"retired" consultant gets £710 per day for West Ken

Not Nick Johnson

We have our very own Stephen Hestor in these parts, and he isn't about to give up any bonuses. A reader writes in to point out that according to these Council minutes a man called Nick Johnson is being paid £710 per day to advise on the controversial West Ken development, which is opposed by the majority of its residents.

The Council agreed with itself to pay Mr Johnson's company £710 per day for up to 101 days. A total of £71,710.

With defeat over the Hammersmith King Street battle and the prospect of a possible Ken Livingstone victory putting pay to the Shepherd's Bush Market scheme, our Council have revealed their determination not to be blown off course on the £100 million Earls Court/West Ken redevelopment. The problem is that the people who stand to lose their homes don't much fancy it. 

Nick Johnson

So the big guns have been brought out. And this gun's expensive. Mr Johnson, who as I reported here in November 2010, was retired on the grounds of ill health and on the understanding that he was "permanently unfit" to work from the top job at Bexley Council in 2007. He was awarded a gold plated £50,000 per annum pension allowance on top of a £300,000 payout from Bexley when he left.

Within months he was employed by our own Council as a "consultant" on 950 of your pounds a day advising the Council on how to manage their soon to be closed housing division "H&F Homes". The Independent claims that since leaving Bexley Mr Johnson has trousered £830,000 - much of which was made possible by classifying himself as a "consultant" and being paid through a company he set up rather than being on the Council's official payroll. This allowed him to take both his pension from Bexley plus his fees from our own Council. This won our Council a coveted "Rotten Boroughs" award from Private Eye recently.

This led Teresa Pearce MP, whose constituency includes Bexley and who was formerly a senior tax investigator at PricewaterhouseCoopers, to say to the Independent on Sunday that, while the arrangement was legal, "it's not within the spirit of the law, definitely not". She added: "Within a year of him being judged to be in permanently ill health he was pictured in a hard hat, with a spade, digging, in a brochure for H&F Homes – this is just so barefaced that it's insulting. Whatever he is paid for holding that office should go through the payroll and it doesn't. HMRC should investigate this."

He doesn't seem to be doing that great a job however - the company that the Council wishes to hand control of the estate over to is at risk of insolvency with debts outweighing their assets and there are real doubts that it will ever be able to do what it says. This led last week to the story I broke last week of first the whistleblowing, and then the resignation of Richard Osband, a former Director of a pro-development residents committee set up by the Council with £38,000 of our cash to combat the much larger anti development committee the residents had set up for themselves. With none of your cash. 

H&F Council is adamant that Mr Johnson represents good bang for your buck, though, and a spokesperson told me that:

"We want the best people for the best jobs, and Nick Johnson’s record speaks for itself. Mr Johnson has been leading the Earls Court regeneration scheme for several months and has taken a substantial pay cut in order to continue his work with the council until the end of March.

“Earls Court is the biggest regeneration project in Britain other than the Olympic site and the council wants to retain his vast experience and expertise as the scheme progresses.”

None of that cuts any mustard with Opposition Leader Stephen Cowan, who responded to this story by saying:

"Nick Johnson has been working for the Hammersmith and Fulham’s Conservative run Council since 11th February 2008. That was fourteen weeks after he had been allowed to retire early from being the Chief Executive of Bexley Council (aged 54). The reason given for this was he was deemed “permanently unfit to discharge his duties or any comparable duties as defined by the Local Government Pension Scheme regulations”. That decision allowed him to draw his pension early. That year he then also billed Hammersmith and Fulham a staggering £268,405.00. Since then his consultancy fees have totalled a vast sum equivalent to each Borough household being given a 2% council tax cut.

We are in tough economic circumstances. It is outrageous that such large amounts of tax-payers’ money has been handed out in this way. There should be an independent enquiry around all the circumstances with this contract including why this month the Conservative Administration used a waiver of normal contract procurement to keep Mr. Johnson firm on the Council’s books”.

The Council also gave me a list of Mr Johnson's achievements to date, which I reprodcue below. I recognise that this article and others I've written about him are obviously not welcome and on a personal note if someone's doing a good job I don't have a problem with them getting the market rate. But there seem to be more than a few questions about the conditions of his employment, the status of his 'retirement on ill health' and whether the Council should maybe consider listening to the annoying people who don't really want to move out of their homes. 

But here's the list of achievements I was sent nonetheless, pop-pickers:

Nick Johnson’s key achievements to date:

1. Saving the Decent Homes Government Funding

H&F Homes was on the verge of collapse before Mr Johnson took control. The Audit Commission had given the ALMO one star with no prospects. The Decent Homes programme was failing, and over £200 million of government funding to provide new kitchens and bathrooms for all tenants was being recalled by Government. New action teams were formed, and the programme will now be delivered on time. Resident satisfaction with services is now up to highest level ever - 73%.

2. Attaining Audit Commission high rating

Delivered an Audit Commission inspection result of Two Star status with excellent prospects.

3. Delivering Value for Money

Introduced an intensive Value for Money programme that has been able to reduce revenue costs by £6 million per year by restructuring the whole organisation.

If this had not been done rent rises of £6.20 per week for every tenant would have been needed to balance the statutory Housing Revenue Account, which must not go into deficit.

4. Reducing Leasehold charges and arrears

Charges to leaseholders have been reduced in real terms by 15.4% on average, making Hammersmith & Fulham’s service charges now lower than Wandsworth.

5. Cutting the wasteful management hierarchy

A hugely inefficient and expensive top management team of 11 directors has been reduced to 4, with a saving of over £500,000 in top management salaries alone.

6. Personally covering top management vacancies

Mr Johnson covers the work of the Director of Housing and Regeneration, and two Assistant Director roles within the Council, pending recruitment to those positions, working on large regeneration projects, and with Borough resident groups.

7. Planning to reduce back office waste with a proposal to return the ALMO to Council control

Mr Johnson developed the proposal to bring the ALMO back into Council management. This has saved £1million per year and lead to better direct management by the Council.