Probe into work given to firms with undeclared links to officers and councillor
An investigation has been carried out into work given by Cotswolds District Council to businesses with links to its own councillors and officers at the Gloucestershire local authority.
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There are calls for answers over a case of a Liberal Democrat-led council awarding more than £80,000 worth of work to companies with alleged undeclared links to officers and a councillor.
A counter fraud investigation was launched after whistleblowing concerns were raised over procurement at Cotswold District Council (CDC) in October 2024.
The counter fraud and enforcement unit looked into allegations that three companies were engaged outside of the contract rules, according to a report presented at last week’s audit and governance committee meeting.
The concern was that three firms were targeted due to undeclared relationships/connections by those officers and the councillor involved in their procurement.
The council has told the Local Democracy Reporting Service they will not be commenting on the identity of any of the individuals involved.
One of the cases related to proposals received by the council for communications support.
A company was recommended by a council officer to be commissioned to undertake the work, the report states.
And the contract value of the proposals received from all the potential suppliers exceeded £25,000 – and as such a procurement exercise was required.
The initial proposal received from the firm, referred to in the report as Company A, did not provide an accurate assessment of the full contract value.
“It stated that the total value of services to be provided was £18,750 based on £18,000 for the ‘re-integration communications support project’ and £750 per day for the provision of an interim head of communications,” the report reads.
The day rate was quoted but not the number of days nor associated minimum fee.
This meant the contract sum for that company exceeded £60,000 and there should have been a formal procurement process in line with the law and council’s policy.
However, no procurement exercise was undertaken and there was a breach of contract procedure rules.
The procuring officer sought advice from the head of procurement on how to procure the communications support but not all relevant information was provided to allow them to give robust advice in line with the thresholds.
The investigation highlighted that key stakeholders such as legal services, finance and wider corporate leadership team were not consulted on the procurement of that company.
The company was listed on the council’s contract register but did not accurately reflect the actual value of the contract.
“This is misleading and did not accurately reflect the spend on Company A,” the report said.
“The value reflected on the register notably identifies Company A spend as below threshold.
“This could be interpreted as falsification of public records – the council appears to have misled by detailing that the contract was under £25,000.”
There was no contract with the firm, only their standard terms of service.
“This is in breach of the council’s contract procedure rules,” the report said.
“Once Company A was commissioned to provide the services it is not clear that adequate contract management was undertaken.”
A separate case involved procurement of rebranding work for the council.
The authority received three proposals, one was recommended by a councillor and another by a council officer.
A firm, referred to as Company B ,was appointed on the basis of quotations but it was not done in line with the council’s procurement processes.
Specifically, there was no award criteria specified, evaluation was undertaken by a single officer and was not checked independently prior to the award of contract.
A contract exists, signed by the firm, but it was not signed by the CDC. And legal services, finance and the wider corporate leadership team were not consulted on the procurement.
A “light-touch” rebrand of the council cost at least £20,000 and was criticised at the time by opposition councillors.
The third case involved the awarding of a contract to develop a people and culture strategy.
Proposals were sought from two companies and one firm was selected at a contract price of £30,000.
After a telephone call with a council officer, the contract price reduced to £16,000.
And the council used a contract waiver to appoint the firm, referred to as Company C.
The investigation highlighted that there should have been three quotes and not two, in line with the contract procedure rules.
“The telephone call from the council officer to Company C which significantly reduced the contract value could be perceived as bid tailoring to avoid procurement thresholds putting the council at risk,” the report reads.
“There is no contract. Company C confirmed a contract was not requested by the council.
“Payment terms were provided on the proposal. There is insufficient evidence to support the legitimate use of a waiver.
“The details of the contract were not listed on the contracts register.”
Conservative group leader Tom Stowe (C, Campden and Vale) said the counter fraud and enforcement unit’s findings into Cotswold District Council’s procurement processes are deeply concerning.
“Procurement processes are put in place to protect public money, ensure good value, prevent fraud and corruption, and aid transparency for companies supplying the Council.
“Due process seems to have been bypassed to award business via the “backdoor”, this is nothing short of scandalous.
“There needs to be an urgent investigation carried out by an independent external body into all the procurement exercises which took place.”
The council’s leadership team has reviewed the findings from the investigation and internal controls around procurement will be strengthened.
They have agreed an action plan which includes updating the contract register to reflect actual values for services provided by all suppliers and mandatory training for all staff.
Councillor Harris, said the issues raised in the report were brough to his attention during his last month as council leader when he was alerted that the council’s counter fraud and enforcement unit had been looking into potential breaches of procurement rules.
“I am pleased to learn that the inquiry is now complete and that the council is taking the appropriate steps, through a comprehensive action plan, to strengthen its processes,” he said.
“If the council’s statutory officers advise that any further independent assurance is necessary, I would of course willing engage in that process.”
The council is also introducing a procurement fraud toolkit for staff and all senior staff required to review and formally acknowledge the code of conduct.
Council leader Mike Evemy (LD, Siddington and Cerney Rural) said: “This should not have happened and must not happen again.
“While all the work involved was completed and paid for, it was not commissioned in line with the council’s procurement rules, so officers are unable to guarantee that value for money was achieved.
“I’d like to thank the people who raised their concerns and the officers who undertook a very thorough investigation, which led to publication of the report that was considered by the council’s Audit and Governance Committee on Tuesday afternoon.
“I am confident that council officers will deliver on their robust action plan which will prevent anything like this happening again.”
By Carmelo Garcia, local democracy reporter for Gloucestershire. carmelo.garcia@reachplc.com