Mike Graham on Grenfell council fraud: ‘Some public bodies have less concern for budgets’

Mike Graham on Grenfell council fraud: ‘Some public bodies have less concern for budgets’

Friday, August 31, 2018

Mike Graham has suggested that there may be “less concern” in the public sector over company finances, compared to the private sector.

Discussing the case of Jenny McDonagh, a former finance manager for Kensington and Chelsea Council who pleaded guilty to defrauding over £60,000 from the Grenfell Tower victims’ fund, he said: “It’s not really anybody’s money when you’re working in the civil service”.

Joining him on the show was Professor of Local Government Tony Travers.

“I take your point that companies have a profit motive and want to minimise fraud, but public sector organisations similarly, they don’t have a profit motive, [but they] have a desire to spend as much money as possible on delivering public services,” he said.

“I don’t think there’s much evidence that given the National Audit Office report, that fraud is worse in the public sector than the private sector.”

A 2016 report by the NAO stated: “The exact scale of fraud within government is unknown but excluding tax credit and benefit fraud, detected fraud in 2014-15 across government was equivalent to only 0.02% (£72.9 million) of total expenditure (£306 billion)”.

It did acknowledge that some fraud may be unreported.


'Whistleblowing award'

Co-host Katie Perrior suggested a “whistleblowing award” being introduced, to which Graham responded: “That’s a bit Stasi-like”.

“Councils and other organisations do encourage whistleblowing, not just about fraud but about bad behaviour,” Travers said.

“The Stasi observation is an interesting one, because in all organisations being seen to be a whistleblower can be problematic. [Professional bodies] can clam up together to make whistleblowers’ lives difficult if they think the whistleblower is going against a professional group.

“But fraud, nobody in their right mind is in favour of fraud. It’s hard to see how whistleblowing even about suspicions of fraud would be seen as a bad thing.”