NI Water: After listing his concerns, McKenzie makes a radical suggestion
There’s enough in the UTV programme for a great deal more threads. But here’s something that was new even to Slugger. It relates to McKenzie’s bizarre resignation over what amounts to a few minor irregularities in procurement (by which I mean these were monies legally spent, and which the Department was not in a position to claim back)…
MacKenzie had enough and resigned on Monday morning Jan 18. He told the Department for Regional Development which oversees the water company.
Anxious not to lose him MacKenzie was asked by a department official what it would take for him to stay.
What the Chief executive then said provides the crux of the story we have been researching over the past three months. In the course of this investigation we have discovered a trail of emails and other communications which shed new light on why the four non executive directors were fired.
Among the documentation we have obtained is a summary of this critical meeting between Laurence MacKenzie and the DRD official.
After listing a series of concerns including how his health was suffering and how his reputation was at risk, MacKenzie makes a radical suggestion. He said as other directors had been in charge when the contracts problem arose, they should consider their positions. Anyone familiar with management speak knows that Mc Kenzie is saying perhaps those directors should resign.
On the same day officials in the DRD seek information about regulations governing the dismissal of directors from NI Water.
Just as an aside
Can we compile a list of those Ministers run by their Civil servants and those who are not. To begin I suggest
Conor Murphy Run
Michael McGimpsey In charge
Note to any civil servants looking in following last night’s broadcast, please contribute.
Excellent work Dangermouse
“although I think they meant Penfold” (Agreed ;-0)
More detail here…
http://www.newsletter.co.uk/news/Ministers-explanation-undermined-by-emails.6478452.jp
Mike Don’t necessarily agree with dot but on watching the programme your responses seemed to indicate the failings of the non execs was just a minor procedural issue . Did you mean this to be the case ? As i think all observers would conclude it is clear that there was absolute disregard for all of the standard procurement codes and eu regulations . Do you not think the non execs and the board should accept the responsibility for such poor practice and lack of governance in the organisation ?
Absolutely. It’s the only way to have real clarity.
Mick, can I just ask, do you believe all the major issues are out in the open now, or have you suspicion that there is alot more out there to come yet?
These ministries that S.F run are fast becoming an unmitigated disaster
Education under Ruane is a complete shambles, to the point were they were forced to replace her on TV and Radio with John O’Dowd from the University of Craigavon. The mere fact that she has not resigned only illustrates that she was the wrong choice in the first place.
DRD under Murphy well obviously it’s not under Murphy at all, with the Dirty Water scandal brewing it’s apparent to all that he’s owned and exposed as owned. He really only has one option now!
Deputy First Minister McGuinness has never made a decision for us to judge him on…. Well he made one that was never to make a decision and let the civil servants run his office; he seems to have opted out of politics altogether and has become part of the system.
Agriculture has thieving farmers claiming tens of millions from the Europe that they aren’t entitled too and Gildernew stating “I’m not sure anybody’s really to blame”
That’s all fine but there is a danger when comparing value for money For non execs. Taking that approach will just mean you end up appointing people because they are cheaper, not because they are better and make a real difference driving major change and saving the tax payer money in the long run. The best non execs cost a lot because they are good. Personally I would rather see NEDs with world class experience of driving change and improvement in major scale organisations or utilities. And if you had to offer £1500 per day or whatever to get the right calibre so be it.
Mick, I thought you would have noted from the tone of the comments and the exclamation marks that my tongue was firmly in my cheek.
Have a look at my 12.35 transcription. Is Murphy referring to contract A? If so, that places him at the heart of the action around August 10. I’m going back to the July 1 PAC report to see if there is a mismatch between Murphy’s claims and those of Priestly and MacKenzie.
Wee Dangermouse – hiliarious!!
The unelected deputy First Minister and indeed First Minister?
Remember that the DUP and SF got rid of the cross-community vote, so they are party selected leaders of the house than elected and lack wider political endorsement.
Baxter,
I don’t necessarily mean to imply that. But I am struggling to understand just what the Board’s failings were. It’s not quantified in the body of any of the IRT’s draft and final reports.
Further is no documentary evidence quantifying how much if any of that £28 millions was actually misspent. But I do know this problem escaped Ernst and Young, and PWC.
It works out at about 1.6% of the total money spent on private contractors. Now, if you wave a big figure like £28 mill and don’t explain what you mean by that, then a lot of people who know no better (because no one inside or outside the machine whose job it is to report these matters honestly and openly is telling them) will believe Mr Murphy when he says he acted strongly and decisively… I’m all for that, but, hey what if he creamed the wrong people by the misdirection of his PS?
I come back to my previous point. The Board ordered the internal review which eventually quantified the problem, but found themselves under investigation before they had had a chance to meet and respond to the report.
And then look at what happens. The one man left on the Board was the only one who was in a position to know exactly what was going on: ie Don Price as a member of the Audit Committee.
That’s no slur on price btw, it is simply further proof that there was little substance to the allegations in first place.
This was a hierarchy pushing awkward individuals (which is what NEDs are supposed to be) out of the system. What we are no nearer finding out is, why?
In the meantime, is the government run NIWater getting fleeced by some sharper operators? At a £1 Billion in contracts, you would have to think so.
And yet, where are the figures?
What are they up to?
Well the NI Civil Service could use the law set out below to find out:
The Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000
Lawful interception of a communication
3. – (1) For the purpose of section 1(5)(a) of the Act, conduct is authorised, subject to paragraphs (2) and (3) below, if it consists of interception of a communication, in the course of its transmission by means of a telecommunication system, which is effected by or with the express or implied consent of the system controller for the purpose of –
(a) monitoring or keeping a record of communications –
(i) in order to –
(aa) establish the existence of facts, or
(bb) ascertain compliance with regulatory or self-regulatory practices or procedures which are –
applicable to the system controller in the carrying on of his business or
applicable to another person in the carrying on of his business where that person is supervised by the system controller in respect of those practices or procedures, or
(cc) ascertain or demonstrate the standards which are achieved or ought to be achieved by persons using the system in the course of their duties, or
(ii) in the interests of national security, or
(iii) for the purpose of preventing or detecting crime…
“The Board ordered the internal review which eventually quantified the problem”
MacKenzie claimed he ordered the review at the July 1 PAC session and now Murphy says “.. so the core issue is here is that attention my attention was brought to the fact, initially in relation to one contract that there was something on-toward going on within NIW and I asked for further inquiries into that and that turned up 73 contracts with £24.5 million of awarding of contracts which couldn’t be defended which was done in an improper fashion”
That looks like three separate claims to the same order.
No. And yes.
Indeed.
Both the Minister, and the man whose big idea it was to get rid of the board instead of him are pinning lot on a PAC that has already contrived not to take evidence from the one Board member who has offered to give oral evidence (covered by parliamentary privilege) but told him instead he could give it in a written form (which isn’t).
Fair enough Mick, will be interesting to see what comes out.
But remember PWC and others has had its nose in the trough there too for years across the public sector so the fact that they missed the core issue about consultancy contracts shouldn’t surprise anyone.
And I noted from someones post earlier on your site that PWC awarded NIW some “standard of excellence” or other – maybe just a cynical sop for PWC to justify the vast amount of money spend by NIW on them.
I’ve only started following this recently but am amazed at that Paul Priestly would go out of his way to so openly deflect any criticism of his own department. It’s a joke and I hope the PAC get to the bottom of it and that heads ultimately roll.
The point made in the programme last night about the cosy relationship between the consultancies and the purchasers should not be underestimated. You only have to look at the shambles in Enron and the US Banks and the world wide financial disaster caused when independance of advisors was allowed to be compromised through cosy relationships and people looking after each other.
Any anyway, why is there so little skill internally within NIW that you need expensive consultancies brought in to undertake what are in many cases relatively meanial tasks!!
Interesting times tho. I hope this scrutiny is a wake up call across the public sector and that governance standards significantly improve. Although if everyone is made to constantly watch their backs for every decision, the already treacle like pace of decision making across all departments will only get worse.
What was peculiar about “the Gilmour sequenced departure”?
‘There is very little detail anywhere, from either the PAC hearings or the UTV Programme behind the reasons for the single tender contract awards. Some of it may well have been for good reasons, some not. We still don’t know.’
Yes, I’ve raised this point on a couple of occasions now.
DRD/NIW wouldn’t be behind the door in laying specifics on us if there were any specifics.
My gut feeling is that they haven’t don’t this because they can’t. As you say, many of these contracts could very well have valid reasons for single tender.
It would not be unheard of for businesses to tack on ‘other’ contracts, i.e. if you do one thing under competitive tendering terms, and the purchaser likes what they see, they may well invite you to do the same, in another office, building, location, at the same price previously quoted, or on a pro-rata basis. It’s relatively normal action, in both the private and public sector.
Would anyone like to see word-for-word responses to FOI requests from the NIAO and another agency?
These would give rise to a perception that NIAO takes its cue from other government agencies it’s theoretically independent from.
‘in my experience some contracts have a clause of sorts inserted to allow renewal unless the department have had cause for complaint’
Exactly so, John. The old ‘for a period of x years with an option to renew for another x years’ is commonplace in contracts.
Oh yeah I would
Baxter,
I agree with all of that. ESP the bit at the end. I really do hope the political parties can find a way to act in some concert here. They have more to gain than lose by working matters through the PAC as thoroughly as possible.
‘Taking that approach will just mean you end up appointing people because they are cheaper, not because they are better’
Agreed, Baxter, but then that’s the nub of the entire ‘procurement problems’ matter too.
Did we, the stakeholders, get ‘cheap’ or did we get ‘best’?
Do I, as a stakeholder in NIW, entrust senior managers to make decisions on my behalf? Do I hope that they reach conclusions based on their knowledge and experience, which outweighs procedure, in my opinion?
\Priestly, I suspect, will be viewed by his own peers as the stupid boy who got caught with his fingers in the cookie jar and (almost) gave the game away for the rest.’
Ah, no.
Priestly HAS given the game away. I would imagine that, in terms of his standing in the corridors of power, he’s now toxic.
If there’s anything to be learned from this (regardless of what PAC say or do) it’s that there is some sense of democracy in action, where a few interested bystanders, a journalist and a blog can actually drive a story upwards
And it’s a reminder that when these puffed up, self-important oiks get the run of themselves, there’s always someone (email leakers, people who highlight the absence of proper catamarans, what have you) who will do the right thing.
There will always be someone who will do the right thing.
It’s also interesting to find that at least some of our politicians, Dallat, McGlone, Purvis, for example, also feel it’s important to keep hammering on at ‘the right thing’.
No one has a result, yet, and in typical political fashion we may end up with some fudge job from PAC, but whatever way it goes, the lesson to people like Priestly (whose name curiously emerges in respect of matters where people try to do the right thing) is that the days of the little fiefdoms, if not at an end, now have a sort of civic minded UNHCR force patrolling his (and others) borders.
Malairt, I’ve posted some details on NALIL blog.
MacKenzie’s antenna picks up a whiff of a procurement problem circa August 10, 2009. David Gilmour, an NIW executive, is Director of Procurement on August 4 and his title is changed to Commercial Director by August 18. The whiff was contained in an email from Gilmour on August 10. Some time later the post is made redundant and Gilmour is gone. The change of title looks to me like a smokescreen.
MacKenzie claims he drew Mellor’s and Priestly’s attention to whiff around that time and Murphy’s comments on UTV would appear to indicate that he knew too and that he ‘asked for further inquiries’.
The PAC needs to sort out who was directing who at various times after MacKenzie took up his post and who may essentially have been the messengers.
sfsfa
Ah. I see.
That’s a red herring. The title was Commercial Director from beginning to end. It’s easy to get titles wrong and this is just one that ‘s got through the checking process without being spotted..
http://www.s1jobs.com/job/230251397.html
link to original job advert