Part 2: East Kent Councils overcharged £1.5 million by Gas Contractor P & R.


We said way back in May 2018, fraud was happening on the Gas Contract. Now it comes to light P & R have been charging the four owners of EKH fraudently to the sum of £1,479,000.  P & R, the contractor responsible for the Gas Servicing & Maintenance contract for all four East Kent Council, managed by East Kent Housing has repaid £530,000 but nearly a million (£949,000) remains in dispute between P & R and the Councils of Canterbury, Dover, Folkestone & Hythe and Thanet.

We believe the overcharging was a systemic fraud; and a deliberate one at that. We are sure that if the councils investigate further, the facts will bear this out.

Gas safety issues at East Kent Housing (EKH) (first reported by us); which manages around 17,000 homes on behalf of Canterbury, Dover, Thanet, and Folkestone & Hythe councils – emerged in early April 2019.

Hundreds of gas safety checks were not done in the time required by law after the breakdown of a contract with heating maintenance firm P&R Installations Company in early April.

An officer’s report that went before Thanet District Council’s cabinet on Thursday said that an internal audit of EKH’s contract with P&R in October “revealed significant weaknesses” on the ALMO’s part.

A further review of the contract by Gas Contract Services identified EKH’s “failure to identify overcharging by P&R for works completed and instances where works have been completed but adequate paperwork [was] not provided”, the report added.

It said there were three overpayments – one of £530,000, which was accepted by P&R, and two worth a combined £949,000, which the contractor disputes.

The councils are now seeking legal advice on “whether the overcharging would constitute fraud”.

The report added: “This process may lead to formal legal or criminal action or independent arbitration, depending upon the advice and the strength of the evidence upon detailed examination.”

Meanwhile, the council said £530,000 has not been “fully recovered”, and P&R has “asserted that there are amounts outstanding and written to all four councils demanding payment for sums that do not appear to have been invoiced”.

A report by Thanet Council’s monitoring officer said failing to have up-to-date gas safety certificates in place could be a criminal offence under the Health and Safety at Work Act 1974, but that the Health and Safety Executive “have not indicated whether they intend to undertake a full investigation”.

In a letter sent to the Regulator of Social Housing by Thanet in June, the council’s chief executive said that during the contract notice period P&R “failed to meet their contractual obligations” to carry out the checks.

An ongoing investigation by the East Kent Internal Audit Partnership has uncovered signs of wider issues at EKH, including fire, lift, electrical and legionella safety.

Thanet Council’s cabinet is expected to follow Canterbury City Council, Dover District Council & Folkestone & Hythe District Council and approve a “detailed options appraisal” of its future housing management structure, including closing down EKH.

In the meantime, officers are investigating the health and safety processes at EKH and their findings will help the councils decide whether to replace its management or strip the ALMO of some responsibilities.

We understand Swale Heating were awarded an interim contract (July to Nov), via a waiver (by passing normal tendering processes) for more than half a million pounds. This is to ensure a contractor is in place when P & R’s contract ends on July 3rd.

A permanent gas contractor will NOT start until November. Lets hope neither they, or Swale, get up to any shenanigans by overcharging our council.

Finally, what this demonstrates is neither EKH or the four Councils have the capacity or ability to spot fraud. Given the fact, that the finance officer at EKH and the four s151 officers (the persons responsible for the councils money), plus all the finance personnel did not see the fraud, demonstrates that they either choose to ignore it, or they didn’t spot it. If the latter is the case, how much more fraud is happening at the four councils and EKH? We’ll leave you to ponder that.

The Shepwayvox Team

Dissent is NOT a Crime


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6 Comments on Part 2: East Kent Councils overcharged £1.5 million by Gas Contractor P & R.

  1. Their woes are only just beginning. Congratulations on your investigative work and to those brave employees who have been in contact with you.

  2. At Circle Housing when Deborah Upton worked there, the sum overcharged was many times the £173,000 reported in the press. Those close to the investigation in 2015 say it was as high as £4 million. So £1.5 million on Upton’s watch doesn’t surprise me.

  3. A Medway Council Employee // July 30, 2019 at 13:48 // Reply

    The problem is the Social Housing world is a small place and most people know most people. Hence she’ll leave and potentially get another job elsewhere. If not, I’m sure her husband Neil Davies, Chief Exec of Medway Council, will welcome her back with open arms.

  4. Maybe2morrow // July 31, 2019 at 09:17 // Reply

    You have to ask yourself where we’re the auditors when it was going wrong? Surely there is a role for each council to manage EKH as a supplier/contractor and have proper controls and monitoring in place that are all able to be audited? EKH have failed but so have the councils.

  5. I think the last point is very valid. One has to ask all the Council officials/Councillors as well as Deborah Upton and her senior management team the “Watergate question” which is “What did you know and when did you know it?”

  6. What really needs to be established is who within each Council was responsible for the management of the contract(s) outsourcing housing management to East Kent Housing. DLA Piper Solicitors have produced 2 useful guides which local Councillors may find useful when they next discuss this sorry saga with the senior managers involved.

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