Investigation reveals cost of council building project doubled without authorisation

Herefordshire Council has apologised unreservedly after a damning independent investigation found procurement procedures hadn’t been followed on a build project which doubled in cost.

The Council was leading on the refurbishment of Blueschool House to create a customer services hub that was to be shared with the Department of Work and Pensions (DWP).

The project was originally approved in June 2016, with a limit of £950,000 being set down. The cost had ballooned to £1.92m by the time the Council moved its central customer services team from Franklin House to Blueschool House earlier this month.

However the investigation found that approval had not been sought for the additional spending, and procurement processes had not been followed.

That included the contractor Kier starting on site before the contract was signed, and compensation events – asbestos was discovered on the site – costing more than £300,000 was approved by a council officer without the authority to do so.

The independent review by the South West Audit Partnership into the overspend had been requested by Andrew Lovegrove, who became chief financial officer at Herefordshire Council in March.

Lovegrove said the Council had “failed” to provide best value for money for taxpayers.

“It is disappointing for us all to find that some colleagues, however small in number, did not observe the correct procedures,” he said. “This is also entirely in contrast to Herefordshire Council’s performance managing its entire capital expenditure of £55.8m within budget, whilst delivering multiple projects successfully.”

The audit scope included the background to the key decision, the procurement of the contract, changes to the original scope of refurbishment work, an understanding of the escalation of costs and how changes to the contract and refurbishment were authorised.

The findings of the review were considered by the council’s audit and governance committee and its recommendations were approved.

The Council has originally said it would save £1.9m over the next 10 years by investing in Blueschool House, receiving rental income from DWP and saving on property costs for Franklin House.