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Auditors 'horrified' by LDA funding practices
Pippa Crerar, City Hall Editor09.06.08
The London Development Agency is set to cut back on funding for community projects under plans to clean up the troubled organisation.
The head of an audit panel investigating financial management at the LDA for Boris Johnson is understood to be considering where the axe should fall. Former financial journalist Patience Wheatcroft admitted she was "somewhat horrified" by the mismanagement she has found so far.
Ahead of publishing the panel's interim findings today, she said: "We may well recommend that the LDA should concentrate on backing fewer but potentially bigger projects and certainly that there is more emphasis on value for money."
She singled out what she described as "soft" policy areas - job creation, the environment and diversity - which are likely to lose out on funds.
The panel claimed there had not been "due diligence" before groups were given public funds and that the agency, which spends £700 million a year, failed to monitor adequately how money was being spent.
Mr Johnson set up the audit panel within days of being elected, after the Evening Standard brought to light projects which had received hundreds of thousands of pounds and appeared to do little or nothing in return.
He said: "Some of the things that the London Development Agency funded were fantastic. But some of them were completely bonkers."
Ms Wheatcroft said: "We feel that there was not enough stress on delivering value for money, there was a lot of trial and error." Grassroots community projects which were supported by Ken Livingstone are expected to be the big losers in the shake-up.
A source in the Mayor's office said: "If the LDA had a more tightly defined role, which suggests making it smaller, it could be a more effective organisation." Ms Wheatcroft is thought to be considering job cuts at the agency, which employs 520 people.
The panel's report said: "It does appear that the LDA has been historically an organisation where success was measured by money out rather than objectively observed results."
There were also questions over the effectiveness of the agency's board - which only approved projects with a budget of more than £6million - and the lack of clarity over the relationship with mayoral advisers.
Mr Livingstone said: "The fact that even a Tory-dominated panel keeps coming back to such a small number of projects which allegedly failed and which represents such a tiny fraction of the LDA's budget actually shows the organisation's overall success."
Five projects funded by the LDA are being investigated by police.
All of them - the Caribbean Showcase, Diversity International, Brixton Base, Green badge taxi school and Ethnic Mutual - have links with Lee Jasper, the former race and policy adviser to Mr Livingstone.
Mr Jasper, who resigned in March, has denied any impropriety.
Reader views (9)
What about the "Convention Rights" and/or "Human Rights" of - London taxpayers - to be "protected" from this sort of negligence and/or incompetence from the LDA and/or City Hall?
- Fraser, Telford Park
I agree with Boris that the axe must fall on those who squandered public money. I do volunteer some of my spare time raising funds for charity and have seen a lot of good projects get denied funding while other inferior projects and talking shops get hundreds of thousands of pounds. I am delighted that someone is doing something about it and adequate resources should be channelled to causes that and groups working to help people in need.
- Saad Al-Saraf, London
An example of the "Labour" strain of crony-capitalism, but why the surprise? These 'development' agencies run by town halls have always been operated as slush funds.
- Jack, London
For me, the real issue here is the "lack of due diligence" and the "failure to monitor how the money was spent". This makes it sound like the recipients of huge sums of our money could have run out and bought themselves Bentleys and no-one would have known or cared. I'm hoping that this turns into a criminal investigation for fraud.
- Lmd, London
The reason I devoted about four hours of my time campaigning for Boris was because I hated the third world system of governance we had under mayor Livingstone.
- John Iteshi, London
This is just another good reason for Livingstone to be voted out of office and he should be held completely accountable. I wonder how many millions in 'Londoners' tax disappeared through his complete mismanagement which seemed to favour friends of his former aides. They should be put away if this is true. They have denied funding to those who most need it.
- Mike Stern, london
So does this mean we have a right to sue Livingstone to get back money he wasted from our council tax?
- Josh, london
Since when did local government decide to play Santa Claus with taxpayers money by giving it to any Tom, Dick and Harry under the guise of 'community projects'?
If someone comes-up with an idea for a great 'community-project' then let them test how good it is by raising the funds by charitable donations. If the public feel its not worthy of their freely given donations then its not worth doing. This works for Save the Children, NSPCC, Amnesty, etc..
Expecting the taxpayer to fund these frequently hair brained schemes is just the application of nationalisation to charities and we all know how fantastic nationalised industries were.
- Sean J, London, UK
All the piggies in the trough and the main piggy has walked away scott free - Kenny (not me) Livingstone.
- Edriordan, wisbech
