Tuesday, 12 February 2013

Trouble with Edinburgh procurement visibility

I'm sure you recognise that there's a responsibility on those looking after the public purse to demonstrate good stewardship. Does that apply with all money spent though?

I have come across a peculiarity when it comes to public bodies spending money which can be recharged back to individuals.

To help you grasp what may appear complex at first, some context is required. I apologise this may be a bit geeky, but try to bear with me. Just as important it may help you learn from the lessons of Edinburgh.

A council can serve a statutory improvement notice on a property owner and subsequently recharge the owner for any repairs carried out as a result of the owner's failure to carry out the repairs. Of course the owner can opt to carry out the work themselves, but sometimes the owner cannot be found in sufficient time and the council, therefore take on the role of agent, getting the work done and then pursuing the owner for the costs.

There are two potentially opposing pressures on the agent. One the need to get the work done as soon as possible to protect the property or neighbouring properties. The other the need to ensure that, acting on behalf of the owner (who may not be traceable), the 'price is right'. 

One way of trying to achieve those twin objectives is to put in place a framework agreement which can be drawn upon - not always as easy as it sounds. Of course not every council recognises the need to save the owner money or, if that money is not recovered, it is a cost incurred by the council and, as those un-recoupoed aggregated costs can up to a lot of dosh (in Edinburgh's case (£27m).   

I hope that sets some context. And so to the suggestions regarding Edinburgh reported today.

  1. If there is a lack of compliance with tendering procedures, and the council are unable to recoup the money, then surely that amounts to a public sector contract and questions of probity, public stewardship and and satisfying value for money objectives. 
  2. If there is a lack of compliance with tendering procedures, how can those owners, on whose behalf councils act as agents, be reasonably expected to pay an unreasonable cost?
  3. If the council initiate repairs which are not actually required, how can the real owners, on whose behalf the council act, be reasonably be expected to pay? If the owners can't reasonably be expected to pay, isn't that an unnecessary cost which the council therefore have to carry?
  4. If there are suggestions of non-compliance with tendering procedures, and unnecessary work being carried out, could that also lead to allegations of corruption to benefit those commission and carry out the work?
  5. If there is not a robust process in place to ensure that contractors invoices match contracted prices, who's to say that owners and/or council money has not been wasted?
  6. If a contractor is able to have unauthorised access to payment systems, how can it be demonstrated that they are the only person who improperly accessed the system, and that there is no malfeasance? 
  7. If internal audit reports are not available, who's to say there has not been something untoward taking place? 
  8. If contractors bid prices are shared with other potential bidders enabling under-cutting, that does not represent a cost saving but a breach of confidentiality and openness to allegations of corruption. 

  • Of course these allegations couldn't be made about any organisation you or I are linked to - or could they?
  • May be worth checking.

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