Probe into £300K council grant to PI specialist

AN AUDIT investigation has been ordered into the controversial award of a £300,000 Bolton Council grant to struggling personal injury law firm Asons.

It follows a public outcry in the wake of news of the grant, including from partners in two of the town’s prominent law firms.

A storm erupted after the council agreed to give the law firm the money to help with refurbishment costs and occupation of the former Bolton News offices, Newspaper House, on Churchgate.

Although details of the deal were initially withheld by the council, The Bolton News has reported it has seen correspondence between the authority’s director of place Stephen Young and council leader Cliff Morris outlining the rationale behind the grant over a five-year period.

Cllr Morris has now ordered a full independent audit of the decision to award the grant.

Cllr Morris said: “Financial transparency and trust at this challenging time is more important than ever and this is why I am calling for a full independent audit of this investment to reassure the public.

“As always, the council’s legal team checked all aspects of the agreement to ensure that we are complying with the law and our processes, and I am confident that an external audit will confirm this.”

Meanwhile, Craig Morris, a partner at Fieldings Porter, said the decision to award Asons the money was “deeply concerning”, saying “none of it makes any sense”.

He said: “The starting point in all of this is that most lawyers live a comfortable life in comparison to many other people who are struggling through the back end of years of public austerity.

“We shouldn’t be at the front of the queue for public handouts, there are far more deserving causes and the focus for successful law firms should be what we can put back into the local community.”

He said that Fieldings Porter had operated in Bolton for 145 years his firm “wouldn’t dream of asking the council to subsidise our firm”.

Morris went on: “Five years ago we expanded into Manchester which involved us acquiring new leasehold premises. We performed due diligence and made sure that they were fit for purpose.
 
“If they hadn’t been we wouldn’t have gone to Manchester City Council to seek a grant, it was our responsibility as business owners to get that right.

“£300,000 is a huge sum of money that could be used for a whole host of important things. It’s temporary accommodation with a social landlord for 50 families. It could fund all school crossing patrols for a year or be used a contribution to social care.

“There are endless possibilities that are much better uses of public money than this.

“That kind of money could have made a substantial difference to a dozen local businesses or funded 30 apprenticeships.

“For me this is not a political issue, it is one of the proper management of public funds. I cannot believe that the wider labour group has approved this payment and I would call on them and the council as a whole to conduct a formal transparent investigation into this payment.”

He also appealed personally to Asons boss Dr Imran Akram, adding: “We both run successful law firms.

“Please reflect on the fact that this is public money and in accepting the same there are so many other things that the money cannot now be used for. Your business shouldn’t need this cash. Pay it back. It’s the best thing you will do all year.”

Stephen Crompton, joint managing partner at Russell and Russell, also criticised the awarding of the grant.

He said: “This is extremely worrying. Law firms up and down the country have been subjected to the same challenging market conditions as Asons, so why has it been given preferential funding?

“The legal changes relating to personal injury claims is the same for all firms dealing in that area of law, ourselves included, yet we haven’t – and nor do we expect to – receive handouts from the council.

“Any firm worth its salt will adapt to changing conditions and plan accordingly, not expect the public to fund the refurbishment of their office accommodation.
“We have recently invested our own money in a new development on Newport Street in the town centre.

“The fit out of the office space there has cost a significant amount of money, but Russell and Russell is committed to Bolton and we want to remain a local employer and create jobs for local people, not fleece the public purse.
 
“I’d be very interested to understand on what basis the grant was given.
 
“When the Bolton News vacated the building, the office space was brought up to standard for selling on or leasing, so why it has taken a further £300,000 to make the place fit for purpose?

He added: “More importantly, is installing a games room and a roof terrace an ethical, and moral, use of public money when there are much needed care homes and children’s centres being threatened with closure because of the lack of funding?”
 
The most up-to-date accounts filed for Asons for the year to May 31, 2015 show Asons went from making pre-tax profits of £860,000 in 2014 to a loss of £1.1m.

The accounts, audited by Grant Thornton, also report a 14% dip in revenue from £15.9m to £13.6m.

At the time the company had 263 people on its pay roll and its wages outlay was £5.7m.

Principal risks facing the business were said to be changes to UK legislation that impact on the small claims limit.

The agreement struck with Bolton Council over the grant was said to stipulate Asons must occupy Newspaper House as its head office and must locate at least 80% of its staff in the building.

The funding can only be used for development costs associated with Newspaper House.

If the firm terminates the agreement it will be forced to repay the £300,000 on a sliding scale by 20% for each full year after the work is done.

Asons declined to comment when contacted by TheBusinessDesk