Statement: 12 July 2023
There has been an unsubstantiated accusation in the media that the Council’s previous highways contractor received overpayments during the contract period. This is not true.
In 2021, we recognised we needed to improve management of the highways contract and instigated an independent audit.
The auditors were clear they found no suggestion of fraud by the Council or the highways contractor. The reports highlighted a lack of recording keeping but the auditors were also clear there is no evidence to suggest work wasn’t completed. Whilst poor management of the contract is not acceptable, the auditors did not find any evidence that either party gained financially from this and were satisfied that actions to improve management oversight were happening.
Many of the identified issues were resolved in 2020/21 and we were transparent about our progress with reports published on our website, communicated to elected Members and progress monitored in public at two of our Overview and Scrutiny Committees.
The previous contract came to an end in April 2023. As part of a comprehensive approach to closing the contract, we reviewed a sample of invoices and took legal advice on the findings. This is standard practice in the closure of a commercial contract of this size. There were no just grounds for attempting to recover money as there was no evidence the contractor had been overpaid.
Following a robust competitive exercise, we have a new contract in place with a new provider. This contract is closely monitored and rigorous checks are in place.
Statement: 26 May 2021
We were aware that our contract with our Highways contractor (Ringway Jacobs) wasn’t working as well as we had intended, so we carried out our own internal audit of the management of the contract. We concluded that there were concerns which resulted in a ‘limited assurance opinion’ in January 2020.
In light of this, Ernst and Young LLP undertook a further audit. They particularly focussed on the risks of non-compliance with laws and regulations, fraud and irregularities in Highways contract management. The independent review findings were in line with our own. They did not identify any instances of non-compliance with laws, regulations or other irregularities in the contract management, but they did identify the need for improvements in contract management arrangements.
The Ernst and Young LLP report was discussed at the Council’s Audit Committee in March 2021. An external auditor’s report is normally confidential, however In the interests of transparency and public interest we have published it.
It is worth noting three important points:
- the report is a review of Council management of the contract and not a review of the contractor’s performance
- the report review period was some time ago (2019/20) and improvements have already been made to our management of the contract
- while there were clearly areas for improvement in the contract management, there are no suggestions that anyone was gaining from the identified poor practice.
The report also concluded that there is no fundamental problem with management integrity and commented that management were actively seeking to improve the contract management.
Prior to these audits, having already recognised we needed to make changes to improve our contract management, we restructured the team and added more senior level contract management to the team.
We have made demonstrable improvement in terms of how we manage the contract.
We have developed improvement plans to improve the procedural weaknesses and over half of the corrective measures are already in place and embedded in the service.
81% of the KPIs are now on target compared to just 38% the previous year, and the latest Future Highways Research Group (FHRG) research also shows a significant improvement in their value for money assessment of Central Bedfordshire Council Highways.
We are absolutely committed to learning from these reviews, improving our approach as well as being transparent about our progress. As such, we will soon be undertaking another audit to review our progress. Highways contract performance will be discussed at Sustainable Communities Overview and Scrutiny Committee in July and the next internal audit will be reported to Audit Committee later in the year.