Council risks contracts rules breach

By Beth Sharp Friday 01 August 2014 Updated: 01/08 09:16

CONSULTANTS’ contracts have been extended by county council bosses by hundreds of thousands of pounds without authorisation.

An internal audit report highlighted in one case a consultant’s contract was increased from £14,200 to £117,309 and in another from £30,000 to £184,000 without the agreement of the cabinet member who is required to sign off payments over £50,000.

Auditors examined ten consultancy contracts earlier this year and uncovered a string of problems and concerns.

They included contracts being put in place with fixed costs and timescales which were then significantly exceeded without seeing if a better deal could be obtained.

One long running arrangement resulted in Worcestershire County Council paying between £636,000 between March 2004 and July 25, last year.

The report warns the approach risks breaching EU procurement legislation and could put the council in a vulnerable position should allegations be made over the arrangements.

It was also found the council could not demonstrate value for money and evidence of breaches of the Procurement Code.

While good examples of corporate policies and guidance to ensure sound processes were followed were found, the review uncovered many managers were unaware it existed and as a result did not comply with it.

Because of the ongoing nature of some of the consultants there is also a risk they may be deemed an employee for tax purposes which could leave the council liable for unpaid income tax, national insurance, penalties and interest from HM Revenue and Customs.

It was also found some money spent on consultants was not included on the official list published on the council’s website.

Coun Peter McDonald, leader of the Labour group on the council, called it the most damning report any county council had ever had in the United Kingdom and will table a motion at the next Full Council meeting calling for a full investigation.

“The report demonstrates clearly the cavalier way in which the council too frequently engages consultants and spends taxpayers monies without a care in the world and then tries to keep hidden the report to cover up its incompetency,” he said.

“If the council does not even know what it is spending its monies on, how can it be trusted with taxpayers monies.”

But Coun John Campion, responsible for transformation and commissioning, said as the council transformed it was necessary to bring in specialist consultants for specific jobs but their policy was to appoint them on a fixed term basis and for a fixed payments following a competitive tendering process. He said in general spending on consultants in Worcestershire was lower than neighbouring counties.

“As the council transforms into a commissioning council we are able to negotiate even better value from consultants now than previously.”

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