The Council’s chief executive was alerted to staff concerns about malpractice, corruption and unlawfulness relating to the hiring of consultants ten months before a whistleblowing document forced him to investigate, it emerged last night.

Unanswered questions about the investigation into allegations were put to senior council officers at a committee meeting at Merton Civic centre yesterday evening.

Keir Greenaway, Merton branch secretary for union The GMB, said: "The staff were concerned about the issue of interim staff and made Ged [Curran] aware of that in January 2013 so we want to know what actions were taken when we made the senior staff aware of that."

The scandal surrounds the employment of council officers as "consultants", at a significantly higher rate than permanent staff, for positions which were not advertised externally.

Asked why it took so long for HR to investigate, Dean Shoesmith, head of HR at Merton and Sutton councils, could only respond: "It’s a range of efforts across the council that need some time to gather oursleves together."

Ged Curran, chief executive of Merton Council, said: "We will have to see where we are and to transfer people onto permanent contracts and where, in the areas I outlined, we are really going to struggle."

Mr Curran said he was aware from conversations with council officers at other borough councils there was a shortage of people to fill posts in several areas of council employment, highlighting healthcare.

He said the dominant market for "interim" staff, paid at a higher rate, was likely to be the only way to fill many posts.

Councillors raised concerns about the potential for tax fraud, unequal opportunities and poor value for money where council officers are employed on an interim basis.

HR claimed interim staff were not on their remit, so for this reason they were not responsible for proceedings highlighted by staff in January 2013 and in a whistelblowing document circulated anonymously in November 2013.

Committee members approved recommendations made by Ernst & Young, the independent auditors hired by the council to probe documents and conduct interviews between November 2013 and January 2014.

A report on their findings, published on February 27, 2014, found there was no evidence of corruption, but auditors admitted last night they did not test employment procedures highlighted in the whistleblowing document against the council's code of conduct.


Recommendations made by Ernst & Young:

• Council officers should report all prospective interim positions to HR

• HR should maintain a central database of all roles filled by interim appointments

• HR should challenge departments on employment of long-term interm staff, the rates being paid and ensure external recruitment is considered

• The Council should review its interview process and policy on the number of interviewers required

• The Council’s policy on declarations of interest should be reviewed to include personal friendships

• The Council should review the use of single price quotation forms 

• The Council should commmunicate any changes it makes to employment processes to all council officers