HS2 is one project. What happens everywhere else, across the hundreds of councils and public bodies that spend the rest of the £1.23 trillion, is in many ways worse. In the financial year 2022–23, 467 local bodies were required by law to publish audited accounts. Five did so on time, that is………one per cent. At the peak of the backlog, roughly a thousand audits were outstanding, some stretching back to 2017–18. The government’s response was not to enforce the audit requirement. It was to stop trying. Statutory backstop dates were introduced, deadlines after which outstanding audits would simply be closed, regardless of whether anyone had examined the accounts. The backlog was cleared on paper. The accounts were never checked. Where nobody was watching, money disappeared. Funny, that……..
Between 2016 and 2022, Thurrock Council’s director of finance, Sean Clark, invested £655 million of public money in bonds issued by a single businessman operating through a company called the Rockfire Group. Clark borrowed the money short-term from other local authorities and made the investment decisions without informing elected councillors. The businessman, according to the council’s High Court claim, used the proceeds to buy a private jet, a yacht, and a country estate. The losses to the taxpayer are approximately £200 million. The Serious Fraud Office announced an investigation in 2025, into the businessman, now based in Dubai. Clark was barred from practice for five years by the Financial Reporting Council, the UK accounting regulator, which found him “reckless but not dishonest.” Nobody investigated the system that allowed one unelected official to stake £655 million of public money on a single counterparty with no oversight.
When Croydon Council ran up £1.5 billion in debt and declared the local government equivalent of bankruptcy three times, investigators tried to find out what happened. The managing director’s emails had been wiped. The chief executive refused to be interviewed and left with a compensation payout. Three former executive directors quietly found jobs at other councils. One person faced formal sanction across a £1.5 billion collapse and years of concealed overspends. A finance director received a reprimand.
Birmingham City Council declared bankruptcy in September 2023. Behind the headline equal pay liability of up to £760 million lay a second failure. The council had implemented a financial management system, Oracle Cloud Fusion, budgeted at £19 million that reached £216 million by 2026 and still was not working. For approximately eighteen months after it went live, the council had no audit trail for billions in public spending. Problems were buried before reaching decision-makers. A judge-led public inquiry promised in 2023 was quietly dropped. The consequences fell entirely on residents. An 18 per cent council tax rise, £149 million in budget cuts, £750 million in asset sales. Thurrock was fraud. Croydon destroyed the evidence. Birmingham did it in the open for fifteen years. When nobody checks the books, you cannot tell the difference between theft and incompetence, and when there are no consequences either way, the distinction does not matter. These are the cases where something surfaced. Nationally, within what can be measured, the National Audit Office,- the independent body that scrutinises public spending on behalf of Parliament, -estimates fraud and error across public funds at between £55 billion and £81 billion a year. The upper figure exceeds Britain’s entire defence budget. Take that Pootin !!!!! Much of Britain’s political debate is conducted as an argument about revenue, whether to raise taxes, which taxes, on whom. But the sums under discussion in most tax policy debates are smaller than the sums that are already missing. The public services that are visibly deteriorating are not deteriorating because the country cannot afford them. They are deteriorating because the money that should fund them is being extracted, through mismanagement, fraud, and a system designed to ensure nobody is ever held responsible. And the question that’s coming fast down the track is…………………Why should anyone pay more into a system that cannot account for what it already takes, and has shown repeatedly that it will not punish those who steal from it?
There is a reason nobody has been charged. In English law, there is no criminal offence of negligent mismanagement of public funds. Misconduct in public office requires proof of wilful neglect, a bar so high it is almost never cleared when decisions have been routed through committees and boards designed to make individual responsibility untraceable. People have thought of making it a crime. In 1997, the Committee on Standards in Public Life, chaired by Lord Nolan and set up two years earlier to propose standards of conduct for people in public office, recommended a new offence of “misuse of public office” that would explicitly cover “culpable waste of public money.” The public consultation overwhelmingly supported it. The Home Secretary agreed. The Law Commission was tasked with drafting it. It was never enacted. The Home Secretary’s own correspondence described the work as “proving particularly tricky.” The Law Commission later put the project on ice. Nobody picked it up again. For nearly thirty years, through six Prime Ministers, both parties in government, and every scandal described in this article, the law that would make reckless mismanagement of public funds a criminal offence has sat on a shelf, recommended but never passed. Germany has such a law. Section 266 of the Strafgesetzbuch, the German criminal code, criminalises breach of fiduciary duty causing financial loss, without requiring proof of personal enrichment. France has Abus de biens sociaux, the offence of misuse of company assets. Britain has nothing equivalent. In simple terms the people who would need to pass the law are the same people who benefit from its absence. The structure does not make accountability difficult. It makes individual prosecution, in practice, almost impossible.
To be continued/concluded……….
© DJM 2026
