• Register
Return to: Home > News > Big Four > KPMG UK and Grenfell tower inquiry mutually agree to terminate contract after a public backlash over conflicts of interest

KPMG UK and Grenfell tower inquiry mutually agree to terminate contract after a public backlash over conflicts of interest

KPMG UK and the Grenfell tower inquiry have mutually agreed to terminate the firm’s project management advisory contract following a public backlash regarding £5.5m (US $7.4m) earnings from the bodies under investigation.

KPMG earned £1m from audit services to Celotex-owner Saint-Gobain Construction Products UK, the producer of the flammable cladding that was reportedly responsible for the spreading of the fire, as well as £3.5m in services to the principal contractor for the refurbishment, Rydon Group. In addition, KPMG also provided auditing services to the Royal Borough of Kensington and Chelsea (RBKC) which has been heavily criticised for ignoring residents’ concerns before and after the fire. `

An open letter signed by 71 academics, writers and campaigning organisations, as well as two Labour MPs, Clive Lewis and Emma Dent-Coad was sent to prime minister Theresa May on Sunday 7 January. It called for the reversal of the appointment and raised “serious questions about the professionalism of KPMG and its ability to define and serve the public interest”.

The Grenfell Tower inquiry said in a statement: "Following concerns expressed by some core participants, the inquiry team has discussed the contract with KPMG which has agreed that its work should now cease.”

KPMG announced yesterday that it had mutually agreed to quit the role but that there was no conflict of interest and insisting that only planning and management support would have been provided in this early phase without any investigative or decision making processes. It was also pointed out that strict confidentiality clauses had been included the contract. KPMG waived its fees and recognised the risks their role could have had on the public confidence of the inquiry.

Prem Sikka, professor of accounting and finance at University of Essex, said to the London Evening Standard: “Everyone can see that at the very outset there was a potential conflict of interests. In order to secure public confidence, it is now vital that the correspondence and minutes relating to the KPMG appointment should be made publicly available.”

The firm was appointed in August 2017 by the government for a £200,000 three month contract, without public tender, although the appointment was only made public in December. The inquiry admitted it was unaware about KPMG being employed by Celotex, but had known of the connection to RKBC and Rydon Group.

“Open contracting is an important anti-corruption tool that allows effective oversight to root out the awarding of contracts to benefit private interests,” a statement by Transparency International UK read. “Such a process may have also helped reveal and mitigate against potential conflicts of interest, with KPMG’s other clients including companies that are subjects of the Grenfell Inquiry.”

A key aspect of the inquiry into the Grenfell fire tragedy must include whether corruption or corrupt practices had any part to play, Transparency International UK director of policy Duncan Hames said. “It is absolutely imperative that the inquiry itself is conducted in the most transparent way possible and with the highest level of integrity. It is therefore worrying that the Government has failed to honour these principles, taking shortcuts when hiring advisers to assist the inquiry. The scale of this contract is enough that it should automatically require a competitive tender process.”

The Grenfell Tower fire broke out in the early morning of 14 June 2017 and caused 71 deaths.

Top Content

    Brazil: regulation and technology form basis for recovery

    Opportunities in the capital markets and the ever-growing influence of technology are expected to have a significant impact on the Brazilian accounting profession over the next 12 months, writes Paul Golden.

    read more

    Mentoring support and the opportunity to delegate

    Jon Lisby will be known to many from his former role as CEO of Kreston International. Here, he explains the background to his new venture, Global Alliance Advisory Services (GAAS), and how he aims to offer support to alliance CEOs.

    read more

    Global by name, global by nature

    Stephen Heathcote became chief executive officer of PrimeGlobal on 1 June 2019. Robin Amlôt met him to discuss the various new challenges that he has taken on, and his ambitions for the association.

    read more

    ARGA team, assemble!

    The new top team has been named that will see in root-and-branch reform at the Financial Reporting Council (FRC) as it transforms into the Audit, Reporting and Governance Authority (ARGA). Will the new duo be as dynamic as some are hoping? Robin Amlôt reports.

    read more

    CORONAVIRUS TIMELINE: REACTIONS FROM THE ACCOUNTANCY PROFESSION

    As the Coronavirus (COVID-19) continues to spread across the world, the International Accounting Bulletin and The Accountant will be collating all the latest news and updates from the profession on the pandemic’s impact.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.