Charity issues

Ex-Mayor Cllr Pegg lies to Police and Crime Commissioner to secure funding

6X4A9280aWhen the ex-Mayor of Derby, Cllr Paul Pegg, submits a bid for £19,750 of public money,  to the Office of the Police and Crime Commissioner (OPCC), based on lies, and inaccuracies, it should be a source of great concern and a matter of public interest.

Was his bid to support a grassroots organisation, something that would truly help the whole community, under-privileged children, or people suffering from social deprivation, the vulnerable, the needy….or a valuable initiative that was in dire need of a charitable helping hand? No..it was for a sound-system, stage lighting, curtains, and drapes for a questionable venture at a new Hall in Mackworth, recently refurbished for £300,000 out of public money.

Background

In 2011/12 plans were taking shape for Derby College to sell its campus at Mackworth to Strata Homes for housing development.  It is common practice in such schemes for those developing the area to fund changes to road layouts, and build new local facilities due to the increased number of people in the area – this is known as s.106 money ( after that section of the Town and Country Planning Act 1990). These are legal agreements largely defined by existing procedures, and are negotiated by Council officers, in conjunction with solicitors and the developer. Derby College decided that as part of its Community obligation that they wanted to leave a lasting legacy in Mackworth.

At the first consultation in February 2012 with the people of Mackworth, in a public forum, a number of options were suggested for this legacy:

Dentist, Leisure Centre, Swimming pool, extend changing rooms, small supermarket, better connections with Mickelover, retain Sports Facilities.

At a second consultation in August 2012, the list was extended to include “Refurbish former Family Centre” ( This referred to the unused dilapidated annexe to the St Francis Church in Mackworth – next door to the Mackworth Youth and Community Centre which was refurbished in 2010 for £500k). In 2012, this was handed over to Mackworth Estate Community Association (MECA) by the Church, at a peppercorn rent, for refurbishment. As MECA only generates a few thousand pounds each year for charitable causes, it could never have funded this project itself. The chair of MECA was Paul Pegg who had been elected as a Derby City Councillor in May 2012.

After Paul Pegg gave his personal support ( in his role as Councillor) to the planning application in November 2012, the significant funding required for the refurbishment of the Family Centre was formalised within the s.106 agreement, along with the new changing facilities adjacent to the sports hall at the old Mackworth College up the road – totalling £350,000. The College believed that this new Hall project was the wish of the community; others would assert that it was largely just Pegg’s “pet project”. There was no current business plan that showed how it could be furnished and operated, financially.

The work was carried out by the Derby College estates team, who employed all the contractors and delivered to a drawing agreed with Pegg. In summary, this was to make the centre usable by the public, new heating and electrical system, toilets, together with FA standard changing/shower facilities. Derby College also provided tables , and chairs, but no other decorations or moveable equipment.

The work was completed in July 2015 at a cost of £300,000 to the design specification agreed with Pegg at the outset. It was opened formally on 22 July 2015 with the attendance of Alan Charles, the Police and Crime Commissioner, before any OPCC contract had been awarded.  The Little Owls Nursey group started operating their daily sessions in the Hall on September 5th.

Bid to OPCC

In 2015, the OPCC had money available to be used for community projects through a fund called NICE  (Neighbourhoods Investing Criminal Earnings) Fund. The idea was to support proposals which would  “deliver a community capital project which will leave a lasting legacy for communities”

“All applications must provide clear evidence of need for the project together with evidence of support for the project from the local community. Applications must also provide examples of proposed community involvement in the delivery or maintenance of the project”

“Bids of up to £40,000 are invited funding will be limited to three projects – one project per policing area to achieve geographical coverage.”

At the time of the bid in June 2015, the Family hall, now called the Mackworth Estate Community Hall, was essentially complete. As far as Derby College was concerned they were about to deliver their legacy project to the community.

On 15 June 2015, Pegg submitted his proposal to spend £19,750 on stage lighting, sound equipment, curtains, and drapes. The bid justified the money on the back of the benefits of the entire Hall project – it did not explain how the community would value ( or whether they were involved) from the specific OPCC funding.

Where were the lies?

  1. In the bid, Pegg claimed that MECA had “raised” £150,000 for the Hall project; this was important to meet one of the key criteria – “community involvement”. In the Freedom of Information (FOI) response, the OPCC stated in reply to one of my questions:

“The Commissioner took the significant fundraising activity undertaken by the local community as an indicator of the value placed on this resource by local residents and therefore considered his investment would add value to this community driven initiative”

Fact: This money was not raised by MECA, ( this charity just about breaks even after covering it’s high “overheads”) , or the community – the entire project was funded by Derby College, and given to the community as part of its own obligation/ initiative under the s106 agreement. No money passed to MECA. 

  1. Pegg claimed in his proposal to the OPCC that:

“We have had to divert some of the funding we had raised for setting up the stage and sound equipment as well as for the tables, chairs and cutlery etc. into the unforeseen structural problems we found during the rebuilding of the changing facilities.”

Fact: There were no ‘unforeseen structural problems’, no money was ‘diverted’, as the project was delivered fully by Derby College. The equipment was not part of any budget. 

The OPCC were fully aware that the equipment was not part of the budget but chose to ignore this inconsistency. In their FOI response they stated:

“The total cost of the refurbishment of the Community Hall was quoted as £331,000 in the Business Plan submitted by the applicant. This did not include the items the PCC sought to fund through the NICE fund.”

  1. The bid suggested that the entire benefits of the community hall would be dependent on the provision of the OPCC funding.

“Once the funding is in place for the tables, chairs, staging and storage it would take 5 working days to get everything ready to open to the public.”

“Once funding is secured and the essentials are delivered and in place we can open with immediate effect.”

The OPCC contract started on 1st October, but Pegg spent all of the money in September-  the invoices were dated in  October so as to comply with the contract.

Fact: The reality was that the Hall could be opened regardless of the OPCC funding.

According to the OPCC, the additional money was only required in the event that they wanted to put on theatre stage shows (this wasn’t specifically stated in the bid)  There was no declared plan for this activity.

  1. Pegg claims “MECA has raised £1.5 million pounds over the last 12 years for various project on Mackworth Estate including £150,000 for the refurbishment of the hall”

Fact: On the MECA website, they state that from 2003-2009 they raised £101k. In the 6 years since 2009, they have given approx. £30k to charitable causes, based on their published financial statements.  If they have, in fact, raised £1.5m – it has not passed through the charities accounts.  Pegg includes in his calculations s106 money which is negotiated by Council officers, not MECA. MECA has no role in this process at all.

Office and Police and Crime Commissioner position

I met with the Chief Exec and Treasurer/Finance Officer of the OPCC about these findings. In summary they were very defensive when presented with this compelling case.  They chose to interpret that this funding was the “icing on the cake” of the Hall refurbishment project – even though that is not how the bid reads. The OPCC FOI response stated that…

“The Commissioner was happy to support the project as the benefits to the local community in Mackworth were clearly stated and local residents had also been involved in the project on a voluntary basis”

The benefits mentioned are not those derived from the OPCC funding but the entire Hall refurbishment project which at that time had been completed and was funded by Derby College. Nothing was stated in the bid that “local residents” had been involved in the OPCC funded project at all.

A few other points which were surprising:

  • The bid was supported by a Business Plan that was 6 years old. The OPCC believed that the project cost was £331k, when the plan actually stated £500k – no questions raised as to where the missing funding was coming from. Had they done so they would have established that the whole project was funded by Derby College
  • Had they established the involvement of Derby College in the delivery of the project ( interestingly there was no mention of the College in Pegg’s bid), they would have seen that the comment about ‘diversion of funds’ could not have been correct.
  • Had they checked MECA’s accounts they’d have seen that their fundraising claims were unsubstantiated.
  • The OPCC were defending the fact that the £19,750 was spent on stage equipment for theatre shows. No plan for this was presented, no numbers suggesting that it was a viable proposition, or that the community actually wanted it. It was what Pegg decided. It was considered by the OPCC as start-up capital for a ‘commercial’ venture….that doesn’t seem to comply with their grant criteria.
  • A report in the Derby Telegraph which quoted Pegg as saying “Then, on September 7, all the stage lighting and sound equipment will be installed.” was dismissed by the OPCC as being potentially a fabrication and inconsequential. Apart from a strong indication that money was spent before the contract date of 1 October, despite the invoices being dated in October.

Given that there were 17 other projects that were rejected in order to fund this “icing on the cake” I was advised that:

  • There were issues about the sustainability of the other projects. However, no evidence was provided by MECA about the sustainability of the theatre-group “business venture” – but the OPCC conveniently assumed that it would be ok in the absence of any evidence.
  • The OPCC wanted to evenly spread the funding between the 3 Derbyshire Police divisions which is why it had to be spent in Derby. Yet, 3 projects were allocated to Derby “D” division, 1 to “C”, and 2 to “B” – not an even allocation. So it didn’t need to be spent in Derby.

I asked the OPCC officers why they thought that Pegg didn’t just tell the straightforward truth in the application – they had no answer.

He could have said:

  • We’ve had a hall fully refurbished by Derby College for £300k from s106 money that covered the fabric of the building only. No money came from the community.
  • We now want to put on theatre and stage shows and need equipment to do that.
  • We have no money, and we can’t generate £20,000 from the community

And then:,

  • Attach the responses from the community saying that they wanted to create a theatre group
  • Attach the business plan that shows that it would be sustainable.

The reality is that the last 2 items could not have been presented, and telling the simple truth would have resulted in the bid being rejected. It met none of the OPCC’s criteria.

Conclusion

Whilst the OPCC defended their decision to give Pegg the money ( which is what I would have expected) it is clear that Pegg lied in order to influence the outcome of the process, and the OPCC were naïve in their assessment and evaluation missing many obvious anomalies.

I raised questions, previously, about another OPCC grant given 2 years ago   “JET: Police and Crime Commissioner waste £11000 of public money on a fruitless contract” which also proved to be a vacuous project. It raises concerns about the OPCC’s due diligence over giving out public money.

This bid was submitted during Pegg’s year as Mayor, when he was Chair of the Mackworth Estate Community Association , and Chair of the local football teams, who were also due to benefit from the new changing facilities.  The fact that Pegg was a prominent member of the Labour Party, as indeed was Alan Charles ( Police and Crime Commissioner at the time) should have suggested that procedures should have been invoked which assured the public that there was no conflict of interest – it is about being seen to be operating in a proper manner.

There are many well-deserving projects in Derby which would have really benefited from £19,750 , and who have not been fortunate enough to have had any money granted to them in the past, and who are not in positions of influence. Pegg’s behaviour has starved a local deserving cause of scarce funds in order to fuel his own vanity project….and his electoral prospects.

More articles about the the conduct of Cllr Pegg

Categories: Charity issues

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2 replies »

  1. Interesting article Russell. I have never even heard of this fund. I am equally interested to know what the other 3 Projects were. Do you know what they were and or who heads them?

  2. This doesn’t surprise me at all, just a bottom level bit of deceit in a routinely corrupt council. No different to central government, all in it for themselves!!

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