Mayor Dr Nik Johnson said publication of a report into housing loans made at the time James Palmer was mayor “is proof – independently and impartially derived proof – that the organisation I inherited, and the corporate and political leadership I encountered on my arrival, were chaotic and dysfunctional”.
He was speaking to a meeting of the Cambridgeshire and Peterborough Combined Authority overview and scrutiny committee on Wednesday.
Mayor Johnson said the review had been prompted by an email he received on September 23rd, 2021 “the most important email I received in the whole of my term of office” from a local community group Save Wilburton From Overdevelopment and copied to other councillors asking for help.
“Receiving that email, reading it and then deciding that I had to make some enquiries was the beginning of a very turbulent, unpleasant and at time hugely damaging process which would have huge consequences on the rest of my Mayoralty, on the Combined Authority and to myself personally,” he said.
“I knew I had to start the process of asking questions, I do not regret that.”
He said that over the three and a half years that have followed and as more facts have become apparent he remained resolute that when the full facts of what was actually “happening around me here at the CPCA were in the public domain.
“It would be up to the good people and communities of Cambridgeshire and Peterborough to make that judgement on what was right or wrong and what needed to be done to turn the Combined Authority around. Ultimately this is why we are here today.”
Speaking to the audit report he told the committee that “what we have in front of us is clearly very serious – so serious that over the course of the last 3 and half years I have sought support and advice from the police and in particular the Chief Constable for Cambridgeshire Nick Dean.
Mayor Nik Johnson was critical of his predecessor James Palmer and said: ‘Very clearly, what went on back then should not have happened. We all now know that the woefully inadequate governance and deeply questionable choices of the previous administration cast a long and troubling shadow over this organisation’“I want to say thank him for his and his team’s support – their willingness to listen and their advice along the way. I am happy to support them with any further investigations.”
Mayor Johnson said: “Very clearly, what went on back then should not have happened.
“We all now know that the woefully inadequate governance and deeply questionable choices of the previous administration cast a long and troubling shadow over this organisation.
“Less clear is whether such poor-quality management was the result of jaw dropping incompetence or, perhaps more concerningly, a series of intentional acts. We may never know, and for those involved at the time, that’s either an unwelcome cause of suspicion or a most convenient relief.”
He added: “Either way, for me this report and the auditor’s findings are a source of huge solace. For me, this is proof – independently and impartially derived proof – that the organisation I inherited, and the corporate and political leadership I encountered on my arrival, were chaotic and dysfunctional.”
Mayor Johnson was interrupted during his speech by the scrutiny committee chair Cllr Aiden Van de Weyer to be careful about what he was saying and to try and shorten his contribution to the debate.
The Mayor, in conclusion, said what the report revealed showed that “none of this should have happened, and thanks to this administration’s efforts – first via Gordon Mitchell, and now under Rob Bridge, in partnership with a well-intentioned majority of CPCA board members – nothing like this could happen today, nor will it ever happen again”.
As previously reported by CambsNews, the independent audit revealed major governance and oversight failures in the Combined Authority’s housing loans policy.
The concerns primarily relate to loans granted under former Mayor James Palmer’s administration, particularly to Laragh Homes.
Despite commitments, some developments did not deliver affordable homes, and expected profit-sharing agreements were never formalised. The CPCA allocated up to £40 million of its £100 million housing fund to projects that ultimately failed to meet expected standards, prompting government intervention and a halt to further housing funding.
One major controversy surrounded a proposed 115-home development in Wilburton, backed by the Stretham and Wilburton Community Land Trust (SWCLT) and Laragh Homes.
Simon Somerville-Large, (left) managing director and founder of Laragh Homes with Charles Roberts, chair of Stretham and Wilburton CLT. Mr Roberts is a former leader of East Cambridgeshire District Council and former housing advisor to Mayor James PalmerThe audit criticises the lack of documentation and transparency in loan agreements, particularly regarding three major Laragh Homes projects in Ely, Great Abington, and Histon Road, Cambridge. A promised profit-sharing arrangement was mysteriously removed, leading to financial losses for CPCA estimated between £740,000 and £1 million. Poor record-keeping and unexplained decisions contributed to concerns over potential misconduct.
Mayor Dr Nik Johnson asks Chief Constable to probe loans scandal
Cllr Jon Neish criticised the Mayor, telling the committee “that was quite a disgraceful outburst by the current mayor on terms that we’re not discussing in here.
“He seems to have gone way beyond what we’re looking at here which was clearly found to be an issue but not through malice and he seems to have expanded that completely to disrespect the previous Combined Authority and its officers and its mayor.
“It’s a quite a disgrace actually that he’s gone way beyond the remit of what we’re actually here to talk about.”
Other committee members questioned how much could be spoken of in the public session since the main report has not been made public, only a shortened and redacted version.
Cllr Alison Whelan was curious to know why other organisation loaned money by the Combined Authority – a clear reference to East Cambridgeshire District Council’s housing arm – had not been discussed in the public reports at all.
“I’m curious as why they’ve been left out of the consideration because from what I can make out it is exactly the same kind of situation and should have been considered and good or bad should have come out of that,” she said.
Charles Roberts (right) tweeted back in 2018 that it “was a pleasure to show the Housing Minister Kit Malthouse (2nd right) around Stretham CLT earlier this week. He commented upon the fantastic design of the homes and the “entrepreneurial” approach taken by East Cambs Council”. With them is former Mayor James Palmer and former Cllr Tom Hunt, now MP for Ipswich.She added: “I’m not saying we should be naming individuals but there is an awful lot more that could have been taken from the from the private report and put into the public domain and I really think that we ought to be going through that and justifying every word that hasn’t been put into the public domain.”
Cllr Lucius Vellacott said the public report had identified that there was a reporting issue, but he wanted to draw reference to Mayoral decision notices “which obviously have been found but at the time were not reported to the board so that I know is something the Combined Authority has improved significantly”.
Cllr Vellacott also dismissed claims that the Government was critical of the former Mayor’s housing policies, quoting a housing committee report in January 2021 “that the rolling fund for loans and the issuing of loans for affordable housing was acceptable”.
https://twitter.com/lornadupre/status/1899054279488315467
He said amendments to housing agreements do sometimes change and he said the aftermath of Covid was massive.
“But despite a reduction in funds from Government, again a policy decision which was not in the scope of the review, a reduction in funds and an inability to continue the rolling fund the affordable housing programme has continued,” he said.
“And there are people, young people like me, who are living in some of these properties who are incredibly grateful for it and the number of properties were delivered at zero net cost to the public purse in fact subzero cost to the public purse because we charged interest on the loans.”
The committee agreed to ‘note the report’ after hearing that widespread changes to procedures and massive changes had been made.
A report agreed by the committee heard that improvements were already in place following the audit report finding “areas of weaknesses” in decision making and governance.
