PracticeAuditIt’s all over for Dame Shirley

It's all over for Dame Shirley

After 15 long years, the Westminster gerrymandering scandal seems to be over. On Monday, the city council and the Audit Commission announced they had reached a settlement with former leader Dame Shirley Porter over the illegal and fiercely controversial designated sales policy the central London borough employed in the 1980s.

‘Following negotiations and a mediation process, Dame Shirley and her family have agreed a settlement to the value of approximately £12.3m,’ a carefully crafted statement read. Those few words marked a significant triumph for the auditors, lawyers and forensic accountants involved in pursuing the action and persuading Dame Shirley to pay her penalty.

Much of the credit should go to former district auditor John Magill.

For a long while the saga took over his life. He spent £3m investigating the claims that the housing sales policy was illegal, conducting more than 130 interviews with 44 people in the process. All told, the proceedings took 12 years and five months.

Since then and by its own admission, Westminster has spent ‘many millions’ chasing the £37m surcharge (including interest) imposed by Magill on Dame Shirley and former council leader David Weeks.

Last year, Magill was cleared by the European Court of Justice. The auditor, according to Dame Shirley, had acted as policeman, judge and jury in the process and compromised himself by revealing ‘provisional’ findings before he had completed his investigations. Judges sided with Magill.

Despite his victory, few – Accountancy Age and the ECJ included – expected the money to be recovered. In 2001, the council had obtained a freezing order against her worldwide assets, subsequently revealed to be approximately £300,000. It was a surprisingly small amount for a Tesco heiress once worth millions.

But in recent months the wind began to blow in a different direction.

The council successfully froze certain overseas trust assets connected to Dame Shirley and her family. It was the prospect of legal action that prompted the move to mediation.

In recovering £12m – a third of what was owed once interest was taken into account – the council was being pragmatic. Nevertheless, the Audit Commission was impressed, with chief executive Steve Bundred congratulating officials and advisers on their work.

Bundred was right. A lot of people deserve a lot of credit. But in truth few accountants could match Magill for persistence and determination.

Email comment@accountancyage.com.

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