FINANCE experts brought in to oversee a failed Commonwealth Games legacy project in one of Glasgow’s poorest areas are proposing to charge up to £535 an hour for their services.
KPMG were brought in as administrators for the People’s Development Trust (PDT), which runs the Dalmarnock legacy hub, and could receive around £100,000 for over a month’s work.
SNP MSP John Mason said: “These fees seem exceptionally out of line and astronomical. It sticks in the throat because this was a project that was supposed to benefit the community.
“Accountancy and auditing is also dominated by the Big Four. Why were KPMG used?”
The Hub, which opened four years ago at a gala launch attended by local politicians and football legend Kenny Dalglish, was supposed to provide a lasting legacy for the east end following the 2014 Games.
Glasgow city council sold the land on which the Hub built to the PDT for a peppercorn sum, while the Scottish Government, Clyde Gateway and a lottery body stumped up over £3.5m in funding.
Over twenty staff were employed at the centre, which provided services including childcare, pharmacy and dental surgery to locals.
However, despite the huge sums of public money, the project was mired in claims of cronyism, nepotism and financial mismanagement in its early days.
A new regime was believed to have provided stability, but a senior insider close to the Hub said the early mistakes were too big to overcome.
One of the issues was an unpaid VAT bill of more than £200,000, following which the PDT was put into administration in January. Two senior figures at KPMG were appointed as joint administrators.
A review determined that the nursery, venue hire and educational projects could not continue, and 23 of the 25 employees were made redundant. The Council purchased the building for £1.
According to the “statement of administrator’s proposals”, which has been lodged at Companies House, KPMG stated that the “most likely exit route” would be to move to dissolution.
The document also lays out the remuneration KPMG proposes for the work it has carried out.
Between January 25th and March 15th, the firm incurred time costs of £111,666, representing around 317 hours at an average hourly rate of £351.37.
The rate rose to £535 an hour when some of the services were provided by more senior staff.
According to the KPMG rate card, a support staff member will cost £140 an hour, while the fees for a “manager” rise to £445.
A partner’s hourly rate stands at £655, which is around eighty times higher than the current level of the national living wage.
A report in 2011 revealed that 52% of children in the Parkhead/Dalmarnock area were living in poverty, the largest figure in the city.
More recent statistics have shown that almost half of Glasgow’s residents reside in the 20% of most deprived areas in Scotland, while 34% of all children in the city were estimated to be living in poverty.
A KPMG spokesman said: "In due course, the Joint Administrators’ time costs will be reviewed by creditors, with fees approved in accordance with the Insolvency Act and relevant insolvency rules and guidance notes. The Joint Administrators are officers of the court, appointed to act in the best interests of the creditors."
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