Agenda item

4.35 p.m.

Report by Corporate Director for Commercial Development, Assets and Investment and Corporate Director for Customers and Organisational Development.

The public should be excluded during consideration of Annex 3  because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following categories prescribed by Part I of Schedule 12A to the Local Government Act 1972 (as amended):

3.        Information relating to the financial or business affairs of any particular person (including the authority holding that information)

It is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, in that such disclosure would be to the detriment of the Council’s ability properly to discharge its fiduciary and other duties as a public authority.

The report sets out the conclusion of a successful challenge from an existing contractor as a result of the parking enforcement procurement award process.

The Audit & Governance Committeeis asked to:

(a)         Consider the management response and action plan resulting from the Marston Holdings Ltd case, as detailed in this report and Annex 1;

(b)         Comment on the improvements highlighted in this paper; and

(c)         Note the thematic findings following the review.

Steve Jorden, Corporate Director for Commercial Development, Assets and Investment introduced the report which followed the successful challenge from an existing contractor as a result of the parking enforcement award process.  The Chief Executive commissioned an overarching fact-finding review of the procurement and subsequent litigation actions, settlement and costs associated with the challenge. 

Steve Jorden highlighted that this had been a complex case, with a thorough investigation and the purpose today was to take the Committee through the key findings of the investigation.

Claire Taylor, Corporate Director for Customers and Organisational Development introduced the contents of the report, setting out the independent investigation of which she was requested to commission by the Chief Executive following an internal review completed in February 2020.  Due to the seriousness of the issue, and the potential for staff disciplinary action, it was recommended by the Council’s external legal advisors that that specialist advice be sought, from an investigator who had previously undertaken similar reviews on behalf of the LGA and NHS.

Claire Taylor advised that her role was to agree the scope and terms of reference for the review, remain objective and ensure that the independent investigator had full access to all documentation and administrative support for that work undertaken.  The independent investigation was made more complex due to COVID-19 and the lockdown restrictions in place, however she acknowledged that given the complexity of the investigation it would always have been an extensive exercise.

Claire Taylor advised the independent investigatory work was concluded by June 2020 and set out the finding of the review including that the nature of the issues was systemic.

Steve Jorden followed by briefing Members on the key issues identified in the Marston Holdings Ltd case and the procurement and contract management review and improvements, this included a management action plan contained in Annex 1 and a thorough presentation detailing the Provision Cycle programme.

Officers responded to Members’ queries as follows:

·         The issue was communicated to the relevant Portfolio Holder and the Audit & Governance Committee would have been informed following the investigation.

·         The Constitutional Review will allow Members to review the protocol on how information is shared with Members, however the recognition of the role of governance highlighted by this Committee will be fed back into this review.

·         Full details of the key issues are outlined within the action plan, and Item 2 directly addresses the issues associated with procurement including guidance, management and governance, and the activity undertaken since the issue was raised.

·         Companies will also challenge contracts they do not wish to lose and since this challenge, the Council has not had any other successful challenges.

Councillor Tim Bearder, spoke to the Committee, reiterating Members’ comments stating that he failed to see how the Audit & Governance Committee could fulfil its role in ensuring they provide a risk management system role to be able to offer advice and recommendations to the Council so that it might improve.  He also stated that the Committee could not be assured that the matters had been addressed in detail and rectified for the future without seeing the full copy of the independent report. 

Claire Taylor responded that the report is a full HR led investigation and therefore cannot be released due to the confidentiality of the individuals investigated.

Anita Bradley, Director of Law and Governance supported this response, adding that because the report involves witness statements, to release that information would likely be in breach of the duty of confidentiality and the Data Protection Act and could potentially bring more legal action on the Council.  The correct information has been presented to this Committee whose role it is to take these points forward.

Councillor Jane Hanna, spoke to the Committee supporting the previous requests for access to the full report which would ensure greater trust moving forward if all facts were given full sight.  She highlighted that, as a member of Full Council, she has responsibility for information and questioned why there is non-disclosure to Members or this Committee, which is inconsistent with Part 8.1 Clause 23 of the constitution which requires disclosure even if exempted if relevant to the matter in hand.  She further questioned the timing of the payments and which clause in the constitution allowed these powers, and also the virement rules for spending outside of the budget and expressed concerns if other payments had been made without relevant visibility.  She concluded by asking for the clause in the constitution used to make the payment, not because the payment had to be made but to make sure that these powers have not been more widely used and to request greater visibility moving forward?

Lorna Baxter, Director of Finance responding to queries raised during discussions regarding where the settlement was included on the Council website, advised that the settlement was reached commercially in confidence and included in the restricted papers.  These sums were reflected in the Business Management and Monitoring Reports sent to Cabinet in February 2020 and the Outturn Report to Cabinet in May 2020.  The legal costs were included within the Community Operations part of the Communities Directorate and reflected in both reports when the settlement had been paid.

Councillor Nick Carter, Chairman of the Audit & Governance Committee thanked Members for their patience throughout these discussions and advised that his Annual Report will include wording that this item has been through the Committee to be picked up again at a future date.

In agreeing the recommendations, the Committee noted that it was on the basis that the decision on Item 13 above had relevant to this item.

RESOLVED to

(a)  Consider the management response and action plan resulting from the Marston Holdings Ltd case, as detailed in this report and Annex 1;

(b)  Comment on the improvements highlighted in this paper, and;

(c)  Note the thematic findings following the review.