Treasury attacked for failure to halt fraud

Chris Blackhurst@c_blackhurst
Thursday 15 July 1993 23:02

TREASURY officials were heavily criticised by an all-party committee of MPs yesterday for failing to prevent fraud and mismanagement in the catering arm of the Civil Service, writes Chris Blackhurst.

As revealed in the Independent on Monday, the Commons Public Accounts Committee found that the way the Treasury managed Forward - the agency that runs 175 Civil Service bars and restaurants, has a turnover of pounds 30m a year and employs 1,100 staff - was deplorable. Records were not kept or were destroyed, fictitious employees were entered on the payroll and procedures for putting contracts out to tender were not followed.

Fraud had been found and the Treasury had held 15 disciplinary inquiries. The loss to the taxpayer so far was put at between pounds 500,000 and pounds 1m, with a further liability for non-paid tax of up to pounds 450,000 and a bill of pounds 110,000 for investigating accountants called in by the Treasury.

The committee said that the affair, involving poor control, mismanagement, irregularity, malpractice and fraud, 'represents a serious failure in the proper conduct of public business in what is - or should have been - a straightforward trading operation'.

Reginald Wheeler, the chief executive of Forward, is to retire early. The committee said that it hoped the disciplinary cases against other Forward staff would be pursued and asked to see a report on their outcome.

Forward is now being sold off. But the MPs voiced concern about the reliability of its financial records in the light of what they had heard. They were especially angry that, as long ago as 1983, a Treasury official had

concluded that Forward needed to adopt proper commercial


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