This is great, David. What a pity it wasn't leaked earlier (before the renewal of the contract). Better late than never, though. Let's hope there's more where this came from.
There's certainly a lot more detail to come out soon - there are currently a number of information requests under FOIA for details of David McElhinney's interests, remuneration and pension details - since, as the Council repeatedly confirm, he is an LCC employee (see whatdotheyknow.com for details). All stone-walled, but sooner or later they will have to release the information - they were legally required to publish these details about senior council employees by March of this year, but unaccountably left all the LDL people out.
Regarding the conflicts of interest discussed in the legal opinion, the most recent information on the interests of David McElhinney, provided in a response given just a few days ago to Paul Cardin's FOI request, doesn't even mention LDL or BT. So much for being "BT's Client Partner for Local Government in the United Kingdom" - which we now know he is (and is presumably up to his eyeballs in the remarkably similar scandal in Suffolk), in addition to being Chief Exec of LDL, of course.
The excuse given for not releasing the information on the pay of senior LDL executives (all Council employees) was that they would have to go through all the personnel files. So they don't have access to the payroll??? Mind boggling. So much for the new and improved governance arrangements. Do the directors of LDL (including the Council appointed ones, of course) actually know what they're paying this man?? They're certainly supposed to, by law.
And as for the request for the district auditor to investigate all this - he is surely part of the problem, since he happily rubber stamped everything all the way through. But hopefully he will now see the writing on the wall.

As a long-standing Labour Party member, I am thoroughly appalled at this - i do not know what joe andersen was thinking of to allow all this to happen without any cheques or balances, they have allowed Liverpool to be robbed blind and seem to have meekly gone along with it all. It begs the question what hold does mcelhenney have over joe andersen and other members of the labour group for them to allow all this to happen and to ignore cherie blairs legal advice.
joe andersen has got some serious questions to answer and he better make his replies good.

When making an appointment if there is any question of conflict of interest and there are other candidates then the golden rule is not to appointment particularly when the position is temporary.
In the roll of temporary chief exec, one of his first actions was to suspend the council officer who had lead on the report of LDL’s value for money to the council, who was subsequently given an offer he could not refuse and left.
Also during this time a restructure was undertaken it was said that departments were to change and that heads i.e the senior management team may not retain their posts. All were made an offer and all of the senior management team left the authority.
During this time a new chief exec was appointed. He had previous experience of Liverpool City Council. The council he was employed by had also undertaken a large privatisation program where the preferred supplier chosen when he was chief exec. there was none other than LDL.
The new chief exec of Liverpool must now appoint ‘like minded’ people to the now vacant senior management team.
While the appointment of a temporary chief exec was of 6 months duration only , the effects may be more long term.
It would be reasonable to assume that further Liverpool City Council services will be transferred to LDL with the betting money being on Procurement as one of the first.
The matter suggests at best gullibility and that certain people in certain posts need to be looked at to remove even the faintest hint of conflict of interest.

There is a statement on the LCC website that includes the following:
"Provisions exist for whistle blowing and to ensure probity, value for money and transparency".
What a pity LCC does not actually implement these provisions, and it clearly doesn't.
Here is an excerpt from a document entitled:
"OFFICERS GUIDANCE NOTES
DECLARATION OF EMPLOYEES’ INTERESTS",
created in February 2007 by Kenwright (ex city solicitor).

"Employees should err on the side of caution and declare any interests that may allow the impression to be created that they are, or may be, using their position to promote any financial, private or personal interest in any issue relating to their work, including those of their family and friends as well as arising through membership of or association with clubs, societies and any other organisation.

Notes

The following notes relate to the various types of interest set out on the Declaration form:-

1. Membership of Governing Bodies, including all schools maintained by the authority, all further education establishments and all grant maintained schools.

2. Involvement could be either paid or unpaid.

3. Involvement in companies includes, for example, directorships and company secretary, or any other position where a person is actively involved in the running of a company’s affairs, where the company has, or may have, a contractual relationship with the Authority.

8. Please specify interest and nature of interest......

Please note that any declaration of an interest made as part of this exercise, does not diminish or override the requirement of an officer to declare the interest whenever that officer has input to a report or a meeting of the City Council where that interest might be relevant. On all such occasions the officer should make a further declaration as necessary to the appropriate senior officer at the meeting or to the meeting itself.

Neither David McElhinney or Ged Fitzgerald have declared their interests in LDL/BT. The declarations they made, released on 26 August in response to an FOI request by Paul Cardin, are here:
www.whatdotheyknow.com/request/senior_officers_a_requirement_to_3#incoming-205149

A system of whistle blowing can not logically function, if the person undertaking the investigation is an employee of the person under investigation.
The only outcome would be to either exonerate or risk the wrath.
There have been many ‘restructures’ large and small in the council over the past decade. The method is that a new structure is drawn up, which is usually very similar to the existing one, and employees are required to apply for their own jobs. The person who has incurred the wroth is unfortunately ‘unsuccessful on that particular occasion’ and is directed via the redeployment queue to either a lowly paid position or out of the door.
Of interest was the fact that not a single member of the senior management choose to stay and take their chances in their restructure.
Joe Andersons’s letter states a commitment to openness and transparency yet describes the second report as confidential. I would have thought that if the second report exonerates then one would be rushing headlong to publish. Taking the statement at face value does raise the question was it the council who commissioned/paid for the second report or was it other and also did the second report come from the same source as the first or was it from a legal department elsewhere. This could possibly explain how confidentiality applies.
If outside interests for which a financial reward is obtained are not declared then I would say that district audit are obliged to investigate because the investigation can not be held internally and should be done of their own volition without need of a request.

The problem with the confidentiality of the second opinion that presumably addressed the serious problems raised in the first one is that at the time the Council stated that the arrangements had been legally approved by Cherie Booth - they didn't mention anyone else.
The thing I'm struggling with is that Anderson's statement suggests that the Council got several opinions from a range of professionals, including, of course, the district auditor, and then went with the one that suited them.
This would be dreadful, and quite appallingly naive - like accepting the reassurances of an electrician when your problem is plumbing.
Hopefully this is not the case.
But we need to know whose opinion the Council relied on, what their professional qualifications were, and what facts they were given.
Because I cannot see how anyone is not a similarly qualified and experienced lawyer could possibly give an opinion on a matter of law, which this clearly was.
And if the opinion they relied on was not from CB - why give the clear impression that it was?

The next Finance and Resource Committee meeting is on 21 September, and it's certainly worth trying, but in practice it's hard to ask detailed questions in meetings like that. Maybe the thing to do is to submit detailed questions in advance, in writing.
The reason I said it's hard is that on 25 February 2011 two members of the public asked questions about LDL, as a result of comments on this blog to David's piece in February about the cuts (most commented). A lot more councillors than usual were at the meeting, which was good, I suppose, but the answers were just bland reassurances by Jo Anderson in person.
Since then, these issues were raised again (in the comments to the piece about LDL being out of touch, in May), and Louise Baldock, the new Chairman of the F&R Committee answered, here in the comments, promising to obtain some information.
I do not for a second doubt her sincerity, but since then nothing has actually happened, in terms of information, apart from this latest, spectacular leak.
In the meantime:
on 29 June the LCC Appointments Committee appointed Dvid McElhinney, in his capacity as Chairman of LDL, a member of the Senior Management of the council;
a couple of hours after that the Cabinet agreed to extend the LDL contract instead of cancelling it after the end of this financial year;
Ged Fitzgerald, Chief Executive of Liverpool City Council, has been appointed a Director of LDL, along with Alan Dean. They both now have a legal duty to maintain confidentiality about the business of LDL - surely a massive conflict of interest with running the Council;
the LDL Scrutiny committee hasn't met, and has no meetings scheduled;
there has been no further mention of LDL, scrutiny, value for money, performance, governance, open accounting, or anything else, at the Finance and Resources committee.
Julian Todd, the guy who got the original LDL contract published after a 2 year fight with the council, has submitted an information request under FOIA to find out more about what the external consultants who recommended the refresh (in contrast to all the other reports prior to this) were actually asked to do, what information they based their report on, etc.
A number of other people have submitted requests about McElhinney, Fitzgerald and LDL - salaries, conflicts of interest, etc etc.
The problem with FOI requests is that although the Council are going to have to release this information eventually, it's going to take a very long time.
The fact that whole issue of LDL, performance, transparency and governance has not even been mentioned in subsequent meetings of the Finance and Resources committee or any other committee, so far as I can see is depressing.
And what on earth is the LDL Scrutiny Committee doing - you really would think they would have been galvanised into action after the extension of the contract, and all the attendant promises about changes.
But nothing seems to have changed - it's just business as usual. After all, the contract extension has been confirmed, so what can anyone do if they don't do what they said they would? They've brazened things out for 10 years - why change a winning strategy?

WIthout outside intervention and/or lots of money for legal action, all we can do is keep trying to embarrass them, getting as much info into the public domain as possible - and, of course, pray that other public-spirited insiders leak something that is too shocking to ignore.

If, as Anderson and Fitzgerald assert in their statement on the LCC website, the Council really has done everything properly, if LDL really is properly accountable, and value for money, then prove it. Why is keeping everything secret while blagging about transparency and procedures is in the public interest?

This LDL privatisation affair is doing Liverpool Council’s reputation no good and the quantity of smoke suggests there must be a flame somewhere.
Sometimes it is said in politics that it is better to continue with a mistake than admit to having made one.
There is a solution.
The authority to introduce a ruling that no person be they employee or elected member may take up any position with any supplier of services to the authority be it a privatisation partner or other.
They may not take up a position carrying a job title with that supplier nor any position on the board or similar. They may not receive any renumeration in any form be it by way of salary, bonus or gift.
This would apply to any outside supplier or any other company that is connected to that supplier or, in the case of employees at a senior management level no outside companies at all.
If certain employees were to decide not to stay under those circumstances then so be it.
It would send out a clear message of openness and transparency from the ruling party within Liverpool and diminish the importance of recent events.
This could be done and should be done as any obstacles to introducing would be relatively minor ones which could be overcome but it is a matter of whether there is a will to do it or explain why it can not be done

CB’s legal advice was for a period of 6 months gardening leave after returning to LDL so that any information obtained would give no commercial advantage.
It is a fair assumption that the bulk of the information available to a chief exec is also known to the senior management team.
So by the same logic, if a member of the senior management team of LDL were to take up a temporary position on LCC’s management team then they too would require a period of gardening leave.
Following the logic through it would not be possible for a person to be say, the chief exec of LDL and a member of LCC’s senior management team at the same time, changing hats on a daily basis.
This fact was I think recognised in the time of Warren Bradley and Colin Hilton when the chief exec of LDL was moved away from the LCC senior management team.

The position with employees within LDL, I believe, is that they are not employed by LDL but seconded from LCC. Their wages are paid by LCC and their conditions are those of LCC.
When LDL first came into being it was to serve the needs of LCC only . Nowadays it has its fingers in many pies. From a council tax payer’s perspective it would be reasonable to expect that any person who is paid by LCC would devote 100 % of their time to the needs of LCC directly and not to any of LDL’s other business interests as this could be viewed as taxpayers money being used to support a private firms interests whether this time be on a regular or a one off basis.

The problem with anyone within the authority taking up a second position with an outside supplier is that information about any financial renumeration from the supplieris not in the public domain and outside the reach of District Audit. A private firm is not covered by the same regulations as a public body and would classify any such information as confidential.
I would not know whether membership of a board carries any financial renumeration beyond reasonable expenses. I would not know whether any financial renumeration is obtained by being chief exec of LDL although word on the street at the time was that a salary circa 50 K was on offer. This information may have been incorrect or, if correct,may not have been taken up.
It is the fact that this information is not accessible that creates a blind spot as regards accountability.
If there are blind spots then transparency is not possible.
For the still very high salaries on offer at the senior level, it would be reasonable to expect 100 % of an employees time be spent on the needs of LCC and that no position with an outside supplier be taken up. While one needs to meet with suppliers, one does not need to part of their organisation even more so if the outside supplier is not exclusively geared to serving the needs of LCC.

I urge all readers to keep tabs on the Council - and our money - by reading the many helpful FOI requests which have been submitted publicly through the website 'whatdotheyknow.com'.

LCC have been less than forthcoming over any questions relating to the LDL contract, which has prompted the following question :

http://www.whatdotheyknow.com/request/policy_guidance_to_foi_staff_rel

It would be good to see just how open the council are about these matters. I would call on all councillors, regardless of party affiliation, to show their integrity and encourage the council to be open with its citizens.

Thoughts about the amount of work being done by LCC-seconded staff who work at LDL, since LDL now has around 350 external customers (as per a report to the Finance Select Committee in July 2011).
One of these is the Security Industry Authority, a Home Office quango. I decided to see if it publishes proper accounts. It does (see http://www.official-documents.gov.uk/document/hc1012/hc12/1243/1243.pdf).
This document mentions LDL and BT, its partner for licence application processing. There are over 100,000 applications a year, or 500-600 a year, according to them. That's a lot of phone calls etc.
It also reports the amount it spends on "licencing costs" - the lion's share of which will be its fee to BT for LDL's services. This was just under 20 million in 2009/10, and just over 14 million in 2010/2011 (they negotiated a better deal with BT from 30 September 2010).
Some questions come to mind:
1) how many people, or, rather, how many man-hours (person hours) do LCC-seconded staff spend on the 500 plus calls about SIA stuff they receive every day?
2) where is the income for LDL from this work?
3) if they don't receive this income for some reason, and they're doing this work at cost (and why on earth they should do that is beyond me, but it could be true), what proportion of the salary costs of the LCC seconded staff is paid by BT for the provision of these services?
3) why is there no mention of any of this in any accounts, reports, documents, on LDL and the contact centre?
This is just one customer of the 350 they have. Maybe it's the biggest one, but even so, there are another 349 to go.
We need to get a list of them all.

Come on, Cllr Dean, spill the beans. Does LCC benefit in ANY WAY from its relationship with LDL? Or are we just a colony?

You might also want to ask if Cllr Dean benefits in any way

Ronnie is right. Definitely worth asking - and checking, if at all possible.
As I mentioned above, it appears that the district auditor is required to audit the accounts (personal accounts, presumably) of officers who receive money or other property for which they should account to LCC. It's worth finding out if this provision also applies to councillors.
Of course, we also need to know if and when the district auditor audited Mr. McElhinney or any other LCC officer seconded anywhere. And if he hasn't already done so, why hasn't he, and when will this happen?

Re LDL providing IT services to schools. I was chair of the BSF Board when we started considering this. LCC had to engage outside experts to conduct a rigorous market testing exercise before LDL got the contract and that had to pass muster with Partnership For Schools, the government watchdog for BSF, the DSCF itself and also our schools, who needed convincing that LDL really was the best option. I would not have gone along with it if I had suspected for a moment that there was any jiggery pokery involved.

Councillor Clein, just because the LDL offer for the BSF proposal in its first incarnation was the best option does not mean that it will necessarily be the best one this time. LDL itself looked like a great idea when the whole joint venture was set up and look what happened. But we have all learnt to our cost what a difference there is between what they say they're going to do and how they're going to do it, and what actually happens.

Whatever powers Partnership for Schools and/or any other body might have had the first time round, this time they won't be involved.
And without proper external scrutiny, there will be no accountability, and LDL will not remain the best option for very long - because if previous form is anything to go by, once they've secured the contract they will refuse to provide any proper performance and costing information and find all sorts of ways to pad out their prices - bragging about how wonderful they are all the while.

And if you've been reading these comments, councillor, you will know that there is massive disappointment that no councillor has had the courage to ask the Audit Commission to examine the disgraceful episode regarding the yo-yoing backwards and forwards of Dr. David McElhinney, as they did about the comparatively minor episode involving Merseytravel and its chairman. Any thoughts?

See some interesting reading from 2006 by pasting the link below into the browser
http://icliverpool.icnetwork.co.uk/0100news/0100regionalnews/tm_headline=council-could-save-millions%26method=full%26objectid=18074569%26siteid=50061-name_page.html#story_continue
The audit report contains
"And it states that the transfer of staff between the council and LDL should not happen. It is clearly a conflict of interests.”
And also
“And farmed-out services should come under the same rules as those supplied by the local authority, including public accountability and EU legislation.
Independent officials should also be brought in to stop the growing informality of the relationship between the council and LDL.
And it suggests a voluntary code which stops council or British Telecom staff members being employed by the other party within, say, six months of them leaving their job.”
It appears the advice from CB was just confirming what was already known.

Very disappointing that NOBODY asked any questions during public slot on Finance Select meeting

For all this puff and hyperbole nobody put anything to the Cabinet Member or the officers about any of this.

They could have been written questions.

The complete absence of courage from councillors on this issue is frightening. What do you have to fear by speaking out? Surely it won't hurt your electoral chances - we'd love you to speak your minds about this nonsense.

Councillors, you need to be aware that people are muttering about corruption, and if you don't stand up, you're likely to be perceived as corrupt. This is as straightforward an issue as you could possibly imagine in local government - the conflict of interest is transparent. Saying nothing about it is tantamount to saying that it's all okay.

Correction - I meant "value for money", not "value of money".
And I should have clarified that Rotherham cancelled just 3 months ago, in June 2011 (the article is dated 17 June), just a couple of weeks before the craven capitulation of LCC.

Saw the article In the Echo tonight that Cherrie Blair’s advice was followed in full which puts this one to bed apart from....
Section 11 of the report says that the contract negotiations with LDL will be agreed by full council by the 30 June before the doctor takes up the temporary position so avoiding any conflict of interest worries.
The doctor was not appointed until 21 July so no problem there apart from the article in the daily post dated September 6th that says that contract negotiations are still ongoing and are nearing completion.
This is about 10 weeks after Cherrie was told they would be completed and with the doctor in CEO post for about 7 weeks.
If Cherrie was told it would be completed before he took over and she advised on that basis then her advice that it is fine doesn’t count if she was given duff information about role separation time scales.
The echo article talks about having another person involved to make sure everything is fine and above board mentions Jim Gill but, ferreting around a bit, it says that, apart from the fact he was only 2 days a week and apart from the fact that he was supposed to be working on regeneration stuff, he did not start work until mid September.
I don’t think we have the blessing of Cherrie.

The wording used in the article in the Echo came across as more forced than heartfelt.
A bit like the child who has been told not to say that nana’s food is awful and to say it is ok even if what is front of you is something you would struggle to swallow.
Some things are just not adding up with the doctor joining the senior management team.
If the doctor is already sales manager for BT nationwide and he is CEO of LDL in Liverpool and CEO of Lancaster and is involved in various organizations, how much time does he have left for Liverpool City Council’s management team and why would we want him rather than someone who could give their time (and loyalties ) exclusively to Liverpool City Council.
The doctor with his 3 other jobs and their salaries, add in the bonus’s and you would be getting a figure I would estimate of anything over 400 thousand a year. If he hasn’t got the time and he doesn’t need the money why would he want to do this job.
Look at the past reputation of the doctor in Liverpool. There is not a single tax payer in the city who believes that the doctor and LDL would be good for the city. The same applies to the bulk of the Labour party in Liverpool I would imagine and why risk conflict and questions by retaining him in the senior management team when you don’t need to.
If you go to Cherrie Blaire for advice you must know that it is questionable. If you have to go a second time then you must know it is very questionable. Why risk it when you could have gone for someone else and played safe.
Why go for advice saying that the LDL contract negotiations will be completed before the doctor takes up his position when they are going to be completed while he is in post thus nullifying the advice.
The reaction to the ‘leaked document’ was of interest. The comment that ‘if they insult me they insult us all’ implies that it was Joe’s action and not the action of the Labour group as a whole and he is looking for support.
The no one to talk to the press comment after the information is already out suggests maybe that there is more to come.
The article from the Daily Post on September 6th.
Liverpool Council to extend controversial £70m-a-year BT contract
had the question about his u-turn over LDL and the reply was “As far as I am concerned the information that we had been getting about LDL in the past has not been fulsome and it has not been completely in context of what it is that we are receiving in return.”
Now Joe is a very experienced politician and the expected answer would be that this was the last administration and we would never have signed up to that deal or that was the way the last administration managed the contract and we will be managing it properly. It would not be one where you risk reputation by going out of your way to defend past performance of LDL when you do not need to when you could just have gone for the stock ‘Lib Dem mistake’ answer.
The view, rapidly gaining momentum, is that irrespective of what was on the ballot paper, what we ended up with in power in Liverpool is the BT party headed by the doctor. If it is important that the stereotypical image of Liverpool politics is to change then something must happen.
If this was just about a temporary appointment which has been and gone then it will soon become forgotten as yesterday’s news. If this was just about a contract which probably should not have been signed then, provided no bad news comes out, then this too will be forgotten. But if this is about the continued presence of a BT salesman on the senior management team of Liverpool City Council then it is unlikely to go away.
If the reputation of Liverpool Council and also BT come to that is of importance then the continued presence of the doctor as part of the senior management team of the council is untenable.

This is worrying. the document itself is so open to interpretation that it scary to think that anyone in charge of any kind of budget signed up to it.

A couple of things off the top of the head
1. Sponshorship of the echo arena of 1 million - it is called the 'BT conference centre' and this is not a gift as we could have got the same from anywhere.
2. write off of debt - it would not have been enforecable in a court of law.
3. Creation of appreticships - Ldl have their own staff employed on non LCC business and apprenticeships are a means of employment that costs #2.60 an hour,
4. Estimated share of profits over the contract of 1 million pounds is only an estimate and is a piffling amount.
5. Investmenht in social care development worth ..... If this is to be developed by LCC seconded staff then it is already included in the costs.
6. further investment in technology and support - that is what the contract is for and who puts the financial value on this and is it further to or existing contract.
7. improved performance - this is done by staff employed by LCC seconded to LDl and if there is no penalty clause attached it is meaningless.

It has more holes than a gorgonzola cheese and it would not take a rocket scientist to enlarge one to a size that a coach and horses could be driven through

It is seriously scary that this kind of expenditure has gone through in its current form in these times of financial constraint.

Could not help but notice that one of the areas being looked at in the proposed budget cuts was Procurement for everything the council buys.
Seem to remember that when the LDL contract was up for renewal this time, one of the things that LDL asked for was Procurement.
This got a very emphatic No in the Ernst Young report which otherwise recommended renewing.
Be interesting to see if this does go to LDL after yet another 'second piece of advice was received'.
BT buying power may or may not be able to get things cheaper but LDL's 20 to 40 % mark up will make it far far dearer for LCC.
Mind you it would get the nod from Doctor Dave Two Hats after consultation with his chum Ged Two Hats and be endorsed by Joe No One Knows How Many Hats.
I notice there was also mention of doing things more efficiently which could be something or nothing. It could be another way of saying redundancies or this too could be another nice little earner for LDL on the horizon.
If either of these were to come about as long as it was done without conflict of interest then it would be ok !!!!

I generally submit only original academic papers and I know it for sure because I utilize plagiarism detect.

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