Charities (Hansard, 9 February 2000)

§ Helen Jones (Warrington, North)

I am grateful for the opportunity to raise the problems of Integrate Services, a charity that cares for people in Warrington with learning difficulties.

The history of the charity is complex, so I do not propose to go through all of it tonight. It has been set out clearly in an extremely helpful report, produced for the local health authority by Mrs. Glenys Marriott. However, it may help the House if I point out that Integrate Services, formerly known as Warrington Integrate, was originally set up to care for people from the old Newchurch hospital. It currently cares for about 23 residents—the number fluctuates—in eight homes in Warrington.

The charity is not, and never has been, a fund-raising body. It is entirely dependent on public money, mainly a section 64 grant from the health authority, together with social services benefits due to residents and a small amount of other income.

The difficulties surrounding the charity began to surface last year when a member of staff approached the Warrington Community Health Care trust. It immediately contacted the North Cheshire health authority which believed that the allegations were serious enough to warrant an investigation. It therefore contacted both the trustees of Integrate and the Charity Commission in May last year. The Charity Commission, however, did not begin its section 8 investigation until September and that investigation is still incomplete. I believe that the delays to which it has been subject have formed a major problem and prevented the resolution of many of the problems facing the charity.

As the number of staff expressing concerns began to increase, arrangements were made for them to make statements to solicitors under the Public Interest Disclosure Act 1998. The allegations were many, including that staffing levels at the charity were tightly controlled on financial grounds and did not change as residents' needs changed and that staffing was, in any case, too low. For example, if a resident had to attend a medical appointment, others in the home had to go with him.

Allegations were made that the chief executive and his wife, who was also employed by the charity, spent very little time in Warrington and that they claimed payments to which they were not entitled. Further allegations surrounded the use of the charity's money to fund holiday provision and the effect that that had on provision for residents. There were allegations, for example, that residents had to wear old clothes, that they were bought only the cheapest food and that they were forced to take their holidays in Integrate's holiday facilities.

The important thing is that many of those allegations have never been properly and fully investigated because the response of the trustees at the charity was, I regret to say, rather bizarre. They first commissioned two of their own number to produce a report—they were apparently oblivious of the principle that organisations do not normally investigate themselves.

378 The trustees' members produced a report based largely on uncorroborated statements from the chief executive. The charity still refers to that as an independent report, which I can describe only as a terminological inexactitude. It then failed to agree with the health authority on nominating an independent person acceptable to both to carry out a full investigation, and it spent a great deal of money instructing solicitors in order, I believe, to avoid an investigation.

Under pressure, however, the trustees commissioned two further reports—one from PricewaterhouseCoopers and another from Mr. Frank Watts. Copies of these—the charity's own reports—have been passed to me, and I shall refer to them later. However, the trustees refused, despite repeated requests from the health authority, to suspend the chief executive who was at the centre of many of the allegations. The decision not to suspend him was taken by a meeting of trustees at which the chief executive, his wife and Mr. Colin Fiveash, who was briefly engaged as a consultant to Integrate even though he had been dismissed from his previous post in the health service for gross misconduct, were all present. The fact that Mr. Fiveash was even employed says much about the charity.

However, before that, the chief executive had been unofficially suspended for one day. On his return, it is alleged that he broke into the charity's office and removed a large quantity of files and papers. The Charity Commission has confirmed to me that the chief executive accepts that he took away files and papers, but he says that it was for safekeeping and that he returned them later except for a few personal items. I have yet to discover why anyone would need to remove things for safekeeping when they were in a locked office or what corroborating evidence there is to show that they were all returned.

The chief executive's treatment contrasts strongly with the treatment meted out to whistleblowers at the charity. That seems to follow a pattern. Staff who blew the whistle were accused of various offences, including serious ones such as the abuse of residents and theft, despite the fact that no allegations had been made against them before they made statements about the charity. I have checked with social services in Warrington because they are serious allegations that need to be properly investigated, and they tell me that not one allegation of abuse or even improper behaviour has been proven against any of the whistleblowers at the charity. Letters from the charity, however, continue to repeat those allegations as if they were proven.

I have been passed a copy of a letter from the chief executive to the Charity Commission dated 18 January, in which he refers to allegations against a particular member of staff as being proven. The secretary of the trustees wrote to me on 31 January in similar terms. One must ask why the charity repeats those allegations. It seems to me that there was a pattern of bullying and intimidation at the charity against anyone who spoke out.

I have been contacted not only by current and recent staff, whistleblowers and non-whistleblowers, but by people who worked at Integrate some time ago, left before the allegations surfaced and now hold responsible positions elsewhere. They have confirmed to me their view that anyone who crossed the chief executive was likely to be subject to a similar campaign. Frankly, they are terrified of that man, Mr. Trevor Upshall. I do not use the word "terrified" lightly, and I did not choose to name 379 him in the House without careful thought, but it is the duty of Members of Parliament at least to bring such allegations into the public domain to offer some protection to those who are subject to them.

The failure to suspend the chief executive means that both reports produced for the charity are necessarily incomplete because many members of staff would not speak to the investigators while the chief executive remained in post or allow the statements made under the Public Interest Disclosure Act to be revealed to him. The investigators were also circumscribed by the brief given to them by the charity, yet their reports highlight issues of major concern.

The PricewaterhouseCoopers report makes it clear beyond doubt that there was consistent underspending on Integrate's budget year on year to build up reserves. That money had been given for the care of residents—that was its sole purpose. Yet according to the accountants, on 31 March 1999 the charity had cash at bank of £428,364, which far exceeded three months' running costs of approximately £169,000. The accountants who prepared the report questioned the need for having three months' reserves at all, since the health authority paid its grant to the charity in advance. However, that underspending is part of a pattern: in 1998–99, there was £80,923 left; in 1997–98, £214,664 was left.

The purpose of the reserves was clear. They were used to purchase holiday facilities and associated items. A cottage in Oswestry was purchased, as was a caravan, a barge and a Land Rover. Why a Land Rover? According to the charity's own reports, it was kept in Oswestry, where the charity's handyman was based, although all the charity's homes were in Warrington.

There were national lottery grants, which may now be subject to scrutiny, to refurbish the cottage and purchase what was described as a "trip boat". Other strange purchases were made, such as a massage couch, which it was alleged was kept at Mr. and Mrs. Upshall's home, and now appears to be at the holiday cottage, but is certainly nowhere near the residents.

There is clear evidence in the reports that the policy resulted from a decision of the management committee to set up what it described as a "holiday arm", and it changed the charity's objects to facilitate that. The management committee did so without notice to the health authority that funded the charity.

It has been alleged that residents were forced to take their holidays in those facilities, but it is remarkable how little the residents used them, according to the report. In 1999, the cottage was used by the residents for precisely eight weeks. On other occasions it was let to other bookings. The trip boat was used on two or possibly six occasions by residents. That is difficult to determine, because of the way in which the records were kept.

It is clear from the report that members of the management committee feared a process of attrition as residents grew older and no more were placed with them, so they deliberately used public money to acquire holiday facilities which their own accountants say were beyond those needed for residents and which Mr. Watts says "far exceed" what is reasonable. The whole purpose of the charity became the perpetuation of its own existence. Since when has that been a charitable object?

380 The question arises whether the beneficiaries suffered. It seems that, in some senses, they did. Mr. Watts's report states that Integrate's income suggests the expectation of a substantially greater level of staffing than he found at the charity.

Advocates now working with the residents to facilitate the changeover to a new provider have come up with some heart-rending stories. For instance, they have heard residents say that they wished they were back in Newchurch, because they were allowed day trips from there. They have heard residents say that they were not allowed certain foods, and that when Integrate's residents went to day centres, they had to take packed lunches, whereas everyone else had a cooked meal.

However, Mr. Upshall stated in a letter to the health authority in December 1997, and he also told me just after I was elected, that he had had to reduce cover and services to residents because the grants from the health authority had been frozen.

In a letter to staff dated 4 February this year, Mr. Upshall mentions having dealt with a member of staff who had been on duty for 24 hours. Why should that be, when the charity had built up such reserves? Why should decent staff have had to work in such conditions, when Integrate had consistently underspent its staffing budget?

While the residents lost out and staff were left to cope, the chief executive and his wife enjoyed unusually favourable terms of employment. They live in Oswestry where, by coincidence, we also find the cottage, the Land Rover, the handyman and, of course, the massage couch. A decision was taken by the trustees to use part of their property as an office base and to allow them to have their work base in Oswestry, meaning that they could claim mileage and on-call payments from Oswestry to Warrington.

Mr. Watts reports that the alleged savings from that were never quantified, nor it is clear what alternatives were considered. The arrangement was allowed, despite the fact that all letters from the charity are addressed from Lyster close, which is in my constituency, and where I know there is an office as I have been in it.

Mr. Watts also states that it is unusual for a senior officer of a charity not to be located locally and to receive on-call payments at all. He states in his report that it is difficult to see the justification for Mr. Upshall being on call, as the on-call rota for the homes was covered by the team leaders. He finds it even more difficult to see the justification for Mrs. Upshall being on the on-call rota, and that her job description seems to have been written specifically for her.

The payments that those two senior officers received were considerable. Payroll details passed to the health authority and to me cover five months from late 1998 to 1999. During that period Mr. Upshall received £13,182 net in salary and £10,398 in additional allowances, including a payment of £1,820 for what are described as "extra hours"—an unusual payment to a chief executive—and £3,203, described as holiday pay.

In the same period, Mrs. Upshaw, whose pay per hour was almost double that of other team leaders at the charity, received a salary of £11,674 and £6,575 in extra payments, which included an extra-hours payment of 381 £1,612 and more than £300 in holiday pay. I am a simple soul, and I do not know what holiday payments mean in the context that we are considering. It is difficult to understand how someone can receive holiday pay and on-call payments simultaneously. The health authority estimated that to earn his extra-hours payments for one month, Mr. Upshaw would have had to work 212 hours in addition to his usual 150 hours. Clearly, a superman was running the charity.

The health authority has decided to end its grant to the organisation on 31 March and to transfer to a new provider. However, lessons need to be learned, and I regret that the trustees have not learned them. A copy of the letter that the trustees sent to their solicitors was recently passed to me. In it, they asked for advice on how to exclude the health authority from discussions with the new provider, especially when we will be discussing such points as TUPE and also our assets. Is the organisation anxious for a smooth transfer for the benefit of its residents or concerned to preserve its assets? I suggest the latter. That is confirmed by a letter from the new chairman of trustees to the health authority. It states:

Our current strategy is to retain the organisation's non-staff assets and, subject to the consent of the Charity Commissioners, to use those assets as the basis for developing leisure-based services for disabled people. The charity intends to set up a separate leisure organisation, using the assets that were bought with money given for the care of people in Warrington. The legal position can be debated, but the moral position is clear. The money was given for the care of a specific group of people, who should benefit from the assets. Anything else is a form of legalised asset stripping of some of the most vulnerable people in our society. It is monstrous that any charity would consider behaving in that way.

I hope that my right hon. Friend the Minister will consult his legal advisers about whether the process that I have described can be stopped before we get into a long round of legal debate, which will use up more money that should be spent on care.

I also hope that we will learn lessons from what has happened. The Charity Commissioners or social services need powers to intervene in an organisation when its management goes wrong before matters get to the stage that we are considering. There should be clearer powers of investigation when the governance of a charity is at fault. Social services can intervene only when there is danger to residents, not when they know that a problem might arise in future.

More thought should be given to training management committees. Clearly, many trustees did not understand what a section 64 grant was, their responsibilities to their employees or even the functions of different parts of the health service. We should consider carefully giving advice to trusts on the contracts that they ought to make.

Many of the schemes that I have mentioned were set up so quickly that we have never fully explored the interaction between section 64 grants and charity law. There should be clear contracts that require agreements on surpluses, properly agreed development plans, and notification of the health authority of any change in a charity's objectives.

382 I hope that we will seriously consider insisting on a form of independent advocacy for residents in schemes such as those operated by Integrate Services. Their residents were the most vulnerable of the vulnerable and there was no independent person to speak to them.

However, none of that would have stopped some of the trustee's actions, the purchase of holiday homes or the chief executive's remuneration package so they and the charity's management must bear a great part of the blame for what went on. I sincerely hope that the Departments concerned will look very closely at this operation and that, if another organisation is set up by the same people, they will think clearly about their advice to health and social services on whether to use such facilities. It is the duty of Members of the House to make sure that this does not happen again.