Two named (and two unnamed) staff members of NI Water under investigation.

As reported on Slugger yesterday, two of the MLAs who came under direct attack from Peter Dixon for their role in the Public Accounts Committee’s masterclass interrogation of the Permanent Secretary of DRD and the Chief Executive (and Sub Accounting Officer) of NI Water have written both to the board of Phoenix Gas and their owners, the private equity firm Terra Firma, as to whether or not they support Mr Dixon’s attack on Stormont’s PAC written on Phoenix headed notepaper and signed in his capacity of Group CEO?

In the meantime, Slugger understands that at least one of the only two staff members publicly associated with the ‘problems’ identified by the Internal Review Team (assembled with what begins to look like unwarranted haste in two days between the 18th and 20th January this year) has received an initial hearing. Ronan Larkin and George Butler were named by the Minister in the Assembly on 15th March, just three days after the sacking of four out of five non executives on 12th March (ie three weeks after the so called ‘deep dive’ report was commissioned) .

We don’t know whether that was on the advice of the Permanent Secretary or the Minister’s own determination to put a marker down, but at least one of the senior staff members affected had no idea it had happened until some time later in the evening.

Then, just before the PAC was due to meet, rumours began to circulate DRD and NI Water that two others (unnamed by the minister) were also going to be investigated. From what we can discern, and please appreciate we are peering into some very murky waters here, one of these new individuals only received a date for their hearing and a review on Friday (ie, the day after the PAC hearing).

As yet, we have not been able to confirm the names of either of these new individuals… So we would ask commenters to refrain from any irresponsible speculation in that regard until we can confirm the details here, or it emerges elsewhere in the media…

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  • Cynic

    Nice to see Goats being tethered and that the Department is so strong on due process – but how senior are the Goats?

    I assume that at some stage someone must ask how this went on for 3 years and no-one noticed.

  • Mick Fealty

    I should say that we are fairly sure that the head of the stakeholder unit who would have been involved in many of those 82 visits which happened last year is not currently being mentioned as being under investigation.

    Which requires some explanation from the Permanent Secretary, since the Shareholder Unit is responsible for:

    Board appointments and remuneration;
    Business Plans;
    NIW Performance.

    It might be helpful if some industrious journalist on the ground were to press a little further on this, since almost everyone but the stakeholder unit seems to be being held to account for this cock up.

  • Jo

    Indeed Mick 🙂

  • Pigeon Toes

    The timing has a certain whiff of it.

  • Angry from Belfast

    Bloody disgraceful the whole thing. The Perm Sec and Minister should resign immediately, if they don’t they should be forced to go.

  • Looking back: Hilliard Report Strand 2 [on governance et al] 28 January 2008 [pdf file]:

    “We concluded that for as long as NIW remains as a government owned company, the balance of the argument favours the retention of a distinctive Shareholder Unit which will focus sharply on NIW’s financial performance. We would expect it to bring to bear a level of financial scrutiny and discipline which will be more stringent than the Civil Services’ traditional approach to the performance management of NDPBs.” p36/144

  • Just when you thought it couldn’t get more complicated:

    “2.43 We accordingly recommend that a small Business Advisory Panel should be set up which would bring an independent financial and commercial perspective to the Shareholder Unit’s oversight and review of NIW’s performance. The Panel would meet no more than four times a year and would report to the Minister once a year on the Unit’s performance. This would help compensate for the limitations created by the fact that (a) there is only one shareholder in the company, and (b) that shareholder is not an expert in financial and commercial affairs.” p39/144

    ie Use your BAP to keep an eye on a somewhat clueless Shareholder Unit.

  • There’s no accounting for the accounting officers!!

    “22. The Permanent Secretary is personally answerable to the Assembly for the Department’s use of public funds, including money allocated to NIW: he has designated the Chief Executive as the Accounting Officer for NIW, who is answerable for the use of public money within the company.” p133/144

    Fast forward to July 2009:

    “Mr Laurence MacKenzie (Northern Ireland Water): On 27 July, I joined Northern Ireland Water… When I applied for the job, I did not expect to be appointed to the post of accounting officer. By the time that I had taken up the role, however, the company’s reclassification to a non-departmental public body (NDPB) had happened. On my second day in post, Mr Priestly made me aware that he intended to appoint me as accounting officer.” .. p9/115 PAC report

    Why was the AO role not in the job specification?

  • “The Board [of NI Water] is responsible for the appointment of executive directors, and the Department for non-executive directors. Both types of appointment require Ministerial approval.” ..p130/144

    I can find no procedures for suspensions or sackings.

  • Mick Fealty

    One possible reason is that the budget line kicked in between McKenzie having the interview and taking up the post. But it is crucial to note that the creation of the Sub Accounting Officer role (which installed Priestly as McKenzie’s line manager: ie, inside DRD) established a potential conflict of interest which the board went to some lengths to flag up. Something that even the IRT’s deep dive report noted:

    “In a letter dated 4th December to DRD NIW Board made it clear that it accepted the Accounting Officer arrangements on the basis that they were not intended to undermine the role of the CEO and NIW Board and compliance with duties of a director of the Company would take precedence in legal terms over obligations as Accounting Officer.”

    This is a warning which both the Perm Sec and NI Water’s CEO seems to have flagrantly ignored, not least because – despite this official note from the board – McKenzie continued to report directly to Permanent Secretary Priestly, without prior reference to the Chairman of the Board.

    In other words, McKenzie appears to have taken it upon himself to decide that the NDGB rules took precedence over the law which governs the rules of Company House.

    The Sub Accounting Officer role only kicked in when the subsidy from the UK tax base for NI Water (you know, the one none of our politicians have yet mentioned to the electorate) which arose from the Stormont Executive’s general resistance to Water Charges. This then de facto created a subsidy of sufficient size that the GoCo (which remains, even now, amenable to the law governing private companies) accrued the additional (and so far as I can see, conflicting) regulations of a Non Department Government Body (NDGB).

    There is no evidence that the Minister was aware or party to any of this. But I suspect he will face questions as to why he wasn’t. And of course, it says much about the semi-detached polit-bureau’s reluctance to approach any difficult issue from the front.

    So it is, therefore, feasible that McKenzie would not have been aware of such eventuality. But it raises particularly serious questions of the Permanent Secretary when he seems not to have even flagged the possibility to McKenzie at the interview stage.

    More tomorrow…

  • Pigeon Toes

    Wouldn’t there have been a job description to refer to during the recruitment process?

    If the addition of the Accounting Officer role changed the position so significantly, should the DRD have run a new recruitment process?

    Mr McKenzie has stated that he didn’t really now what that particular role entailed!

  • Mick Fealty

    A straightforward and *reasonable* request to the department would get the answer on the timing of this and would get us nearer to answers to those questions. In hindsight, the dual role contributed to a shambles, but there was nothing inevitable about that.

  • Pigeon Toes

    Funny, DRD include, in some of their competitive tendering exercises include under the heading “Information which the operator will be required to provide during the contract period…such information that the Department may *reasonably * require from time to time”

  • Pigeon Toes

    What is the determination of *reasonable”?
    Who defines it?

    It is inn fact a rather subjective term.Yes?

  • William Markfelt

    ‘Then, just before the PAC was due to meet, rumours began to circulate DRD and NI Water that two others (unnamed by the minister) were also going to be investigated. From what we can discern, and please appreciate we are peering into some very murky waters here, one of these new individuals only received a date for their hearing and a review on Friday (ie, the day after the PAC hearing).’

    That all sounds about right. In fact, there appears to be something of a PAC culture to leave little or no time, or little or no opportunity, for victims of various NIA witch hunts to answer, and Maskey repeatedly makes the point (which now is beginning to sound more like a self-motivational mantra) that it is ‘not the purpose of the PAC to query the actions of individuals/companies…etc, etc’.

    What the hell does he imagine are the premises on which all of these PAC kangaroo court hearings are founded, if not for the purpose of establishing the facts behind the ALLEGED motivations or actions of individuals/companies?

    In each of these cases, there are allegations of wrongdoing, never ever proven, or indeed, never ever tried and tested in a court, before a jury of the victim’s peers. Precisely for the reason that none of these witch hunts have foundations built on anything more solid than sand. Yet the PAC now seems to operate on a daily/weekly/monthly basis of ‘disappearing’ individuals and demonstrating a total disregard for due process or those individuals’ human rights.

  • Pigeon Toes

    And would NIW not be a “third party” with regard to the 2009 whistle blowing policy ?
    ” Strictly speaking, complaints or concerns which a member of staff receives from a third party (eg an external source), whether about the Department or any of its individual employees, do not fall within the scope of these internal arrangements. Staff are nevertheless reminded that they have a duty of care to ensure that any such complaint is investigated, particularly if it involves a security or safety issue, and to bring it, in confidence, to the attention of an appropriate senior officer.”
    http://applications.drdni.gov.uk/publications/document.asp?docid=16062

  • “2.31 We believe that these concerns can be resolved through the leadership role of the Minister and through his accountability to the Assembly. As stated above, the Department operates under the direction and control of the Minister. As long as NIW remains in the public sector it will require a sponsoring Department and a senior civil servant to take on the role of Accounting Officer, alongside the Chief Executive as Accounting Officer in NIW. Where there is tension – for example between social and environmental priorities – it is the Minister’s responsibility to reconcile them, in consultation as appropriate with his Executive
    colleagues. The function of the Department is to advise and
    support him.” … Hilliard Report January 2008

    Northern Ireland Water Limited, a Government Company, was created on 1 April 2007 [Great date!!]

    Devolved rule restored May 2007.

    Executive announces privatisation was not an option June 2007 and the Hillyard (sic) review panel appointed by Murphy in June produced its first report on 12 October 2007. Paul Priestly became DRD PS in December 2007 following a spell in the OFMDFM.

    Would this not indicate that NI Water’s CEO was also its accounting officer from 1 April 2007?