The suspension of Ruth Black follows a meeting with the new leader of Glasgow City Council, Gordon Matheson, who removed the Labour whip from her after the authority’s internal auditors uncovered a raft of financial irregularities at the Castro Centre she runs with her long-term partner, Jeanie McDougall.
A second meeting yesterday between former Solidarity Party member Black and the council’s head of finance saw Castro’s £50,000 grant from the authority cancelled with immediate effect, in a move that is expected to see the Glasgow centre close.
Irregularities include non-payment of tax and National Insurance for staff, despite deductions made from wages, the employment of a relative, McDougall’s son, which runs contrary to council grant rules, and operating with no public and employee liability insurance. The centre’s building insurance has been withdrawn due to non-payment. Further checks were conducted into concerns about massive phone bills, irregularities over payments to and from gaming machines, and the use of the grant to pay for a car.
Castro has debts of £44,000 and although Black has said the centre will continue trading without the grant, senior sources within the council insist that would mean Castro trading insolvently as less than £20,000 of the grant has been paid.
HMRC is also investigating non-payment for seven months, while board member Robert Tamburrini, a senior figure in the social housing sector, has quit after the scale of the irregularities became clear.
A source close to Matheson said yesterday: “Gordon met with Ruth Black this afternoon and discussed the internal audit and the finance director’s decision to withdraw funding from Castro. Following that he informed her she is being suspended by the Labour Party.”
The suspension brings to a head a saga that has run for almost a year and has been an integral feature of the scandal surrounding the dramatic political downfall of former Glasgow council leader Steven Purcell amid confessions of cocaine and alcohol abuse and blackmail fears.
Documents passed to The Herald show that Black allegedly declared the support of Purcell for the £50,000 contract for the centre five months before it was awarded. She told rivals for the contract they would not be supported by Purcell.
Black faced almost four hours of questioning in April over the contract, a week after being quizzed about whether she had a role in the supply of drugs to Purcell’s circle. She was also asked about claims she had taken amphetamines. She denied any wrongdoing. Black yesterday refused to comment on either her political future or that of the Castro centre.
A council spokesman said: “We can confirm that all grant payments to the Castro Centre will be terminated with immediate effect.”
