Financial probe criticises monitoring of regeneration schemes

The Greater London Authority could see its £80m budget cut back as part of a probe into the way regeneration grants were awarded.

An interim report from the Mayor’s forensic audit committee said “efficiency savings” could be made on the GLA’s budget, particularly the £4.7m spent on consultants.

It also said the panel would look at “potential rationalization” of functions duplicated within the GLA’s groups and in money handed out by London’s grant giving bodies.

The investigation was sparked by allegations of impropriety in several projects funded by the London Development Agency. Four projects are being examined by the police while investigations into a further two have been dropped.

The LDA has commissioned laws firm DLA to investigate 25 organisations which received funding for 60 projects.

The interim report said the LDA “has been historically an organisation where success was measured by money out rather than objectively observed results”. It said there had been inadequate monitoring of projects in the past and the panel would look at several in depth.

The final report, which will be published in a month, will also look at whether there should be firmer guidelines on the role of advisers to the mayor. Former mayor Ken Livingstone suspended his race adviser Lee Jasper to allow him to clear his name after allegations that he was connected to an LDA-funded community group investigated for financial irregularities. The interim report acknowledged that the mayor’s advisers are allowed to exert pressure on the LDA in order to help the mayor achieve his objectives. But the report said new protocols may be needed to “enable this interaction to occur in an appropriate manner”.

The panel is made up of Conservative council leaders Ed Lister and Stephen Greenhalgh, former Sunday Telegraph editor Patience Wheatcroft, Patrick Frederick, chief executive of corporate funding and advisory company Aimex International, and is advised by Andrew Gordon, head of investigations in PriceWaterhouse Coopers’ forensic services group.