'No wrong-doing' council broke EU law
By Ed Davey 25 November 2010
BBC News, London
Council faces EU parking inquiry
A council has been censured by the European Commission for infringing contract laws - and criticised for earlier claiming in a press release it had been "cleared of any wrong-doing".
Westminster Council was the subject of an EU investigation after setting up Partners in Parking (PiP), which allowed local authorities to join forces to purchase cheap parking services.
Westminster was found to have infringed EU law
Transport for London and six local authorities in the city joined when it first started, hoping for a better deal from private parking enforcement firms.
Canadian company Verrus was awarded the contract to provide pay-and-display services, pay-by-phone, parking tickets and debt collection to the members.
Additional local authorities were then persuaded by Westminster City Council to join PiP but these contracts under European Union rules should have gone back out to tender rather than being passed automatically to Verrus.
This move prompted an investigation by the European Union after an un-named parking company complained about the process and the failure to put subsequent contracts out to tender.
But on 8 November Westminster Council released a statement saying an investigation by the European Commission into its parking contract "has cleared the authority of any wrongdoing".
Councillor Lee Rowley, Westminster's parking boss, said at the time: "We always maintained this contract was properly awarded following a tender process carried out in accordance with the law and we are obviously pleased that the EU has decided to close this case."
But BBC London has obtained documents showing the Commission found against Westminster Council and that it was ordered to make changes.
'Infringed EU law'
In an written statement it said: "The Commission considered that Westminster City Council has infringed EU law.
"The United Kingdom authorities recognised the Commission's allegations and committed to take appropriate and adequate measures for the purpose of terminating the infringement."
This statement was obtained by Gerard Batten, a Member of the European Parliament and also of UKIP.
Gerard Batten MEP said Westminster's press release was 'simply not true' He said: "The press release Westminster sent out is simply not true.
"They have not been cleared of any wrong-doing.
"They certainly were not let off scot-free."
He said he was not surprised the authority had put out "such a silly statement".
In light of the revelations, the BBC has learned some councils are considering withdrawing from PiP.
A head of parking at one of the PiP councils, speaking to the BBC on condition of anonymity, said: "The whole issue of legal capability has to be explained.
"I had the press release saying everything was in the clear.
"Then I received other information - now I am trying to ask how these things relate."
Asked if the council would now withdraw from PiP, the officer said: "Whether it is a deal-breaker I don't think we can say until they respond."
Westminster Council's initial claims followed an exchange of emails with the Office for Governmental Commerce (OGC), which dealt with the EU over the issue.
"Our earlier statement did not intend to mislead anyone”
Cllr Lee Rowley
Westminster Council
The OGC says it does not comment on individual cases but the BBC understands the OGC is privately adamant that Westminster's press release was inaccurate and the council should not have based its claims on their emails.
On Wednesday Cllr Rowley said: "Our assertion that we had been cleared of any wrong-doing was based on the fact the OGC had said that the Commission had closed the case.
"It was also based on the EU saying there had been a satisfactory outcome to its investigation.
"Our earlier statement did not intend to mislead anyone and it's important to note that there was no punitive action taken against the council."
PiP once had ambitions to go nationwide.
The minutes of its December 2009 board meeting read: "The board received a report to consider the recommendation enable non-London authorities to join PiP.
Expansion plans dropped
"An Associate Membership would be created in order to enable UK authorities outside London to take advantage of PiP procurements."
A PiP report from 2009 described Bristol, Maidstone, Swindon, Portsmouth, Birmingham, Chiltern and Oxford as having a "potential interest" in joining.
One PiP report referred to the "harmonisation" of a Westminster policy to charge motorcyclists for parking, promising to "review national policy context".
Bristol City Council was one of several authorities nationwide interested in PiP But Bristol Council raised concerns about PiP with regard to the legality of authorities outside London joining the organisation.
After the EU investigation began, expansion beyond London was shelved.
Westminster Council, which insists the EU probe did not affect the plans' termination, has since dismissed claims of national ambitions.
In July 2010 the then PiP chairman, Alastair Gilchrist, who is now strategic director of resources at Westminster Council, told other members: "Concerns about PiP's nationwide expansion are ill-conceived and regional savings are still at the heart of PiP's focus."
The EU's ruling means that only the seven authorities which first joined PiP - Westminster, the City of London, Kensington and Chelsea, Lambeth, Islington, Camden and Transport for London - may continue to use the Verrus contract.
An OGC advisory in light of the ruling suggests councils who subsequently joined PiP may be said to have made an "illegal award" of the contract to Verrus, if they used the company.
There is no suggestion of any wrong-doing by Verrus.
Enfield, Richmond, Hackney, Tower Hamlets, Havering and Croydon joined PiP after its start date.
The BBC understands at least one of those authorities, Tower Hamlets, is now actively seeking to award a new contract.
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