2. The issue of corruption within Lambeth Council was considered by Elizabeth Appleby QC in a report commissioned by Lambeth Council and eventually published in 1995 (the Appleby report).
2.1. The Appleby report considered the district auditor’s reports and documented the chaos of Lambeth Council’s financial position from 1979.[1]
2.2. It described the involvement of Lambeth Council’s staff in fraud and corruption, and the Council’s tolerance of it. In 1993, it seemed that there could be as many as 400–500 employees engaged in benefit fraud (related to housing benefit or income support) against Lambeth Council.[2] Staff known to have been involved in the fraudulent claiming of benefits remained employed.
2.3. Lambeth Council’s policies and actions from the 1980s to the early 1990s were said to have created the perfect conditions for systemic abuse by dishonest employees, dishonest members of the public and dishonest contractors.[3]
2.4. It also discussed that “in the eighties and early nineties (1991/92) Lambeth operated an unwritten policy not to collect its rates and taxes and not to collect rent and the failure to collect continues”.[4] Political opposition to rate capping resulted in the refusal by around 30 Labour Party councillors to set a council tax rate in 1986. These elected members were required, by the district auditor, to pay for the losses that accrued from this failure. They were also disqualified from their positions as councillors.[5] This had an immediate and far-reaching effect on Lambeth. Disqualified councillors were replaced by councillors who, with the exception of three, had no former experience in local government. Collection difficulties persisted. In 1993, on the introduction of the council tax, Lambeth Council should have collected £65.5m – it collected only 10 percent of what was owed.[6]
2.5. In short, the Appleby report concluded that Lambeth Council was in “an appalling mess”. Vast amounts of funds were wasted. It had been unable or unwilling to translate plans and ambition into positive action. It stated that it would be surprising if any directorate was free of mismanagement. The report concluded that the 1980s had created a “‘culture’ in which Lambeth is trapped”. The mismanagement of Lambeth had “merely grown and grown”.[7]
3. Ms Anna Tapsell was an elected councillor between 1990 and 1998 (and chair of the Social Services Committee for part of this period), having previously been employed between 1978 and 1989 as a home care organiser, a trade union official and chair of the Lambeth branch of the National and Local Government Officers’ Association (NALGO) during the 1980s. She described everyday corruption within Lambeth Council, which was deployed to obtain leverage. For example, employees in children’s homes were coerced into accepting food donated to children’s homes for children “because they were persuaded that was the norm”. Once accepted, the employee was compromised.[8] Ms Tapsell also explained that members of Lambeth Council’s Direct Labour Organisation obtained leverage by offering elected members free labour, such as repairs. If a councillor accepted, they were compromised.[9]
4. This corruption impacted directly upon the safety of children. For example, there were serious concerns that an initial investigation into the sexual abuse of children at Ivy House was tainted by fraud. Mr Thomas, in his role as children’s home officer, was appointed to investigate an allegation of sexual abuse made by LA-A26 against LA-F12 (assistant officer in charge at Ivy House). The officer in charge of Ivy House was suspected of involvement in a food fraud, together with Mr Thomas.[10] In 1987, in discussions with the Social Services Inspectorate (SSI), Mr Robin Osmond (director of social services 1977 to April 1988[11]) admitted that Mr Thomas’ investigation of abuse at Ivy House had been superficial and unsatisfactory and that the officer in charge at Ivy House being part of the food fraud did point to collusion.[12]
5. Mr Thomas also presented the case against Michael John Carroll (the officer in charge of Angell Road children’s home from 1981 to 1991) at a misconduct hearing in 1986 (see Part D). Prior to this, in 1984, an anonymous written allegation was made against Carroll by someone who described him as an autocrat, more suited to bringing up boys in the army than caring for young children. It also said that Carroll regarded everything in the home as his own, such as the minibus, which should have been used by staff to bring children to school.[13] That letter was not referred to in the misconduct proceedings, and Carroll was not dismissed until 1991 for fraud, having spent funds intended for the purchase of items such as groceries for children at Angell Road on cigarettes and alcohol. There were also irregularities about overtime and ‘sleeping-in’ claims.[14] It appears that the SSI was informed that the police had declined to investigate Carroll for fraud against Lambeth Council, which was “consistent with Lambeth local practice involving theft against an employer”.[15] In fact, Carroll’s involvement in fraud had not been referred to the police; the Clough report recorded that the police were not informed on the basis that they would not be interested in “fraudulent use of petty cash”.[16] Lambeth Council officers (including David Pope, the director of social services from 1988 to 1995) similarly failed, until 1992, to notify the Department of Health about Carroll’s dismissal for fraud so that it could consider barring Carroll from working with children or recording that he had been dismissed for fraud. The SSI queried whether it was the view of Lambeth Council staff that “embezzlers and con people are the sorts of people we want to look after children in the public care”.[17]