council.‘
Finally, the auditor says – and again the emphases are ours: ‘We would be grateful if you would let us know how the council intends to progress this issue. Findings from any investigations initiated by the council would be considered by us as part of our annual audit responsibilities in relation to our review of the council’s governance and internal contra arrangements and Best Value arrangements.’
It is clear from the content and tenour of this communication that Audit Scotland expects Argyll and Bute Council to undertake a thoroughgoing internal review of ‘ the remaining issues of concern’ – the major ones the audit commission deems it best to stay away from itself.
It is clear that such a course of action is not only an anticipated natural next step but is explicitly viewed by the auditors as ‘good practice’.
The commissioner asks to be kept informed of the council’s plans for such an investigation and of its findings – which, again explicitly, ‘would be considered by us as part of our annual audit responsibilities in relation to our review of the council’s governance.’
It is worth noting that had the auditor been briefed by the CEO to appreciate the actuality of the situation, it is unimaginable that she would have suggested, as she does here, that ‘the statutory monitoring officer will have a key role in advising councillors and officers about the process to be followed’.
The council’s statutory monitoring officer in question is Douglas Hendry, Executive Director for Customer Services – an officer whose own conduct is at the heart of the matter to be investigated.
And then?
Following this pretty detailed guidance on what Audit Scotland expected the council to do to address the major concerns on this matter, what the Chief Executive goes on to do is fascinating – and indicative.
Nothing.
The fourth document in this FoI release is a paper presented to the Council by the Chief Executive on 21st March 2013, three weeks after receiving the letter from the auditor outlining the detail of an internal investigation the commission expected to see undertaken.
The three week gap between the auditor’s brief to the CEO and this meeting could never have hosted even an attempt to set up an internal investigation. The CEO clearly had no intention of delivering the expectations of the commission – as quickly became clear.
This meeting opened with what the minute described as follows:
‘The Depute Provost ruled, and the Council agreed, that the business as dealt with at item 26 be taken as a matter of urgency as the report by the Chief Executive provided an update on the review of issues relating to Castle Toward and Actual Reality and information from Audit Scotland.’
Item 26 had been placed as the last item on a weighty agenda, after several items clearly of much lesser import. The highlighting at the start of the meeting did not mean that the item – so called ‘a matter of urgency’ – was brought forward as one is entitled to expect it would. It remained as the last item taken, when councillors’ attention span is inevitably at a low ebb.
In another sleight of hand, perfectly attuned to this being the last item on a long agenda, the CEO attaches as appendices the two letters discussed above – but makes no reference whatsoever in her short report [which members will read] to the detailed brief the audit commissioner provided to the CEO in respect of an internal investigation the council was expected to carry out.
In the report, members are simply told that, following the request for a review under the agreed terms of reference which the CEO had put, ‘Audit Scotland have now responded to advise that they do not consider that it is appropriate for them to carry out work to cover the terms of reference as submitted.’
But before even that is mentioned in the report, upfront – following only a brief introductory paragraph, are [and the emphasis is ours]:
2 RECOMMENDATIONS
2.1 It is recommended that the council:
2.1.1 Note the content of the documents : Letter to Audit Scotland from the Chief Executive attached as appendix 1 hereof; Letter from Audit Scotland to the Chief Executive attached as Appendix 2 hereof,
2.1.2 Note the areas to be reviewed by Audit Scotland;
2.1.3 Note that in light of the response from Audit Scotland, and following discussion with Group Leaders that the council endorse the Group Leaders view that no further action is necessary in respect of this matter by the Chief Executive.
The only specific reference in the report to work the commission itself proposes to do, is that it is – ‘to carry out some targeted audit work to review member to member and member to officer relationships’.
Alongside the failure directly to raise the auditor’s direction to establish a detailed internal review – and the omission can only have been deliberate – this selective information on the audit commission’s review intentions can reasonably be read as an intimidatory tactic to drive members to examine their own conduct and forget about the Castle Toward / Actual Reality affair.
The meeting with Group Leaders was and remains unnotified in the council’s calendar of meetings on any date between the 28th February of the auditor’s letter and the 21st March of this council meeting. Moreover, the constitutional authority of Group Leaders is unclear.
It would seem that the CEO managed this meeting in such a way as to present the chamber with nothing to do or discuss, only to ‘endorse’ a ‘view’ taken by the Group Leaders to exempt the CEO from any obligation to take any other action on the matter.
This managed outcome is illustrative of the CEO’s lack of sincerity in what looks more and more like her pre-choreographed synthetic request to Audit Scotland for a full blooded audit commission review, to be followed by an agreed refusal from the commission.
Conclusions
Taken together, these interrelated documents indicate beyond doubt the will on behalf of the power cluster in the council to subvert the possibility of any external review of this matter and not to undertake any internal investigation of it – as Audit Scotland had expected.
We would reassert our view that Audit Scotland has not been complicit in a cover up – although, to date, that is the undeniable outcome of its decision not to engage.
Our view is that the demonstrated and deliberate misleading of the commission effectively directed it to view the matter as a parochial storm in a teacup which merited no more than brief dismissal.
In fact, documented evidence in the public domain indicates:
- the knowing inflicting of a serious and commercially damaging injustice on Actual Reality;
- serious malpractice in knowingly incurring a serious risk to the health and safety of young people for a substantial period of months in pursuit of a covert strategy of its own;
- fiscal mismanagement in leaving the council with a still unsold major property and significant monthly cost in keeping the property as a viable subject for sale.
For Argyll has lodged a substantive request with Audit Scotland to conduct a full investigation of this matter.
As things stand there is a chasm between the import of documented evidence in the public domain and the commission’s continuing inertia. This gap threatens public trust in the nation’s scrutiny body.
We fully understand the commission’s reluctance to step into what may well be a deep bog. It is imperative, however, that they engage.
Argyll and Bute Council, by their own admission, was in possession of professional survey conclusions that Castle Toward’s electrical installations were at the highest level of hazard to public safety.
The public cannot understand why, despite this knowledge, for a four month period from July to November 2009, the council did absolutely nothing about this – while allowing the building to be kept open, exposing young people to known and grave risk during Actuality Reality’s residential activity courses which continued there.
Moreover, when the tenant, Actual Reality, offered to undertake the necessary repairs itself, it was actively prevented from so doing.
In the wider public interest, this is the core issue. No one can understand how Audit Scotland does not see it as its duty to investigate so serious an alleged dereliction of duty by a local authority.
The commission has to ask itself: ‘Had there been a death – what would we have done?’
It was the luck of the draw that there wasn’t a death -but what they would have done in that event remains an outstanding obligation.
NOTE: The material we received from Argyll and Bute Councilon 23rd December 2013 in response to our third FoI on Castle Toward matters is, as we were given it, rolled up in a single pdf document here: Castle Toward_2644. We suggest it is downloaded and kept for reference against this and the following articles resulting from scrutiny of this material. It contains:
- The report to Council on 21 March 2013 on ‘Castle Toward and Actual Reality’ by Chief Executive, Sally Loudon.
- A letter of 7 February 2013 from Council Chief Executive, Sally Loudon to Fiona Mitchell Knight, Assistant Director of Audit at Audit Scotland, headed: ‘Review into matters relating to Actual Reality’.
- The Chief Executive’s Briefing paper for Audit Scotland, attached to the 7 February 2013 letter above, entitled: ‘Actual Reality’
- A letter of 28 February 2013 to the Council Chief Executive from Fiona Mitchell Knight of Audit Scotland, as above, and headed: ‘Request for review of matters relating to Actual Reality Learning and Leadership Ltd’.
