COUNTY HALL: Audit must be widened

An open letter to Northumberland County Council chief executive.

Thank you for sending the terms of reference for the proposed external audit review of the civic headquarters relocation.

In my request for an external review I did provide a number of examples of facts and figures which, in the view of my group, call into question the idea that this project will provide any form of “value for money” for the council.

However, what you are proposing is mainly a review of the council’s committee processes and not a thorough and comprehensive look at the actual basis upon which the decisions have been made.

As you know, the decision making process for this project does go back as far as April 2014, when the options review was started.

It seems to the Conservative group that, even at that early stage, there was an inherent bias to relocating to Ashington, rather than having a structured view as to all of the possible options which may have been open to the council.

There was not an objective view taken as to the best geographical location for the headquarters of such a large organisation.

However, the auditor, EY, is planning to narrow the focus down to looking at only the latest cabinet papers from November 19, 2015. I do not find this acceptable.

Also, I see that the auditor is proposing to conduct interviews with council officers only and that councillors are to be denied access. This can hardly be described as a fair and transparent way of undertaking the audit.

The council’s officers are there to carry out the work of the council according to the political direction of the ruling Labour administration. So, although I have respect for their professional attitude, it is highly unlikely that an unbiased view will be presented.

That is why I did specifically request a meeting with the auditor to “review all of the information line by line”.

It is clear that there is no intention to proceed in this way, thus calling into question whether this external audit can ever be seen as being either comprehensive or even-handed.

Much has been made, both in the council’s justifications to the cabinet and in the public pronouncements of the Leader, of the so-called “business case” and attempts to show financial savings.

My request is mainly for the external audit to challenge some of the more questionable facts and figures which have been used to build up the financial model.

However, it is quite clear that the auditor is going to ignore the essential core of my request when it is made clear in the EY Programme of Work: “Please note that we will not audit the integrity of this model as part of this process”.

I am sure that any reasonable person will see that this is not acceptable.

This is not just another council decision. This is a major relocation for the council, as well as a capital spend of at least £40m.

So it is only reasonable and expected by the public that every single part of the business case and financial projections is sound and presented in a fair and unbiased way.

In my career I have been involved in various business projects involving capital investment and I have had the experience of justifying major capital projects to potential funders.

I can tell you that the case presented so far for this £40million project is so full of inconsistencies that it would not even get a hearing from any bank.

In order to make progress there are the following matters to be covered:

1. A meeting between any concerned councillor (or at the very least the leader of each political group) and the auditor.

2. An alteration of the terms of reference for the auditor to report on the entire “business case”.

3. A full legal opinion as to whether the Teckal exemptions to bypass EU procurement rules apply in this instance.

4. The time-frame of the audit should be extended so that the auditor can produce a full detailed report which the council can rely on. 

The hopes of the public have been raised that the council would be conducting a proper review and there will be extreme disappointment and reputational damage to the council if the audit is viewed as insufficient or biased.

Peter Jackson

Leader Northumberland Conservative Group