Tory chief accused in school meals scandal
Leeds Other Paper (27/4/89)
A TORY COUNCIL leader improperly encouraged two officers to take over Bradford school meals in a desperate attempt to privatise the service. Tory deputy leader Richard Wightman personally encouraged council officers to make a management buy-out bid for school meals in the city. He did so knowing that they had alreadv been asked to prepare an in-house bid for the service. He was fully aware of the potential for a scandalous conflict of interests.
Bradford West MP Max Madden is to refer these revelations to the Director of Public Prosecutions. The MP described the allegations against Councillor Wiqhtman as "alarming and very serious", calling Wightman's behaviour "extraordinary, unusual and raising important questions of ethics for a councillor in his position".
WELL PLACED City Hall sources have revealed that Coun Wightman - strongly tipped to replace Eric Pickles as Tory leader - lobbied two senior council catering officers, Mike Howat and Derek Halliday to organise a management buy-out in December 1988. This meant setting up their own company and taking over Bradford's school meals service as a private concern.
The approach took place immediately after a council committee meeting - chaired by Richard Wightman - which had asked the same two officers to draw up an in-house bid, under competitive tendering procedure, on behalf of the council workforce itself.
Plans for a management buyout remained secret while Howat and Halliday worked on the in-house bid. They failed to formally declare their interest in the school meals service until March 17th 1989, the closing date for tenders. Despite approaching them initially, Wightman did nothing to stop this conflict of interests.
The two officers were assisted in their buy-out attempt by London based consultants Capita Ltd. Capita had conducted a private seminar with senior Tories Eric Pickles and Coun Richard Wightman in Bradford City Hall.
The Tory leadership knew at an early stage that no private companies were interested in taking over the school meals service. They were concerned that this first city service to go out to tender would be won by the council workforce because of a lack of competition. Capita suggested a management buy-out as an alternative.
At the seminar, it was suggested that Capita approach catering managers Howat and Halliday. Two weeks later Coun Wightman made his approach to the two officers after the committee meeting which ordered them to make the in-house bid.
When asked by Leeds Other Paper if he could confirm these approaches, Richard Wightman said: "No I can't confirm that at all. Such an approach would have been improper". He called the allegations slanderous.
A secret meeting was arranged between Howat, Halliday and Capita at Bingley's plush Bankfield Hotel. The officers agreed to set up their own private company and attempt to buy out the service.
According to council rules the two officers should then have declared a private interest and withdrawn from preparing the in-house bid. Official council documents indicate they failed to formerly declare this clash of interests until March 7th, the closing date for the tender bids. When this became public knowledge, Labour councillors made allegations of corruption.
However, a signed statement in the possession of Leeds Other Paper indicates that Howat and Halliday told senior officers of their private buy-out plans as early as February 1989.
The statement reads: "When the two of us made our decision to formulate an MBO bid, we immediately informed the council in early February 1989 of our intentions, both verbally and followed up by letters from our professional advisers. This action was taken for reasons of probity and occured well in advance of the preparation and submission of the in-house bid".
The verbal declarations were made to senior council officers. But Education Assistant Director Ken Sutcliffe denies he was informed at the time. Sutcliffe said: "I wouldn't say that was true. I can't say that I haven't heard people discussing management buy-outs, because that would be unreasonable. I was informed on, I think, about the 17th March. The two officers never told me what happened prior to that date."
The statement made by the two officers continues: "Whilst putting together the in-house bid, as employees acting on behalf of the council, we were not asked to cease working on the bid, nor were we given any instructions to do so. In fact, to have not submitted an in-house bid would have meant, as we understand it, that the whole competitive tendering process would have had to be repeated again which would not have been in the interests of the council, the workforce, the customers or the ratepayers".
Trevor Finch of the union GMB confirmed that Howat and Halliday first mentioned the possibility of an MBO to him on February 9 1989. Mr Finch said: "Halliday and Howat had a meeting with me and John Clarke of NUPE. They asked how we would feel about a management buy-out. I said I wanted an in-house bid, but failing that I would prefer an MBO to some outside contractor like Trust House Forte getting it."
Mr Finch acknowledged that the two officers failed to tell him that no other private contractors were bidding. He said: "The two lads said that a letter of intent to pursue an MBO would be sent to the council". A letter was sent from Capita to Tory leader Eric Pickles marked 'private and confidential'. The letter did not mention the two officers by name.
Richard Wightman encouraged the two officers to make their bid. The Tory leadership was well aware of the progress of the MBO plans. As Tory chief in charge of privatisation it was his duty to ensure that no clash of interests or impropriety took place. He failed to ensure this.
Labour education spokesman John Ryan said: "If this is true, it serves to confirm what the Labour Group has suspected all along, that the Tory Group were behind the MBO. We redouble our demand for a full inquiry into the whole matter."