Police raid homes in One Connect investigation

POLICE have raided three properties as part of an investigation into financial irregularities at Lancashire County Council.

Officers attended addresses in Southport and Knowsley in Merseyside, and Fulwood near Preston as part of an ongoing probe launched last year into the awarding of contracts to One Connect, the council’s joint venture with BT.

No arrests were made and the police would not identify the owners of the properties. Two men have attended a police station by “pre-arranged appointment” and a third will do so in the coming days.

One Connect was set up in May 2011 to run council functions, such as procurement, human resources and IT, with the aim of saving around £400m over 10 years. It has around 800 staff seconded to it from the council which holds a 40% stake. The majority share is owned by BT.

Council chief executive Phil Halsall was suspended in August over allegations that “favouritism” was shown to One Connect over a £5m fleet maintenance contract. The deal was approved in April by the former Conservative council leader Geoff Driver.

An investigation into Mr Halsall’s conduct was dropped when he left the authority in October. Meanwhile, payments of more than £500,000 made to the former chief executive David McElhinney continue to be investigated by police.

He was paid £507,597 by the council in two payments of £231,709 and £275,888 last summer covering work carried out between May 2011 and March 2013. Mr McElhinney resigned at the end of August, before the payments were discovered by County Hall’s treasurer.

In November Lancashire’s ruling Labour group called in the police and announced they would scrap the One Connect agreement. Councillor Driver, now leader of the opposition, has previously argued the investigation was politically motivated.

In a statement Lancashire police said: “We can confirm that on Wednesday February 12 officers from Lancashire Constabulary have searched three addresses as part of an ongoing investigation. The searches follow a referral from Lancashire County Council made last year outlining concerns in relation to a number of financial irregularities.
 
“One of these addresses is in the Knowsley area of Merseyside, one in the Southport area of Merseyside and one in Fulwood, Preston. No-one has been arrested at this stage. Two men have so far attended a police station by pre-arranged appointment as part of an on-going investigation. We will also be speaking with a third man in the coming days.
 
“We remain at the relatively early stages of the investigation into these matters and so it would be inappropriate to comment any further for the moment.”
 
Mr McElhinney is also the chief executive of a similar joint venture in Liverpool called Liverpool Direct. He worked with Phil Halsall at the authority who was director of finance until 2008. His departure was controversial because he received five years’ enhancement on his pension package, worth around £420,000, and a lump sum of £80,000.