Agenda item

Report of Internal Audit Manager and Head of Environmental Services

Committee received the report of the Internal Audit Manager and Head of Environmental Services, which provided details into the conduct of the Hala Flats Pebble-dashing contract, with particular reference to the costs of the work and the value for money obtained. 

The report had been prepared to address questions raised by Cabinet and members of Budget & Performance Panel (B&PP) and points raised by other Councillors following the issuing of the internal audit report.

Members were advised that in July 2007, Cabinet had given approval for Council Housing Services (CHS) to develop a three to five year partnership with an external partner for the delivery of the Council Housing Capital Programme.  The work was to be split between the Council’s in-house Repairs and Maintenance Service (RMS) and the external partner, Herbert T. Forrest (HTF), who had been appointed following a competitive tendering exercise to deliver the Council Housing Five-Year Capital Programme, commencing on 1^st April 2010.

Committee considered the report’s response to questions raised by Members in the following areas:

• The form of partnering contract used;
• Pricing and payment mechanisms;
• The Hala pebbledashing project and leaseholder charges;
• Training;
• Quality of work;
• Preliminary costs; and
• Benefits of the partnership.

Members were advised that the PPC2000 was a standard form of partnering contract already in use by the RMS for other programmes (Rota Painting and Gas Servicing), and provided an appropriate framework for the partnership.  Whilst the PPC2000 was designed to cope with complex, project-based and multi-party arrangements, it was also suitable for a simpler client and constructor relationship.  Regarding the scope of the agreement, Members were advised that HTF had not been required to carry out pre-construction work and had not been paid for any.

A key feature of the PPC2000 contract was the integration of members of the partnership and a team-based approach to the project.  The Audit review suggested that whilst the scope for integration and sharing was limited under a two party partnership, each team member had been given clearly defined roles and responsibilities.

Members were advised that Internal Audit had found no evidence that any of the circumstances applied under which the Council could contractually seek to terminate the agreement.

Set out comprehensively in the report, and considered at length at the meeting, were details relating to the pricing mechanism for the partnership and leaseholder charges, together with information, which Members had requested, regarding costs per property for work carried out on the Kingsway Estate by VMC Developments Ltd. as part of the 2009/10 programme of works. 

Members were advised that Internal Audit had not encountered any evidence to suggest there were any difficulties or shortcomings regarding the measurement and pricing of the Hala re-rendering project.  Sufficient evidence had been produced for Internal Audit to conclude that the RMS officers’ management of the projects demonstrated appropriate levels of diligence and professionalism to protect the Council’s interests and secure value for money. 

It was reported that training, including a workshop session, funded by HTF, had been scheduled for Council and HTF staff, and appropriate arrangements had been established to monitor the quality of the work and identify and remedy any defects.  Working practices would be reviewed to ensure that future arrangements were as efficient and effective as possible.

It was proposed by the Chairman and seconded by Councillor Newman-Thompson:

“(1)      That, having considered the report and appendices in detail, and having had the opportunity to raise concerns with officers at the meeting, Members are satisfied that sufficient assurance has been provided regarding the RMS partnering contract and the outcome of the Hala Flats pebbledashing project, and that no further action or analysis be recommended to Cabinet.

(2)        That the Internal Audit Manager liaise with managers to develop an action plan arising from this report and that progress be reported to a future meeting of the Audit Committee in accordance with established procedures.”

Resolved unanimously:

(1)        That, having considered the report and appendices in detail, and having had the opportunity to raise concerns with officers at the meeting, Members are satisfied that sufficient assurance has been provided regarding the RMS partnering contract and the outcome of the Hala Flats pebbledashing project, and that no further action or analysis be recommended to Cabinet.

(2)        That the Internal Audit Manager liaise with managers to develop an action plan arising from this report and that progress be reported to a future meeting of the Audit Committee in accordance with established procedures.