To consider the report of the Portfolio Holders for Property and Waste and Childrens Services, Youth Libraries and Leisure.
Minutes:
Documents:
· Report of the Portfolio Holders for Property and Waste and Children, Youth, Libraries and Leisure Services
Discussion:
· A report had been considered by Scrutiny Committee A regarding governance surrounding the project. This report had also been circulated to Members of the Audit Committee prior to the meeting for information.
· Lessons learned had been contained within the Scrutiny report and Audit Committee were invited to add any further detail as appropriate
· Of concern was the length of time the project had been in development. The project had first been suggested in 2002 and the length of time in the intervening period had made continuity more difficult.
· A key date was May 2016 when agreement was given to proceed. Costs had increased (including the cost of steel) and highways and café fitting out had contributed to the overall increase in costs.
· The Portfolio Holder for Property and Waste had also been concerned when he took over the portfolio and he has raised many questions in the short period he has held the portfolio.
· The Chair asked if the final cost of the project was known – meetings were ongoing to define the final costs. The Committee challenged this but were advised that this was within normal parameters for this type of contract.
· The length of time the project had taken had contributed to this together with the lack of project management within the Council at the time of the project’s inception
· It was expected that more accurate, final costs would be available in two months
· The Committee were not satisfied and asked when estimates that were available would become payable. Projected claims were in the process of being challenged but there may be additional claims to consider.
· The project had suffered delays which were mainly due to information flows. The gaps in original estimates were also a legacy of poor information.
· Relationships with one of the contractors has improved. The Project Board had debated whether to proceed with the project but had agreed that the Authority was too committed to withdraw.
· The Committee were concerned that the project was going forward irrespective of costs. These were still to be determined but it had been considered that the risks of not proceeding were greater than those of proceeding.
· Ultimately the Cabinet will make the final decision when final costings are available. If the project were to be terminated there would be ongoing costs relating to the building, contractual costs, repayment of grants and compensation payments.
· Members of the Committee expressed concern at the ongoing, increasing costs whilst other services were being asked to make savings
· The Committee were aware of the serious reputational damage to the Council in addition to increased costs. Details of when decisions were made and by whom were requested. Members were advised that this was currently being prepared and would be available to Members shortly. Members asked if there had been any political or executive continuity.
· The Portfolio Holder was concerned that a project of this magnitude had insufficient available information.
· It was suggested that both Scrutiny and Audit had considered the project over the years – Audit Committee had not had any consideration of the project and Scrutiny had had limited involvement
· Members suggested that the Authority’s commissioning was not sufficiently robust in this case
· The Committee asked whether Internal Audit had been involved at any stage – they had not as the project had not been identified as a risk. Early intervention is key.
· The Section 151 Officer did not believe that terminating the project was an option at this late stage. The project had been complex and lessons learned should be transferrable to other large projects such as 21st Century Schools. A number of senior officers are now involved and robust discussions are ongoing. Recent months have seen significant improvements and greater clarity. Funding will need to be sourced from either borrowing (which will impact on the revenue account) or capital receipts.
· The Chair challenged whether a similar situation could occur with other Council projects – it was thought that there was sufficient evidence to show that this could not happen again. Many schemes have been successfully completed by the Authority.
· The WAO were asked if they should have an involvement in such a project. In response it was stated it was only necessary for the WAO to be assured whether the accounts were true and fair and that monies had been properly accounted for. There is a further requirement to review and respond to items of correspondence from the public relating to Council business. During the current year the WAO will assess whether there are any provisions or contingent liabilities for 2016/17. There has been no correspondence from the public. The Local Authority should consider how it manages and monitors budgets for significant projects and ensure that it is appropriately managing those projects where significant variances arise.
· Members expressed concern that lessons were not being learnt, with a requirement for proper accountability responsibility
· An independent report of the project should be commissioned
· The Portfolio Holder stated that he had had concerns about the project when he took over the portfolio but, following discussions and enquiries, was more positive about the current position
· It was noted that the facility in the future will be a Powys Cultural Hub – not just a facility for Brecon
· The Committee expressed concern regarding ongoing and future commissioning projects
Outcomes:
· The Audit Committee will undertake pre decision scrutiny of the report once final costs have been assessed
Supporting documents: