Consultants KPMG have announced they are quitting their advisory role with the Grenfell Tower blaze inquiry.
The accountancy giant have waived all their fees for work carried out so far after campaigners pointed out their links to firms that are to come under the scrutiny of the inquiry.
KPMG has lucrative contracts with Rydon – the main contractor in charge of the refurbishment which installed the cladding blamed by many residents for the rapid spread of the blaze; with Celotex – which make the insulation which police said failed safety tests, as well as the Royal Borough of Kensington and Chelsea – whose response to the tragedy is the subject of many complaints from locals.
There is no official finding yet that the installation of the cladding played a role in the blaze that claimed 71 lives last June, yet KPMG who were appointed to an advisory role in the inquiry earned £3.5m for services from Rydon.
And the auditing firm has had £1 million contracts with both Saint-Gobain Construction Products UK which owns Celotex, as well as the Royal Borough of Kensington and Chelsea.
Campaigners called on the inquiry to drop KPMG as it failed to disclose a conflict of interest. KPMG were awarded the £200,000 contract by the inquiry into the blaze with no other bidders considered.
The accountancy giant has said it had “mutually agreed with the inquiry that we will step down from our role with immediate effect”.
Labour MPs Clive Lewis and Emma Dent-Coad were among many who signed an open letter to Theresa May urging the prime minster and cabinet office to “reverse the decision to appoint KPMG as advisors to the Grenfell Tower inquiry, without competition.”
“The failure of KPMG to disclose a clear conflict of interest – that KPMG audit Celotex, the parent company which produced the flammable cladding, alongside its role as auditors of the Royal Borough of Kensington and Chelsea, and Rydon Group, the principal contractor, raises serious questions about the professionalism of KPMG and its ability to define and serve the public interest,” they wrote, adding:
“Government must recognise that appointing advisors so closely associated with firms under inquiry can only further fuel rumours of a deliberate cover-up and erode public trust.
“Big 4 accounting firms actively lobbied the Conservative Party in the lead up to the 2010 General Election to close the Audit Commission, which audited and investigated public bodies like The Royal Borough of Kensington and Chelsea (RBKC) and the Kensington and Chelsea Tenant Management Organisation (KCTMO).
The Audit Commission was shut by Government in April 2015, leaving an accountability vacuum in local government audit and fraud investigation, into which cases like Grenfell ultimately fall.
KPMG and other audit firms have directly profited from Government austerity, via the “bonfire of quangos” and related boom in consultancy and outsourcing work, while governance and scrutiny standards in public bodies have fallen.”
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