Council’s £1 million overspend investigated; our council’s multimillion overspend on new HQ not investigated!

OUR council has already spent nearly that much on its satellite HQ in Exmouth. The Honiton HQ was supposed to be cost neutral with the proceeds of the £7 Knowle sale to PegasusLife but latest estimates (some while ago and not adjusted for post-Brexit soaring costs) was around £10 million.

How come SWAP could do this in Herefordshire but not in East Devon. Or why KPMG – its new auditors – are not doing it now?

A special investigation into how the costs of establishing a joint customer services hub in a refurbished building soared from £950,000 to more than £1.9m has found evidence that officers “knowingly disregarded council process and procedures”.

The investigation into the Blueschool House refurbishment was carried out by the South West Audit Partnership for Herefordshire Council. The local authority has been working with the Department of Work and Pensions on the project. Have we ever seen the (updated) business case for the new HQ?

The business case for the hub was approved by the council’s Director of Resources on 13 May 2016 and the key decision taken on 2 June 2016 was approved by the Cabinet Member Contracts and Assets.

The SWAP report said: “Overall the council’s normal governance processes have not been followed by key officers involved in the Blueschool House refurbishment.

The key decision did follow the correct governance process however the business case to support the key decision lacked clarity over what works would be included in the £950K agreed financial envelope.

“It would appear that key staff including senior officers at Director level were aware of the council processes and procedures but these have not been applied during this project and there is evidence that officers have knowingly disregarded council process and procedure.”

The investigation found that although there were early indications from the framework provider that the project could not be delivered within the financial envelope even with value engineering, key officers failed to report this to Cabinet.

The report also said:

The rationale for the selection of the contractor could not be demonstrated as there were no records to support this. The property services team had responded to client requests without providing robust challenge, and had not followed the council procedure rules in relation to procurement.

The relationship between the property services team and contractors appeared to be informal for a capital project of this value and throughout the project there was little evidence that value for money could be demonstrated.

In line with the capital guidance, major projects should be overseen by a project board. The Accommodation Programme Board had oversight of the overall accommodation strategy until November 2016 however, there was no project board for the Blueschool House refurbishment project.

The timescale of the project was identified as a major risk in the business case as the project was subject to a time constraint pressure due to the DWP serving notice on their current property. This was a key factor in ensuring the project was progressed and had contributed to the overall poor governance.

The SWAP report said it was “for management to consider and determine whether any further action such as disciplinary action, should be taken against individual officers as it is clear there has been disregard for processes and procedures which has resulted in a significant overspend on the project”.

The report was due to be considered by the council’s audit and governance committee at a meeting this week (20 September).”

http://localgovernmentlawyer.co.uk/index.php

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