EXCLUSIVE: Million pound contract between Wirral Council and Enterprise Solutions (NW) Ltd for ISUS scheme was never signed

A blog post about the unsigned contract between Wirral Council and Enterprise Solutions (NW) Ltd for the ISUS (Intensive Startup Support) Scheme

Million pound contract between Wirral Council and Enterprise Solutions (NW) Ltd for ISUS scheme was never signed

In my previous post on a Freedom of Information Act request I made to Wirral Council I stated that it would be one of a series of blog posts on interrelated topics, this is the second on audit rights.

Each year (this year it was from 15th July to the 9th August as you can read from this notice published on Wirral Council’s website), anybody can inspect the accounts for Wirral Council for the previous financial year and any books, deeds, contracts, bills, vouchers and receipts. This is a right the public have enshrined in legislation. If this person is also someone who can vote in the Wirral area they also have a right to make objections to the auditor (which in Wirral Council’s case is Grant Thornton UK LLP (previously it was the Audit Commission)).

One of the areas I was interested in is to do with Nigel Hobro’s question to Cllr Phil Davies at the last Council meeting and the Grant Thornton report into the Business Investment Grants program. The end of Cllr Phil Davies’ answer to Mr. Hobro was “Errm however if it turns out that err others have been affected similarly since the report came to us I’m happy to ensure they’re properly investigated and indeed if there are any further evidence of wrongdoing or the irregularities of accountancy methods brought to my attention, then errm I am errm willing and indeed I make a commitment to refer those to others.”

On the 17th July I requested the following (using the above audit rights) “I’d also be interested to see and have a copy of any contract Wirral Council has with Enterprise Solutions (NW) Ltd” and on Tuesday afternoon (20th August) I was invited along to receive it (I’ve since scanned in and links to all of it are at the start of this blog post). It is for the ISUS (Intensive Startup Scheme) side of the business grants program and covers “awareness and development workshops”, monitoring the businesses that receive grants for three years after they receive grants at at least ten points over that three years and for “provision of specialist post start and aftercare adviser support”. Basically all pretty important things for Wirral Council to prove value for money for the taxpayer for these grants.

The contract states just under a million pounds of taxpayer’s money is involved and as a lot of records would rest with Enterprise Solutions (NW) Ltd requires them to supply information to do with the project including invoices, certificates, vouchers, books and records if required as well as keeping copies of documentation (and make them available for inspection) for seven years after the grants are awarded.

Section seventeen of the contract allows Wirral Council to vary the amount of grant payable, suspend payment of grant, withhold payment of grant or require Enterprise Solutions (NW) Ltd to repay some or all of the grant if the terms and conditions are breached at any time before three years after Wirral Council has last paid them the grant. It also requires Enterprise Solutions (NW) Ltd to if required to pay back money to Wirral Council to do so within fourteen days, otherwise interest at 3% above the base lending rate of NATWEST Bank plc will be charged.

However the most interesting bit of the contract is page ten. It’s not signed by Wirral Council or Enterprise Solutions (NW) Ltd. However invoices from Enterprise Solutions (NW) Ltd were paid and according to this Freedom of Information Act request Wirral Council also used Enterprise Solutions (NW) Ltd to produce business plans for organisations wanting to take over Council assets as part of the Community Asset Transfer program (in the request’s case New Brighton Community Centre).

In that FOI request the Council admits “there was no contract with Enterprise Solutions (NW) Ltd” and the fact that the one drafted between Wirral Council and Enterprise Solutions (NW) Ltd for the ISUS project (which according to the copy I’ve been given wasn’t signed by either party) how can Wirral Council prove it got value for money both to the public (and its auditor)?

Isn’t actually getting a signed contract in place, before you make any payments the kind of basic good governance that Wirral residents should expect from Wirral Council?

Is Cllr Davies’ commitment if he knows of “further wrongdoing” or “irregularities of accountancy methods” to “refer these to others” going to help matters? Referring the whistleblower’s concerns to Grant Thornton and Merseyside Police allowed Wirral Council to draw a veil over the matter and claim exemptions to legitimate questions asked by the public through Freedom of Information Act requests. Councillor Phil Davies is the Cabinet Member for Finance, he’s the elected politician at Wirral Council with democratic accountability to the public for financial matters. I clearly remember Cllr Davies saying last year that when he became leader that there would be more openness and transparency, not less.

Unless politicians (of all political persuasions) are willing to persistently ask difficult questions of senior officers at Wirral Council and put them on the spot during public meetings, instead preferring to be seen to be doing something by requesting reports (there’s the recent example of the case of the Grant Thornton report into the BIG scheme which was never published in full) I fear that all the talk about improved corporate governance and glowing peer reviews at Wirral Council won’t be believed by the public.

Audit and Risk Management Committee (Wirral Council) 15th April 2013

Audit and Risk Management Committee (Wirral Council) 15th April 2013: Proposed Revised Council Financial Regulations and Contract Procedure Rules – Draft for Consultation

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Present:
Cllr John Hale
Cllr Jim Crabtree (Chair)
Cllr Steve Foulkes
Cllr John Salter
Cllr Darren Dodd
Cllr Alan Brighouse
Cllr Geoffrey Watt
Cllr Joe Walsh
Cllr James Keeley

No declarations of interest were made.

David Armstrong, Assistant Chief Executive said he would speak to the first part of this agenda item on the Contract Procedure Rules. He said that when he had started at Wirral Council Chris Batman had given him three bits of advice. The first advice was not to go up the carpet on the main stairs, the second was not to reply to letters from councillors using their Christian names and the third was not to take things to committee that are only half-done. He said for the first time, he’d brought something which was a “work in progress”.

He said that Graham Burgess had asked Peter Timmins and himself to look at the financial regulations and Contract Procedure Rules. Mr. Armstrong said the set they had was “not user-friendly” or “easy to follow”. They had looked at the rules used by other authorities and had had a discussion as to whether they should modify the existing rules or look towards better examples from other local authorities. The latter option had been chosen.

Cheshire West and Chester’s had been chosen as they were “more straightforward and simple to follow”, that their rules had been “tried and tested for some time” and that it would make joint procurement (with Cheshire West and Chester) easier too. For what happened in the rest of this meeting this link takes you to the correct part in the video.

A roundup of Wirral Council meetings: Sustainable Communities, Council Excellence and Audit and Risk Management

Roundup of Wirral Council meetings: Sustainable Communities (Biffa and bin collections, flooding, libraries), Council Excellence (overspends, Social Services debt), Audit and Risk Management (HESPE Action Plan, gifts and hospitalities procedures)

In a change to the more detailed format, below are brief write ups of three meetings this week.

Sustainable Communities Overview and Scrutiny Committee 29th January 2013

There was a long presentation by Biffa, followed by questions from councillors. The meeting also discussed recycling, dog fouling enforcement, flytipping (including a recent rise in asbestos flytipping), managing highway structures (bridges, culverts etc), libraries, Wirral Heritage Strategy, food hygiene ratings, no cold calling zones and climate change.

Councillors asked Biffa about the recent missed bin collections and how the new changes (winter tyres and snow shoes) affected collections during the recent cold weather. On food hygiene the Food Standards Agency website was highlighted which shows the star rating for the 1,698 food businesses on the Wirral. A councillor was surprised at the nearly two hundred businesses on Wirral with a one star (which means major improvement necessary) or two star (which means improvement necessary) rating, however most businesses had a rating of four or five stars.

The increased use of volunteers in libraries was discussed and the problem of some households in areas at risking of flooding having problems obtaining insurance was also highlighted.

Council Excellence Overview and Scrutiny Committee 30th January 2013

Most of the meeting was a discussion about Wirral Council’s finances including measures to reduce this year’s overspend and how overspends in the past had been paid for by one-off measures that wouldn’t be available in future years. The investigation into Social Services debt was discussed also.

Audit and Risk Management Committee 31st January 2013

The HESPE Action Plan provoked discussion at this meeting. David Armstrong gave a verbal update on it and said that he’d written to all directors and acting directors for an update over the dates in the plan and had received no correspondence to say that they wouldn’t be able to stick to the timescales. The Acting Director of Technical Services had written to him stating there had been no interest from the private sector in consultancy work.

The Action Plan was being monitored by Fiona Johnstone’s department and was going to the Improvement Board and Council Excellence committee as well as being incorporated into Concerto. He assured people of the focus on it and that the actions would be followed through. Cllr Ron Abbey referred to it as a pantomime, saying “Did he or didn’t he?” and asked how much it had cost? Cllr Foulkes said that similar matters were not the remit of their committee, that there’d been two contrary reports, the Audit Commission report and the Penn report. He wanted continuing dialogue with the whistleblowers which he thought was the best way to deal with the matter. Cllr Ron Abbey said he would take that on board. Cllr Foulkes said they needed to find the common ground between the points in the Penn report and the action plan.

Cllr Green welcomed the reassurance, but wanted tests that the actions had been carried out. He said they’d had a range of reports that lessons had been learnt and a culture embedded, so it was useful to have it in writing. He referred to project management problems and who was supposed to be in charge of the Project Board and referred to issues with clarity, responsibility and project management.

Cllr Brighouse said he broadly endorsed the remarks, but the Penn report was ongoing as the recommendations and outcome were still to be resolved and agreed. He said it was appropriate to have some discussion covering the issues and whether there were any governance implications but it was “wrong to pretend there was nothing there”.

The Chair, Cllr Jim Crabtree said there’d be a further report next meeting.

There was also an update given (again by David Armstrong) on proposed changes to the gifts and hospitality/conflicts of interest procedures for officers.

Audit and Risk Management Committee 26th November 2012 Part 1 Highway and Engineering Services Contract

Audit and Risk Management Committee 26th November 2012 HESPE (Highways Engineering Services) Contract

The Chair of the Audit and Risk Management Committee started the meeting with a one minute silence for two councillors who had recently died.

There were no declarations of interest and the minutes of the meeting held on 19th September were quickly agreed.

The first item was the report on the action plan in response to the District Auditor’s report into the Highway and Engineering Services Contract. Colin Hughes informed the Committee that it had been presented to Cabinet on the 18th October.

Councillor Foulkes asked for assurance that Wirral Council was in communication and there was a dialogue with the people who had blown the whistle on the contract?

Colin Hughes replies that he had not been involved personally but could make enquiries. David Armstrong said that when he had been Acting Chief Executive there had been a continuing exchange between himself and the whistle-blower.

Cllr Brighouse referred to Recommendation 14, he wanted them to spend more time looking at implementation which in the past he thought they hadn’t done as well at.

Cllr Abbey thought the timescale of January for Recommendation 20 (the review of Internal Audit) was not much time to get councillors involved.

Mark Niblock, Deputy Chief Internal Auditor said there was currently a review into the effectiveness of Internal Audit and the actions taken to address issues. Following the review a report would be brought back to the Audit and Risk Management Committee.

Cllr Abbey referred again to recommendation 20.

Peter Timmins said in order for councillors to be informed, there was preliminary work that needed to be done. He told them that they were currently sharing a Chief Internal Auditor with Liverpool City Council, who was working with their deputy Chief Internal Auditor Mark Niblock. Mr. Timmins said that they didn’t want to get sidetracked with detailed discussions, which were quite technical, but next month they would produce proposals and anything councillors raised would be answered.

Cllr Sullivan said that it worried him when he said it was too technical for the councillors, he said it was important that the councillors scrutinise before decisions were made. He said he had concerns that the scrutiny committees get reports on serious stuff, but all the decisions had been made and was concerned by being told it’s a bit too technical for councillors.

Peter Timmins responded that they would be bringing recommendations to the Audit and Risk Management Committee, he wanted to translate it out of “audit speak” and their intention was to engage fully and not to hide.

Audit Commission Report on Wirral Council (public interest report)

Public Interest Report written by the Audit Commission about Wirral Council’s procurement process for the provision of highway and engineering services in 2008/09.

There have been a number of readers interested in the public interest report published by the Audit Commission. Links to it and related material are below.

The 24-page report (as a pdf file) entitled “Wirral Council: Report in the public interest” . ED – 29th December 2013 This link previously linked to the Audit Commission’s website. However the Audit Commission is in the process of being abolished so the previous link now points to a copy of the public interest report hosted on this blog.

The Wirral Council press release about it dated 8th June 2012 ED – 29th December 2013 The press release relating to the public interest report is no longer available on Wirral Council’s website and merely returns an “Access denied” page.

A page on the Audit Commission website specifying the report is about Wirral Council’s procurement process for the provision of highway and engineering services in 2008/09 *This previously linked to a page on the Audit Commission’s website. However the page is no longer there as the Audit Commission is in the process of being abolished.

There have also been a number of press articles about it, Twitters etc… I’m pretty sure it’ll be discussed at the Audit and Risk Management Committee meeting on Thursday too, based on the tweet of a Labour councillor.

Million pound contract between Wirral Council and Enterprise Solutions (NW) Ltd for ISUS scheme was never signed

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