TL; DR Tower Hamlets Council has still not provided a credible explanation as to why the AP1 ‘spot purchase’ system was used for multiple property transactions. We tried to match Payments for Suppliers data with the AP1 data we currently have and could not find any matches.
So what is the deal with these property purchases by the Council using the AP1 ‘spot purchase’ process?
To recap, the AP1 process is according to the PricewaterhouseCoopers (PwC) report ‘Best Value Inspection of the London Borough of Tower Hamlets’ published after looking into the way Lutfur Rahman ran the council, an ‘alternative payment process reserved for grants and exceptional one-off requirements’ which ‘is intended to be used for exceptional circumstances and not day-to-day business.’
Or according to a Tower Hamlets Council response to a query of ours on 17th December 2021 “AP vouchers are a legitimate money transfer. For property purchases, we use this payment option to transfer funds to solicitors to hold the money in their accounts ready for completion day, which is agreed between the parties.”
And if you believe that you will believe anything.
Helen is saved by the AP1 system!
Imagine the scene somewhere in the Town Hall as Helen, the council officer responsible for managing the purchase of properties, comes into work one morning.
Helen sits down and checks her ‘To Do’ list for the day. To her horror, after several weeks of working on a series of ‘Buy Back’ property purchases, she had forgotten that property can only be bought with money!
A visibly distressed Helen asks her colleague Sabina for advice.
“Don’t worry, the AP1 system is designed for just such an eventuality!” says Sabina.
“Really? I thought that was only for Youth Service officers to access vast amounts of council cash whenever they felt like it?” replied Helen.
Sabina laughed and shook her head at Helen’s naivety.
“No, we use the AP1 system whenever we forget to use the well-established financial processes which we must adhere to according to government guidelines and best public sector financial practise. Or when we are told to.”
Helen perked up at this news. She asked Sabina to tell her more.
“A couple of weeks back I totally forget to bring my usual packed lunch so used an AP1 voucher to order a huge pepperoni pizza for delivery. It was yummy.”
This confused Helen more than a little.
“That’s great, but this is not just £25 for a Dominos, I need about £650,000 for the conveyancing solicitor to pay out and I need it sometime in the next ten days. It’s a totally unforeseen emergency! How could I have known this would happen? What am I going to do?” The pitch of Helen’s voice was rising now and Sabina could see the panic in her eyes.
Pizza? Property?
Sabina stood up and walked over to Helen’s desk.
“Don’t worry Helen! Pizza purchase? Property purchase? What’s the difference? They both start with a P!”
Sabina could see that Helen was beginning to understand how things worked in the Town Hall now and went back to her photocopying.
Note:Obviously it is impossible that anything like the above scenario could ever happen as Council staff are not allowed to eat pizza at their desks.
This sorry tale of Helen forgetting that large sums of money can be transferred to a solicitor from a large organisation (like a local authority) quite easily nowadays.
Indeed, according to some, it is easier, faster and more secure than using the AP1 process.
Trouble is a bank transfer means the payments can be easily tracked. Whereas with the AP1 process (and we use the term ‘process’ very loosely)… well, it seemed to work fine for the Youth Service lads!
But back to the slightly odd saga of the £111 million of property purchases that went through the AP1 system because, like Helen, nobody at the Council realised that money was needed to buy flats.
And who could ever consider property purchase day-to-day business?
After spending another weekend working Moley has managed to move (or replicate if you are a geek) his database of Tower Hamlets Council Payment to Suppliers data so that he can more easily access the data.
So Mole thought it would be interesting to see if he could match property transactions in the AP1 data to records in the Payments to Suppliers (P2S) data.
How difficult could it be?
First of all we took these P2S records as a little test group. It does not matter that the supplier is (solicitor) Foot Anstey, what matters is can we match P2S records against AP1 property transactions?
| unique_id | directorate | responsibleUnit | expenseType | paymentDate | transNum | amountNet | supplierName |
|---|---|---|---|---|---|---|---|
| 156447 | Place | Purchase of Accomm for TA 1-4-1 receipts | Acquisition of Land/Buildings – Stamp Duty | 13/11/2019 | 5333120 | 23,600.00 | Foot Anstey |
| 156464 | Place | Purchase of Accomm for TA 1-4-1 receipts | Acquisition of Land/Buildings – Stamp Duty | 13/11/2019 | 5334358 | 26,000.00 | Foot Anstey |
| 156444 | Place | Purchase of Accomm for TA 1-4-1 receipts | Acquisition of Land/Buildings – Stamp Duty | 13/11/2019 | 5332223 | 26,800.00 | Foot Anstey |
| 156440 | Place | Purchase of Accomm for TA 1-4-1 receipts | Acquisition of Land/Buildings – Stamp Duty | 13/11/2019 | 5330088 | 27,600.00 | Foot Anstey |
| 156462 | Place | Purchase of Accomm for TA 1-4-1 receipts | Acquisition of Land/Buildings – Buybacks | 13/11/2019 | 5334344 | 335,600.00 | Foot Anstey |
| 156446 | Place | Purchase of Accomm for TA 1-4-1 receipts | Acquisition of Land/Buildings – Buybacks | 13/11/2019 | 5333120 | 420,000.00 | Foot Anstey |
| 156463 | Place | Purchase of Accomm for TA 1-4-1 receipts | Acquisition of Land/Buildings – Buybacks | 13/11/2019 | 5334358 | 450,000.00 | Foot Anstey |
| 156443 | Place | Purchase of Accomm for TA 1-4-1 receipts | Acquisition of Land/Buildings – Buybacks | 13/11/2019 | 5332223 | 460,000.00 | Foot Anstey |
| 156439 | Place | Purchase of Accomm for TA 1-4-1 receipts | Acquisition of Land/Buildings – Buybacks | 13/11/2019 | 5330088 | 470,000.00 | Foot Anstey |
As you can see these transactions all took place on 13th November 2019 so if we could not find one we should be able match another one on the same date.
In theory. Maybe.
The nearest date we can find is this record which is for a transaction that happened in November 2019 (no idea what day as the data is incomplete)
2019 11 RTB Grant Scheme Bow Road E3 RTBBB Property £(48,177.73)
And £48k is too little for a purchase. So that is no result for basic matching on date of transaction.
Data for download
The CSV file below contains 294 AP1 transaction records between 2018 and 2019. Please note that the address data in the AddressFromText field may be inaccurate (in our experience approximately 45% is).
This CSV file contains 952 Payments to Supplier records between 03/07/2013 and 12/03/2021 extracted from Enquirer Payments to Supplier database searching on the existence of the string ‘Acquisition of Land/Buildings’ in expenseType column. Open Data.
Try something another way….
This time let’s just try and find a sale price (amountNet) which appears in the Payments to Suppliers data. There are quite a few here (or ‘a bunch’ as our American friends would say) which all have the same transaction price of £265,000.
| unique_id | directorate | responsibleUnit | expenseType | paymentDate | transNum | amountNet | supplierName |
|---|---|---|---|---|---|---|---|
| 17614 | Place | Poplar HARCA Purchase of Temporary Accommodation | Acquisition of Land/Buildings – Purchase Money | 19/12/2018 | 5153216 | 265,000.00 | Foot Anstey |
| 17616 | Place | Poplar HARCA Purchase of Temporary Accommodation | Acquisition of Land/Buildings – Purchase Money | 19/12/2018 | 5153217 | 265,000.00 | Foot Anstey |
| 17618 | Place | Poplar HARCA Purchase of Temporary Accommodation | Acquisition of Land/Buildings – Purchase Money | 19/12/2018 | 5153218 | 265,000.00 | Foot Anstey |
| 17646 | Place | Poplar HARCA Purchase of Temporary Accommodation | Acquisition of Land/Buildings – Purchase Money | 19/12/2018 | 5153332 | 265,000.00 | Foot Anstey |
| 46085 | Place | Poplar HARCA Purchase of Temporary Accommodation | Acquisition of Land/Buildings – Purchase Money | 27/09/2018 | 5107191 | 265,000.00 | Foot Anstey |
| 46089 | Place | Poplar HARCA Purchase of Temporary Accommodation | Acquisition of Land/Buildings – Purchase Money | 27/09/2018 | 5107193 | 265,000.00 | Foot Anstey |
| 46095 | Place | Poplar HARCA Purchase of Temporary Accommodation | Acquisition of Land/Buildings – Purchase Money | 27/09/2018 | 5107379 | 265,000.00 | Foot Anstey |
| 46105 | Place | Poplar HARCA Purchase of Temporary Accommodation | Acquisition of Land/Buildings – Purchase Money | 27/09/2018 | 5107384 | 265,000.00 | Foot Anstey |
| 46077 | Place | Poplar HARCA Purchase of Temporary Accommodation | Acquisition of Land/Buildings – Purchase Money | 27/09/2018 | 5105914 | 265,000.00 | Foot Anstey |
| 45603 | Place | Poplar HARCA Purchase of Temporary Accommodation | Acquisition of Land/Buildings – Purchase Money | 06/09/2018 | 5097460 | 265,000.00 | Foot Anstey |
| 45611 | Place | Poplar HARCA Purchase of Temporary Accommodation | Acquisition of Land/Buildings – Purchase Money | 06/09/2018 | 5097467 | 265,000.00 | Foot Anstey |
| 45613 | Place | Poplar HARCA Purchase of Temporary Accommodation | Acquisition of Land/Buildings – Purchase Money | 06/09/2018 | 5097468 | 265,000.00 | Foot Anstey |
Nada. Zilch. Zero. None. No match on £265,000.00
Which is a bit boring really, isn’t it?
However we should remember that we are working with incomplete AP1 transaction data here. However there is no property with a transaction price of £265,000 in the AP1 data which is a little odd. The nearest are £267,245.00 and £262,209.17.
What gives?
Remember that the Payments to Suppliers data is the gold standard. Every local authority has to publish this by law.
Following on from this if we cannot find property transactions in the AP1 data that match – even partially – a transaction in the Payments to Suppliers data then there is something very odd going on.
The other option is that the Payments to Suppliers data is incorrect, either by accident or design.
Either way we can conclude from this little exercise that the property sales made using the AP1 process are worthy of further investigation because as it stands there seems to be no formal published record of these property sales.
As nobody else seems interested (as usual) then we might as well do it ourselves (as usual).e Enquirer can, and has, submitted Freedom of Information Act requests for more information, but then the question is if that data is accurate?
This is all like learning the basics of book keeping in a hall of mirrors.
