We have now seen what is probably the last act in the drama of the ill-fated Community Interest Company. The report into the Forest of Dean Social Enterprise Board by SWAP, the District Council's internal auditors, which lasted from March 2010 until January 2011, was more or less what had been expected by anyone involved in this investigation. Various people were interviewed, including me, and a timetable of events, similar to the one provided by Cllr Bruce Hogan, was drawn up. The conclusion was that, 'while there may have been a lack of awareness and in some cases a perception of a lack of openness, no criminal offence has been committed and due process has been followed in allowing an "in principle" loan [of £26,500] to the Community Interest Company.'

There was some limited criticism of members of the original project board.  Although two councillors were members of this board, and were present at a meeting on September 9, 2008 at which the refusal of the Primary Care Trust (PCT) to back the project was noted, they were not informed that there was a specific letter from the PCT detailing its reasons for refusal. One of these was that the project did not have the backing of staff, which was a requirement of the Social Enterprise Investment Fund (SEIF) grant.  This refusal was not disclosed to the rest of the councillors. Similarly, council officers, although aware that the SEIF bid had been declined, continued to make payments on invoices submitted as part of the loan. Mysteriously, although a senior financial officer did question the sense of continuing with the payments, no-one can recall the outcome of his queries. The Chair of the Enterprise Board, when interviewed, defended his failure to make the refusal of the application to SEIF known to the council by pointing out that there was no requirement for him to do so. No legal requirement, perhaps, but certainly an ethical one, as a successful bid was crucial to the continuation of the project, as he himself declared in evidence to the council in October 2008.

During the Corporate Scrutiny meeting on January 13 at which this report was presented, various councillors demon­strated their unhappiness with the conclusions. This was further illustrated by the vote to accept the report which was by no means unanimous. Cllr Hogan was perhaps the most eloquent when he said that he felt that he had been duped into agreeing to the loan. The Group Audit Manager replied that it is not clear whether the result would have been different even had councillors been in possession of all the facts, to which Cllr Hogan responded that he was certain that if that had been the case then he himself and most other elected members would not have voted for the loan. Cllr Burford pointed out that a glaring omission from the list of interviewees was the consultant, who benefitted from the bulk of the grants and loans. This was not commented on.

There was the inevitable 'lessons have been learned' phrase in the report. It may be that they have, although they may not be the lessons the district council or the auditors refer to. The Scrutiny committees need to become much more forensic in their questioning and investigations. If I, as a member of the public had not pursued this over the course of two years, the entire matter would have been swept under the carpet and forgotten. Therefore, a lesson to be learned is that public surveillance is essential as an adjunct to internal scrutiny.  The investigation will certainly have cost money, and some may criticise this, but it is no defence of poor practice to plead that scrutiny and reporting are expensive, because the alternative is to allow authorities to do just as they like with public funds. The most important lesson is that councillors must be given access to all relevant information when deliberating on the allocation of council tax so that they can make informed decisions. Failure to do this is unfair to them and to the taxpayer. 

Finally, there is a lesson here for NHS Gloucestershire Primary Care Trust, which is about to set up a Community Interest Company (for which it is already recruiting a Chief Executive) to run Community Care Services. The lesson is 'beware of consultants' and ensure you have all the facts before allocating funds. This is an enterprise which is innovative and therefore involves an element of risk. When this risk is to taxpayers' money it is doubly important that all areas of possible default are explored and covered. It is to be hoped that the PCT, which declined to back the Forest Community Interest Company for good reasons, is not about to walk down the same road as the District Council.

– Daphne Pearson (Dr), Tinman's Green, Redbrook.