Auditors look at renewal failings

AUDITORS are to investigate Stoke-on-Trent City Council as part of an investigation into the spending by its regeneration body.

After "serious concerns" were raised about recruitment and procurement procedures by the North Staffordshire Regeneration Partnership (NSRP), regeneration agency Advantage West Midlands (AWM) has refused to release £500,000 of regeneration cash.

Auditors from KPMG will this week carry out a fresh inspection of the city council regeneration arm after an investigation revealed cases where consultants had been appointed without using guidelines set down by either the council, AWM or European funding rules.

Councillor Mike Barnes, pictured, has written to the council demanding that the matter be urgently discussed by members, although the council leader insists that the investigation has not affected most regeneration projects.

Mr Barnes said: "It highlights serious errors with regards to contracting without tendering, and in one instance paying a consultant twice for the same work. I am deeply concerned that this was never brought to the attention of any scrutiny meeting or any members, as far as I am aware."

He added the lack of tender process could create the wrong public perception.

The investigation into the workings of NSRP, charged with delivering £280 million of regeneration projects, emerged in 33 emails released under the Freedom of Information Act.

The paper trail reveals how KPMG was appointed to probe procurement and staff recruitment after AWM's own auditors were unable to complete a routine governance inspection of procedures at the start of 2009.

That investigation concentrated on the appointment of seven consultants on projects including the University Boulevard, the City Waterside East masterplan and City Waterside West.

It also looked into the records of two senior executives at the NSRP.

Investigators said processes prior to January 2009 "lacked transparency and scrutiny" and "failed to demonstrate how value for money has been achieved." It said: "Contracts were awarded without going to tender, at high day rates, and in one case a single tender contract was extended for work which was covered in the original specification."

The NSRP has agreed an action plan to ensure procurement processes meet legal requirements. KPMG investigators are to revisit the authority this week to review whether it has been put into practice. Until then, AWM has refused to release £500,000.

NSRP director of resources Peter Bates noted that the audit had been prompted by the investigations into corruption, which were shown to be unfounded, last year.

Mr Bates, writing in a letter seen by The Sentinel, said: "From a context perspective, the catalyst that prompted this review by AWM was the arrests of the chairman of the NSRP board, a private sector board member and as at autumn 2008 the Regeneration Portfolio Holder.

"As you will be aware all these three have subsequently being cleared by the police.

"The city council is the accountable body for the NSRP but this review really focused on the potential concerns that AWM had – given these circumstances – of their broader investment into North Staffordshire."

Councillor Brian Ward, cabinet member for regeneration, responded to a request for a comment from the council. He said: "As a result of the review an audit was carried out, which raised a number of recommendations which included improvements to procurement processes.

"At that time it was jointly agreed with AWM to draw up an action plan and review the recommendations six months later.

"The audit recommendations were reported to the NSRP's risk management and audit committee.

"It was jointly agreed with AWM to withhold a proportion of funding until a review of the recommendations had been completed. We have been able to continue with the vast majority of projects while waiting for the release of the funding."

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