KPMG resigns from Grenfell inquiry amid public outcry

09 January 2018 Authored by Consultancy.uk

After days of sustained public pressure, KPMG has announced its withdrawal from its supporting role in the Grenfell inquiry. The firm took the decision following a campaign that called for Theresa May to overturn their appointment, amid claims of conflicts of interest, as KPMG have earned substantial amounts from auditing a number of parties allegedly implicated in the lethal fire of 2017.

The Grenfell tower fire cost a confirmed 71 people their lives on 14 June last year, and left many more homeless. The blaze spread rapidly up the residential tower block in London, after decorative cladding caught fire. The cladding system on Grenfell Tower was reportedly passed by a building control officer from the Royal Borough of Kensington and Chelsea on 15 May 2015, despite a nationwide warning that the combustible insulation it featured should only be used in conjunction with cladding that does not burn. Some residents later reported that fire alarms in the building had failed to sound, while others confirmed that official advice given to them by local council directives had said to “stay put” in the event of a fire – something which would likely have seen them among the number killed.

On 15 August 2017 the Prime Minister set the terms of reference for an official inquiry into the tragedy. The Royal Borough of Kensington and Chelsea, Rydon and Celotex were three parties expected to come under scrutiny via the process – and were also at the heart of the latest controversy involving the inquiry. KPMG, a firm which has previously worked for all three parties, was announced as an official advisory partner of the inquiry.

KPMG resigns from Grenfell inquiry amid public outcry

Rydon, who installed Grenfell’s cladding system, had reportedly paid KPMG £3.5 million for its services, prior to the appointment, while the group also provided £1 million in auditing work to Saint-Goban Construction Products – who own Celotex, the creators of the synthetic insulation that the cladding was installed on top of. Most importantly, however, KPMG had also earned almost £1 million in auditing fees from the Royal Borough of Kensington and Chelsea (RBKC) – the council whose alleged failings sit at the heart of the catastrophe of Grenfell. The council has been heavily criticised for ignoring residents’ concerns before and after the deadly fire.

Once it became public knowledge, KPMG’s appointment subsequently provoked instant furore, with a long list of high-profile critics calling for a reversal of the hire, claiming the firm had failed to disclose a major conflict of interest. Pop star Lily Allen, and Labour MPs - Clive Lewis and Emma Dent-Coad, the recently elected MP for Kensington, joined a host of academics and campaigners in the signing of an open letter to beleaguered Theresa May, condemning the selection. Now, the Big Four professional services firm has revealed that it has backed out of its role in the inquiry. The multinational corporation had been in line for a £200,000 paycheque to assist with the process over three months.

Alleged conflict

The Cabinet Office had confirmed the hiring of the firm to provide 'planning and programme management support' just days before the dramatic turnaround, amid mounting public pressure. According to the British press, the three-month, £200,000 contract was awarded in a fast-track process and no other bidders were considered.

When challenged by the London Evening Standard about the hiring of KPMG, the inquiry was forced to admit that it was unaware that KPMG had been employed by Celotex – though it also confessed it had known about its connection with both Rydon and RBKC. Regardless, the inquiry’s organisers believed that the firm was needed to get the inquiry underway “rapidly”, adding that the consultancy firm would play “no role in its investigative or decision-making processes”. Confidentiality clauses were in place to prevent conflicts of interest, they said.

A statement from KPMG, who have waived fees for work undertaken on the project to date, said that its role on the inquiry as project management advisor was "purely operational" and that it had no role advising "on the substance of the inquiry".

A spokesperson added, "Whilst we are confident that no conflicts exist between our role advising the inquiry and our work for other clients, we recognise that strength of opinion about our role risks undermining confidence in the Inquiry.”

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