Report Exposes Why Council Leader Called Police

A MAJOR investigation into financial practices at Thurrock Council has exposed irregularities that could leave the council facing a multi-million pound fine.

The investigation centred around the contracts for the construction/refurbishment of three schools in Thurrock: West Thurrock Primary, Tudor Court and Ockendon School, valued at £11 million in total.

The investigation was triggered after then Council Leader Terry Hipsey and Interim Chief Executive Mike Rowan made a complaint to the Economic Crime Unit at Grays Police Station.

The police “investigation” found insufficient evidence to proceed. Cllr Hipsey then ordered an internal investigation and called in auditors, Pricewaterhouse Cooper (PWC).

The report details a catalogue of errors and omissions over a three year period in the process of tendering and finalising contracts with respect to the three schools.

The report makes for grim reading but it could get worse if the EU decide to take action as well as any companies involved who may feel aggrieved.

PWC warned that the system at present has several pitfalls that in its present form could lead to” “control processes being deliberately circumvented by colleagues.”

However, PWC found frustration after frustration as reams of vital paper work went mysteriously missing leaving more much of their investigation at a dead-end.

The key parts of their reports are:

1.NON-COMPLIANCE OF KEY EUROPEAN UNION LEGISLATION

When contracts exceed a certain amount (£3.5 million) they are required by law to go out to the EU for tender. This requirement cropped up in the news recently when Basildon Council were given the green light to evict from the Crays Hill Traveller Encampment. The process of recruiting bayliffs may take some time as they have to, by law, put it out to EU tender.

PWC noted that there was no reference made nor any evidence in the files that Thurrock Council adhered to the rules

2. MASSES OF DOCUMENTATION MISSING.

The biggest frustration for PWC was the missing documentation. This is best illustrated by the:

STRANGE CASE OF TUDOR COURT PRIMARY

Tudor Court Primary is situated on Bark Burr Road, Chafford Hundred. The contract to refurbish the school went to Forest Gate Construction at a contracted sum of £3.115 million (no need for EU Procurement Rules)

The paper trail began on the 1st January 2007 but between that day and the day PWC came in, the investigators found very limited documentation.

PwC informed the council that there is:

1.No original copy of the tender.

2. No letter of intent.

3. No letter of acceptance.

They also found that some correspondence was not replied to for  periods of up to six months.

3. CONTRACTS SIGNED BY UNAUTHORISED OFFICERS.

PWC reported that one letter of intent was signed by the then Head of Lifelong Learning, Stuart Freel.

An officer at that level can only do so if a Cabinet member has been consulted by means of a written report. PWC could find no evidence of any such report or permission.

Mr Freel has subsequently left Thurrock Council and is now working for Central Bedfordshire Council.

4. THE SIDELINING OF VERTEX

Thurrock Council had outsourced many of their services to Vertex including procurement as part of their Strategic Services Partnership, a service that costs Thurrock Council millions of pounds. PWC found it strange that Vertex are not involved at all in the procurement service for these three contracts.

YourThurrock invited Vertex to comment on this but they have declined.

Thurrock Council instead used Davis Langdon for this process but once again, PWC notes that in one case, the company that they had recommended for the building work.

5. SENIOR OFFICERS SLAMMED

PWC notes that “There was insufficient challenge by other officers to the events that were occurring.” which begs the question whether officers were permitted to simply “go it alone” or indeed a law unto themselves.

Specifically, PWC report that the Department for Children, Education and Families knew that contracts were not authorised, this was highlighted to them by the Interim Head of Legal Services and the Council’s Contract Solicitors but no action was taken.

6. OCKENDON SCHOOL: BUILDERS GO BUST
The students at Ockendon School are returning to school. What should be a bright refurbished building is instead a building site. The company employed by Thurrock Council to under the £3.614 million refurbishment went into administration last month.

7. WEST THURROCK: TWO TENDERS DON’T MAKE A RIGHT

PWC wondered why there were two tender prices for the building of West Thurrock Primary School. The tender prices changed between August 2007 and December 007 to the value of £173,469,82 with no explanation given and certainly no documentation illustrates why.

CONCLUSIONS

The conclusions and warnings by PWC are very clear

a. The whole procedure could have a serious impact on the reputation of the council.

b. The system as it stood could leave themselves open for: “Control processes being deliberately circumvented by employees.”

c. A failure to comply with provisions can lead to award of damages.

d. The Council could be at risk that contractors may be perceived to have not received fair treatment in tender appraisals that could lead potential disputes.

At some time in the future, the Council will have to discuss this in an open debate. It is also clear that the new regime led by Interim Chief Executive Bob Coomber and his new Director of Children, Education and Families may put Thurrock Council on a far more professional footing.

The question will remain as to how many officers have been disciplined over this affair and if none have been, what is the explanation for this?

Pay-offs and departures may not be enough. There is still a distinct possibility that the police may come knocking at the door again or indeed a private prosecution.

There is also the question of how many school heads and senior leaders may quit the borough in disgust at the lack of leadership they feel they have endured over the past few years. For them, this may well be the tipping point. Ms Olsson may find her school building starts there.