Councils agree action plan for waste partnership after £2.8m overspend

An action plan is to be implemented at the Dorset Waste Partnership to improve its governance and financial management after reports into a £2.8m overspend and breaches of legal requirements in relation to the tendering of vehicle hire business contracts.

Councillors from seven Dorset councils who sit on the partnership’s joint committee (DWP) agreed the 37 measures set out in the plan.

A separate report – from Jonathan Mair, Head of Legal and Democratic Services and monitoring officer at Dorset County Council – found that there had been a significant breach of both contract procedure rules and legal requirements at the DWP in relation to vehicle hire business with a very high value.

Mair’s report revealed that vehicle hire business had been awarded to two contractors without any compliant tendering process. One company was awarded business with an aggregated value of £765,000 and the other was awarded business with an aggregated value of £808,000.

“For the first company it seems that no tendering process was followed at all,” Mair wrote. “For the second company DWP colleagues sought to use a legally compliant framework contract established by the Eastern Shires Purchasing Organisation (ESPO) but they went about this in a way that resulted in an unlawful direct award without there having been any competition.”

He also revealed that:

• In addition to the unlawful direct award of vehicle hire business it had also emerged that the way in which one specific contract for consultancy services (worth £90,000 per annum) was awarded also amounted to an unlawful direct award;
• The DWP had failed to procure hire vehicles via the county council’s purchasing hub, resulting in the county council being unable to notify the national Motor Insurers Information Centre about the insurance arrangements for some vehicles. “This failure to notify is a criminal offence. This is an offence committed by the County Council and not by any individual member of staff.”

Urgent steps needed to be taken to replace the unlawful contract arrangements with ones that were legally compliant and this must be done “at the earliest opportunity”, the monitoring officer’s report said.

Mair said Dorset Procurement was working with DWP managers to ensure that this happened, and that he had been told that the county council (host authority for DWP) would be in a fully compliant position by May 2015. The consultancy contract has already been brought to an end.

The three main reports into the partnership following the overspend were an internal audit led by the South West Audit Partnership; an efficiency review by Local Partnerships (co-owned by the Treasury and Local Government Association); and a strategic review by consultants WYG.

The 37 points in the action plan include earlier warning to councils of financial risks that may result in overspends, clearer allocation of budget responsibility to key staff, more training for budget holders to better manage and monitor budgets and improved risk management and business planning.

Steve Mackenzie, chief executive of Purbeck District Council, has taken overall responsibility for ensuring the action plan is delivered.

Mike Harries, chair of the DWP’s Management Board and the county council’s Director for Environment and Economy, suggested that the partnership had met most of its key aims, but it should not be the case that the service was delivered at any cost.

He said that the reviews raised “significant concerns around the efficiency and effectiveness of the partnership”, which the councils wanted to see urgently addressed.

Cllr Tony Alford, chair of the DWP joint committee, said: “Partner councils are clear that the failings highlighted by the reviews are unacceptable. Together, we are committed to putting this right and providing an efficient, business-like waste and recycling service to our residents.”

He added: “We must also recognise that the DWP has successfully met many of its aims, including increasing recycling and reducing landfill, and that the majority of residents also say they are happy with their service.”