Money-laundering and corruption charges rock Edinburgh council

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FIFTEEN people, including four former employees, have been charged in connection with alleged fraud at City of Edinburgh Council.

The allegations include corruption and money-laundering, and it is understood that as well as former workers, council contractors are among those charged.

They relate to repairs carried out at council buildings in the capital and follow a police investigation which sprung out of the statutory notice repairs scandal.

More than 800 people have complained about being overcharged for unnecessary and substandard work by the property conservation department.

Since 2005, statutory repair bills have shot up from £9.2 million to about £30m in 2010.

The council has launched its own investigation, costing £1.5m over two years. Seven people have been dismissed and about 12 are understood to currently be suspended by the council.

Earlier this month, city development director Dave Anderson was suspended because of “managerial matters”, thought to include a lack of scrutiny of the property conservation department. He has a £123,525 salary and is the most senior figure suspended so far. In September 2011, the scandal spread to the property care department, which looks after repairs at council buildings while property conservation covers others, such as homeowners’ tenement blocks.

One source said: “The initial investigation was looking at property repairs but has spread out into the council’s own buildings, with many of the same contractors being involved.”

Last year, it emerged police were called in to probe massive bills at a community centre for work that was never carried out. Three years of bills, handled by the property care department, were handed over to the police by staff at the centre.

SNP councillor Stefan Tymkewycz, one of the first to raise concerns about the council’s property services, said: “I am not surprised that there have been these arrests. I was aware that the investigation had reached into the property care department. However, I am not aware of the details of the allegations.”

Labour MSP Sarah Boyack added: “It is alarming that the issues and allegations which have dogged statutory repairs over the last few years do not appear to be isolated within the property conservation section. I am concerned that the council’s past failure to address the repairs issues has left a toxic legacy.”

Police have stressed the investigation has been separate to the one into property conservation, which has seen a report passed to the procurator fiscal but, so far, no charges brought.

“A Lothian and Borders Police investigation into alleged corruption and fraud involving former employees of City of Edinburgh Council’s property care department has resulted in a number of individuals being charged,” a police statement said.

“The procurator-fiscal has been briefed and a full report will be submitted in due course.”

Mark Turley, director of services for communities, said: “This shows that since this service became my responsibility in March 2011, these concerns have been taken very seriously.

“We are working hard to deal with the significant numbers of customer complaints and to ensure that, in future, services are accountable to customers and that the necessary checks and balances are built in.”