Article from ‘Inside Housing’ – Whistleblower claims company swindled hundreds of thousands from social landlords
A building company fiddled hundreds of thousands of pounds from councils and housing associations by paying bribes and deliberately overcharging for repairs, a whistleblower claimed today.
It was claimed Morrison Facilities Services deliberately overcharged for work on 16,000 properties. It is also alleged it charged for work that never took place, duplicated jobs and deliberately carried out sub-standard work.
The company is also accused of paying bribes to senior staff at councils and housing associations to retain repairs contracts, according to the whistleblower.
It was claimed that at one housing association, which controls thousands of properties across Greater London, an estimated £200,000 was skimmed off in ‘enhanced payments’ and paid in backhanders to corrupt employees at the association and pocketed by Nemendra Singh, a director of MFS, and Paul Ryder, the managing director of MFS.
Alan Strong, who was hired as regional commercial manager at the firm in May 2012, told an employment tribunal he was fired after raising the allegations with MFS senior management. He now claims he has been blacklisted by the construction industry.
In a written statement to the London Central Employment Tribunal he said: ‘MFS regularly made commercial claims for payment for work they had either not carried out (claims for repair works requested but not carried out)… or not completed the work (claims for the complete value of work, that had been started but not completed), or not actually done any work at all (work that had neither been requested or authorised, and had never been undertaken), or of a low or poor standard (as indicated by post-inspections), or overclaiming by quantity or price, or duplication (claiming for the same works more than on one occasion).’
He continued: ‘I would estimate that the overclaiming covered at least 100,000 to 160,000 properties over most, if not all of the clients. These practices were such common practice within MFS that I felt uncomfortable raising them as issues of incorrect practice, especially as I had only been with the company a short time.’
MFS had contracts with Southwark Council, Thurrock Council, Havering Council, Kensington and Chelsea Tenant Management Organisation, Lambeth Council, Gateway, One Housing Group, Woking Council, Hackney Council and Paragon Community Housing Group, among others.
Mr Strong said: ‘In addition there were allegations of money exchanging hands for the allocation of works… in that the enhanced payments being made to the sub-contractor were being paid out to the employees involved at One Housing Group and MFS. These payments I understand were being made in cash.
‘Over the period I was able to investigate, I would estimate that this was in the region of £200,000 on the cyclical works of One Housing Group during 2011 and 2012.’
He said he was tipped off by contacts at One Housing Group, adding: ‘I do not believe these actions were isolated to either just One Housing Group or this one element of One Housing Group works.’
Mr Strong alleged he went to Mr Singh, who was appointed a director of Mears, which bought MFS in 2012, and Mr Ryder individually to discuss the allegations on 24 October 2012.
Mr Strong said: ‘I felt it was my obligation to them, to first speak to them about the allegations, fully expecting them to instigate the required investigations to prove their innocence and thereby disprove the allegations.’
Instead, both Mr Ryder and Mr Singh denied any conversation took place.
After raising the issues, Mr Stong was sidelined and put in an ‘out of the way’ office in Thurrock, where all responsibility for managing and negotiating contracts was removed and he was left to do ‘menial tasks’.
Mr Strong, who is claiming breach of contract, public interest disclosure and unfair dismissal, left the firm in January 2013 and claims he has since been blacklisted in the construction business, making it impossible to find work.
During legal discussion in the tribunal, it emerged that Mr Strong was burgled last week and computers and hard drives were stolen.
The ‘professional’ theft took place just days before the whistleblower was supposed to give evidence at a hearing where he made the claim of corruption, bribery and fraud.
Alex Monaco, acting for Mr Strong, told tribunal judge Jack Taylor: ‘Last week on the day my client was due to sign his witness statement, he was burgled at his home. Laptops and hard drives were stolen.’
Outside court, Mr Monaco said: ‘There were two laptops, one iPad and seven hard drives taken. A windowpane was removed using a special tool. There was a digital SLR on the shelf in the room that was untouched. Jewellery was left untouched, TVs left and nothing else was taken. The police said it was a “professional job”.’
There was no suggestion the burglary and tribunal proceedings are linked.
The tribunal continues.
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