Not long after the recent announcement of a Welsh Government-backed funding package to support repair work to properties affected by the home insulation scandal, Bridgend Council has published the findings of an internal audit report – carried out in 2018-19 at the request of former Chief Executive, Darren Mepham (pdf).
Critics of Bridgend Council’s handling of the scandal have long demanded to see it. While the right time to publish this was during 2019-20, it’s now out there at least – and it doesn’t make jolly reading.
A lot of it is stuff we already knew, but it provides more detail around why and how it happened.
No Paper Trail
The audit was “hampered by the lack of a clear audit trail and the unavailability of key officers who were involved at the time.” The investigation was based around information contained in just three folders. Auditors had to go so far as to request access to council officer emails to get additional information.
Darren Mepham was concerned by this lack of a paper trail and wanted a further investigation into whether there would “be any particular circumstances that would explain this”.
The report says:
“No evidence was found of any Scheme of Delegation forms being completed for the decision to award the work, so again, it is not clear how, when or who made decisions to request that Green Renewable Wales Ltd (GRW) would undertake the work.
“No contract, legal documentation, orders or any evidence of procurement activity in relation to these works was identified. As a consequence no evidence of any due diligence checks on the company or companies who were going to undertake the work has been found.”
No Value for Money
Common sense advice to anyone seeking to undertake an expensive piece of work is to get at least three quotes. That didn’t happen.
There was no competitive tender. This is despite evidence that three other companies expressed an interest in delivering the scheme between May-November 2011. These expressions of interest were acknowledged by the council with no follow-up.
BCBC’s original bid for Arbed funding was rejected by the Welsh Government in June 2012, but they continued to work with GRW with no procurement exercise or involvement by any other company.
With BCBC eventually submitting a successful bid, GRW received at least £309,201 from Bridgend Council via the Welsh Government. £49,376 was through Arbed and the remaining £259,825 was through ECO-BRI scheme (which involves energy companies and the UK Government).
In the invoices, GRW claimed £6,991 more under Arbed than was awarded in the grant. It was unclear “what relevance the supporting invoice….has to this scheme.”
It’s also unclear if one of the companies listed in the invoices – BSS Bridgend, reportedly based on Brackla Industrial Estate – ever existed. They charged VAT despite not being registered and there was no listing with Companies House (edit: it’s been suggested that this may have been a scaffholding company).
There was no specific guidance from the Welsh Government on procurement due to the tight timescales involved (as little as 7 weeks from award of funds to it needing to be spent). There was, however, an expectation that the council would oversee the project and inform residents.
The audit found that BCBC didn’t “retain adequate control and direction for spending of the grant” and that the building inspection programme on the work was unclear.
Conflict of Interest
Phil White did declare a personal interest as a director of Green Renewable Wales and Sustainable Building Services (one of the other companies involved). However, he stated that SBS wasn’t trading when the invoices (above) suggest differently. SBS shared a trading address with GRW.
Phil White refered to himself as the director of GRW in emails to council officers and approached the council in November 2011, saying GRW was a “not-for-profit” which had worked as a development partner of WalesCo – a Community Interest Company which was founded just two months earlier.
In December 2011, an officer confirmed that Bridgend Council was working with WalesCo (not GRW) to deliver the Caerau scheme, but there was no other information on how that decision was made. WalesCo was listed on two of the three available decision documents as undertaking the work (rather than GRW). This suggests the Welsh Government was misled over who was carrying out the scheme.
Phil White was also using both his personal and council e-mail in correspondence relating to the scheme and appeared to be acting as a middle man (described as “conduit” in the report) between the council, GRW and WalesCo.
It was clear in conversations with council employees and emails that they were well aware that Phil White was directly involved in all funding schemes relating to the Caerau project. However, officers “admitted that although they were aware of a link between GRW and the Councillor (Phil White), they did not know the extent of it.”
Conclusions
Internal auditors concluded that:
- Bridgend Council failed to properly follow several council policies in areas such as contract awards, the code of conduct for councillors and officers, financial procedures and management.
- No procurement process was followed and no due diligence checks were undertaken on the companies involved in the work.
- The building inspection regime in relation to the Caerau work is unclear.
- It’s unclear how, when or why key decisions were made in relation to the scheme.
- More than £300,000 was paid by Bridgend Council to a company that had a senior councillor as a director.
- There were several potential breaches of the Councillor’s Code of Conduct by Phil White (an Adjudication Panel for Wales hearing was scheduled prior to his death in October 2021).
The internal audit was shared with South Wales Police but they decided not to take any action, while Phil White was referred to the Public Services Ombudsman for his involvement (and, subsequently, the Adjudication Panel).
The report also fails to mention other key pieces of information. This includes:
- Moving Phil White between Cabinet posts (when he would have been directly responsible as Cabinet member for the Caerau scheme at one point).
- The dismissive attitude by trading standards towards affected residents.
- Discussions between two local councillors and BCBC’s Monitoring Officer about the poor standard of work, in which they were told it was a “private matter” between householders and contractors.
- The lack of any performance bonds or guarantees on the work.
