Wirral vows to tighten up procurement after critical Audit Commission report

Wirral Metropolitan Borough Council has vowed to tighten up its systems and publish all its supplier contracts after a critical Audit Commission report suggested the local authority had potentially left itself open to external challenge over the award of a multi-million pound highways contract.

The local authority’s chief executive called in the watchdog in response to whistle-blowers' concerns about its Highways and Engineering Services Procurement Exercise in 2008.

An investigation had originally been carried out by Wirral’s former head of legal services but the group went on to raise their concerns under the Public Interest Disclosure Act 1998.

The concerns revolved around the governance arrangements that operated during the tendering process, and there were no allegations or evidence of fraud or corruption at any time.

The Audit Commission investigation directly addressed the whistle-blowers’ concerns and its key findings were:

• Officers’ and directors’ involvement in the in-house bid: “We found no evidence of any inappropriate influence on the outcome of the tendering exercise”
• Communication by officers with potential tenderers between the post-qualifying and tender submission stage: “We found no evidence that a meeting between the Director of Technical Services and another senior officer with a representative of the winning firm (Colas) influenced the outcome of the tendering exercise or was in effect canvassing by an individual firm”
• Declarations of interest: “Our review confirmed that a conflict of interest form was submitted by the Director but this was done retrospectively. We found no evidence of any information being shared as part of the association”
• The deliverability of the contract awarded to Colas: “There is no evidence that the rates in the winning bid will not be achieved but this can only be assessed through the ongoing benefits realisation process”.

The report added: “Our conclusion is that overall the council set up proper processes for the procurement exercise for highways and engineering services and there were many areas of good practice. There is evidence that the tender evaluation, information provided for decision-making and contract awarded were sound.

The Audit Commission said there was no evidence of impropriety, and the winning bid was “clearly better value for money” than the others in terms of both cost and quality. It added that this was a “significant achievement” considering the size, complexity, uniqueness and nature of the tender exercise.

But it went on to say that the whistle-blowers’ concerns were genuine. “Our review did highlight some weaknesses including a lack of clarity about separation of duties, inadequate records and documentation and the need to clarify corporate systems for raising and recording potential conflicts of interest,” the report said.

The watchdog also pointed to examples of a lack of proper consideration of or disregard of procedures, “for example meeting with potential tenderers during the period between the post tender qualifying stage and tender submission”.

These weaknesses had left the council and individuals open to an external challenge. “If there had been external challenge to the contract by an aggrieved bidder, the remedy could have led to substantial damages being paid and loss of reputation by the council.”

The Audit Commission called on Wirral to strengthen the importance of robust procurement policies and procedures and compliance with those procedures and governance.

The watchdog added that the local authority need to continually consider the adequacy of its whistle-blowing procedures and how they are complied with, so that individuals have confidence that issues will be fully investigated and lessons learned.

Responding to the report, Cllr Jeff Green, leader of Wirral Council, said: “Clearly, the systems the council had in place needed to be strengthened and that’s why I will make sure that the additional recommendations are enforced and that systems are improved. However, while this report highlights failings in systems, it also confirms that there is no evidence of wrongdoing.

“It is one of our priorities to open up the council to the taxpayer and I have also instructed the chief executive to start work on publishing details of all supplier contracts to enable the public to further scrutinise what we do.”