Jun 20 2012 By Liam Murphy
WIRRAL council faces new allegations that senior officers "hid" key information from councillors after another damning report from a local authority watchdog.
Just a week after the district auditor’s public interest report criticising the authority over a multi-million pound highways contract, it has emerged that another high level contract was mishandled.
The council's audit committee was told that senior officers knew Northwich UK was in serious financial difficulties but handed to carry out the work the company them the contract to carry out £750,000 repairs to the West Kirby marine lake without telling councillors of the problems.
Eventually, Jones Bros Civil Engineering, from Ruthin, completed the repairs after Northwich UK pulled out following the decision by its parent company, Irish construction giant Pierse Group, to wind it up in April 2009.
But according to the auditor's report, Wirral council officers had an external credit report in January 2009 "that highlighted significant financial concerns in respect of the original contractor and stated there was a very high likelihood of business failure".
However, they still recommended the council's ruling cabinet award the contract to the company.
The report by the district auditor continued: "There is no mention in this cabinet report ... nor any supplement issued following receipt of the credit report of the serious concerns regarding the financial status and the very high likelihood of business failure of the company.
"There is no evidence in the minutes of the cabinet meeting that officers informed members of the risks at the meeting itself."
"It also says legal advice was not sought until two months after work had started."
Deputy chair of the audit committee, Cllr Darren Dodd, said the case was "almost beyond belief". and that it had "common themes" with a much-criticised multi-million pound highways contract which led to a public interest report by the district auditor last week.
Cllr Dodd said: "Things were being hidden from councillors, it's almost exactly the same as what happened with highways. Why are we getting these reports regularly from the same department?"
Committee chairman, Cllr Jim Crabtree, said: "It appears they seemed to know the company was going bust."
Cllr Steve Foulkes said: "Members were not made aware of the credit unworthiness. – I do remember at the time people saying things like these are the only people who can do this job. I think Darren Dodd is right that there is some consistency in this, in that it's technical services again and it should be very worrying."
Borough solicitor Bill Norman told the committee it had been a "bad example of poor communication between departments", but said funds had been withheld from the company and the contract switched to another firm, ensuring the council "was not out of pocket". He added: "Clearly there are some lessons here."
A spokeswoman for Wirral Council said: "Work is ongoing to implement the recommendations made in the Audit Commission's Grant Claims and Returns report, as discussed by the Audit and Risk Management Committee on June 14.
"The report raises some familiar themes around governance, as other critical reports received by the council, and work is already underway to address many of the issues, particularly in relation to communications between councillors and council officers."