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

Is Mr Cohen up to his job?

Richard Cohen has not had a good year (well, actually he has, as he remains Deputy CEO and Relocation Manager for EDDC).

He came under fire last week for saying (twice) that the DMC had “stymied” relocation plans – though actually if anyone stymied anything it was PegasusLife putting in a planning application that was unfit for purpose.

Just so show this wasn’t a one-off, let us remind ourselves of this is transcript of part of a speech by a well-known Sidmouth businessman with experience of property development, made at a Sid Vale Association Meeting at the Unitarian Church, Sidmouth, 9th December 2014.

The speech begins with a discussion of Cohen’s estimate of total relocation costs at about £10 million.

“The numbers are completely, hopelessly and scandalously wrong. They are useless, they are terrible and have to be challenged vigorously and strenuously. These numbers are rubbish. They don’t include the green travel plan, they don’t include compensation for the staff, they don’t include the cost of the move itself, they don’t include the costs of hubs the other towns and, most importantly, they don’t include the cost of officer time and members time that is involved in all of this.

The expert, Mr Steve Pratten from Davis Langdon, he is going to cost £1million or more on his own. It doesn’t include the legal costs in all this. I say to the District Council that I have estimated the real costs to be £20million. That figure was not disputed – Richard Cohen did not say it was exaggerated – he said he didn’t recognize the number. What that means is that I was bang on the money.

Ladies and gentlemen, we are trusting Richard Cohen to mastermind this whole process and we are assuming that he’s accurate in the mathematical calculations. This is the same man who measured the Knowle 40% smaller than it turned out to be! He got it wrong by 40%. Robin Fuller had to write a paper, he was rubbished in the press and it turned out that he was correct. The Knowle is 40% bigger than Richard Cohen thought it was.

This is the same man who was responsible for four attempts to compose the economic impact assessments rejected by his own planning committee. He can’t get simple mathematics right. This same man tells us that energy prices are going to go ahead for the next 20 years at 10% over inflation. He is alone in the entire world in thinking this. Nobody else believes that including your energy companies who will fix your energy costs for the next four years. That instantly takes £1.5million out of all the savings that are supposed to be made by moving, so he hasn’t even bothered to explore that possibility.

He is also the man who shifted the southern boundary of the Knowle to include the second tier of parkland without telling anybody and in contradiction to the specific instructions of the Development Management Committee. I was told this would not be investigated because the Inspector would look at it, which he would not do because it was not in his remit. So that has never been investigated by anybody at the Knowle.

He did it without managing to record that process; without managing to record any conversation with any individual, without writing a single email, or keeping a single note or sending any kind of correspondence to any third party. Because I made a freedom of information request, and there was nothing there.

He did it unilaterally, on his own, secretly, and he didn’t tell a single soul, and I only found out by accident.

This is not the kind of person I would trust to do these calculations. Now when he says it is going to cost £15.9million to refurbish the Knowle, I would tell him that that’s a load of bunkum. This relates to the entire building, which nobody advocates retaining. Why is anybody working in a bathroom when the Knowle is two and a half times the size of the building EDDC says it needs? How can that be possible? Mr Cohen in his calculations also asserts that there is nil chance, not 1% chance of local government reform in the next 20 years.”

“Quite honestly, we have fallen flat on our face” with the relocation project, warns Honiton Councillor, Peter Halse

At last night’s Overview and Scrutiny Committee senior Tory councillor Peter Halse lashed EDDC’s Relocation Project. He said it risked the Council’s reputation for financial prudence. “At the time (the relocation project) looked OK, but now, with hindsight, it looks pretty bad….Quite honestly we have fallen flat on our face!” He was sceptical about Deputy CEO Richard Cohen’s claimed energy savings, and said employees based in the newer 1970/1980s building, “can’t see any reason why they’d want to move”. He concluded “It’s not just the leadership who are responsible. We need to look this thing full in the face. We can get out of this”.

Sidmouth resident Richard Eley, had already mauled Richard Cohen’s assumptions on future energy cost savings which were “way out of line” with those predicted by the Department of Energy and Climate Change (DECC). Mr Cohen in response welcomed the fact that auditors would now be taking “a useful look under the bonnet, as it were”. In the meantime a preferred developer had now been selected for a mix of care home and residential properties at Knowle. The planning process would have to be gone through by the developer and further attempts to delay the Knowle sale have been factored in to the costs, he added.

When Independent Cllr Claire Wright expressed concern that EDDC’s planning committee would be under extreme pressure to grant permission to develop the Knowle because the whole relocation project depended on it, she was accused of casting doubt on the integrity of councillors.

Independent Councillor Roger Giles didn’t get a clear answer from Mr Cohen about where his 10% annual energy inflation figures came from, only that they were “conservative”! And there was no answer to Cllr Giles’ second question about how much extra the renovation of Exmouth Town Hall would cost.

Tory Cllr Graham Troman (Vice Chair of the OSC) said the Knowle site was an appreciating asset while refurbished offices or new-build on an industrial estate (e.g. Heathpark) would not recoup the money spent on them.

Tory Cllr Sheila Kerridge urged her colleagues to show transparency and “not to be seen to be doing things underhand….Put the matter on hold until we know the figures”. (echoing Cllr Claire Wright’s proposal voted down a few weeks earlier.

Chair Tim Wood concluded that all would be examined in great detail by the auditors so there was no cause for alarm.

The second burning issue was the suggested reform of Task and Finish Forums.

A proposal from a Democratic Services Officer (advised by CEO Mark Williams?) that the scope of TAFFs should be proposed by officers, seemed pretty well acceptable to the obedient majority – though it is going to be thought about first by one of Cllr Bloxham’s Think Tanks.

The controversial Business TAFF will continue with the same members as before, but without too much embarrassing looking back at relations with the East Devon Business Forum whose demise seemed to be lamented by Deputy Leader Andrew Moulding. He assured everyone that the TAFF will now have perfectly respectable relations with the new East Devon Business Group which genuinely represented the District’s entrepreneurs.It was time to turn the page, he said, and stop attacking the perceived influence of the EDBF on crucial planning decisions. The representative from Axminster concluded,fittingly, that he was not “trying to sweep anything under the carpet!”

A question for the SWAP internal auditor

At the last Audit and Governance meeting, the internal auditor – SWAP – said they wanted electors to ask questions about Knowle relocation (as if there haven’t been enough!

So here is one:

What is the difference between “cost neutral” and “no additional cost” when speaking of Knowle relocation?

We ask because one of the answers to a question asked about this on “What Do They Know” is as follows:

Question: Could you confirm that the council still wishes to render any final decision as cost neutral?
Answer: To be specific, the Council is committed to delivering new offices at no additional cost to council tax payers.

https://www.whatdotheyknow.com/request/relocation_manager#incoming-398480

Now, obviously there is something different about the two phrases or the answer would not have been so specific.

We are keeping our beady eyes on this one – the devil is in the detail and detail is hard to find at Knowle.

Relocation costs: EDA (and others) to the rescue!

“The East Devon Alliance campaign group has long argued that the relocation project has had an air of “secrecy” surrounding it and has questioned why the council’s financial case has “never been fully revealed”.

Now, the group has welcomed the decision for reports into the “relocation financial model calculations and assumptions” to be made public: An internal report into the relocation figures by Andrew Ellins, audit manager of the South West Audit Partnership, and by external auditors Grant Thornton, will be made available to members of the council’s Overview and Scrutiny and Audit and Governance committees ahead of their joint meeting to discuss the findings on March 5.

… [EDA member] Mr [Tony] Green welcomed the forthcoming publication of the reports but criticised the time it’s taken for the financial case behind the controversial project to be scrutinised and revealed.

“There’s been a whole lot of secrecy surrounding the figures and a lot of suspicion about the move,” he said. I would have welcomed a detailed report a couple of years ago before the decision was taken to move. It’s extraordinary that it’s been left until the eleventh hour for auditors to look at the data in detail.

There was definitely a feeling at the meeting that the committee were waking up to the sheer scale of what could go wrong, and there was a genuine effort to get to the bottom of figures they had previously taken on trust.”

At the meeting, former chairman of Sidmouth Chamber of Commerce, Richard Eley, questioned the council’s annual energy consumption prediction of around eight per cent increase a year. Mr Green added that the estimation was “ridiculous” and annual costs would be more like a two – four per cent increase.”

Read more: http://www.exeterexpressandecho.co.uk/Campaigners-welcome-8220-long-overdue-8221/story-25846666-detail/story.html

PS: Just because we’re divorced it doesn’t mean we don’t still love ’em!

South West Audit Partnership: recent FOI requests

Including how councillors can serve on its board and remain neutral and minutes of Board Meetings, though SWAP seem unable to understand quite how whatdotheyknow works:

https://www.whatdotheyknow.com/body/swap

SWAP are the internal auditors to EDDC and South Somerset councils and (see below) their EDDC auditor has said that he has not examined EDDC relocation figures “in depth”.