On the 10 June a whistleblower claimed there was a lack of governance and internal controls within Folkestone & Hythe District Council. They made it clear there was scant regard for following the processes and procedures, as set out in the council’s constitution, the contract standing orders (CSOs) and financial procedures.
The process and procedures inform all council officers how things must be done and in what order. The constitution itself is nothing but a set of processes which Cllrs and officers alike must follow.
Then there are external processes and procedures they must follow and one of these is the Transparency Code 2014 and the updated 2015 version. According to this document which is legally binding on the council one of the processes is that:
Local authorities must publish details of every invitation to tender for contracts to provide goods and/or service with a value that exceeds £5,000
Also there is the Council’s Contract Standing Orders (CSOs) 2022, which also documents the process to be followed for all contracts. It states at page 9
The contracts register is maintained by the Procurement officers to comply with transparency regulations… It is designed as a central register of all contracts and includes such details as name of the contractor, the contract period, the value, brief description of the contract and RO. It is the responsibility of the Responsible Officer and Chief Officer to ensure that the data that is published is correct.
The contracts register ensures that F&HDC has clear records of contracts awarded. All contracts over £5,000 should be listed on the contracts register, even if it was not necessary to involve a Procurement officer in the purchase.
Note the transparency code uses must and the council uses should. The Code is the one which must be followed. There is a distinct difference between must and should. MUST is used when expressing an obligation or an unavoidable requirement, whereas SHOULD is more of a recommendation, or simply a desirable goal.
Also the council state in their Detailed Financial Procedure Rules at page 7
The Government has introduced new requirements on councils to report information to the public on their website through the code of recommended practice for local authorities on data transparency, which the council will comply with
And in the Constitution itself it states:
That all contracts of a value of £5,000 or more are included on the Council’s Contract Register;
The Constitution sets out the rules the Council must follow. But it’s clear that they don’t follow their own rules, in their own constitution; which is a breach of the constitution. The person responsible for officers and Cllrs adhering to the rules of the constitution, is the monitoring officer – Amandeep Khroud, who does nothing to ensure compliance with the constitution. As a lawyer, it’s clear, we honestly believe, she cannot be “trusted to the ends of the earth” [Para 15].
Compliance with the process and procedures of publishing all contracts of £5,000 [net] or more, is also a governance issue, which is part of the remit of the Audit & Governance Committee. This is something the internal auditor (EKAP) and External Auditor (Grant Thornton) must check during audits of the council, as it’s a governance issue, and report on to the committee.
The Council’s contract register – once duplicates are taken out show 367 companies who have either had, or have a contract with Folkestone & Hythe District Council.
However, The Shepway Vox Team can reveal approximately 500 suppliers who’ve had contract above £5,000 (net) or £6,000 (gross) do not appear on the contracts register.
A simple data matching exercise, we and two others undertook show there are more than 500 contracts not on the contracts register which are above the value £6,000 (gross). That’s a lot of contracts which the council have failed to declare and publish over the last eight years.
It’s quite clear the whistleblower back in June had a point when they said departments operate in silos. It’s clear there is a lack of communication between the procurement team and the responsible officers placing the contracts above £5,000 (net).
To cite just three examples, of contract’s let, but which do not appear on the contract register, we begin with the new Santa Maria ship built in the award winning Lower Leas Coastal Park.
The contract was procured, the ship installed, and and a payment of £51,745.73 [gross], was made to Eibe Play Ltd, on the 24 May 2022, according to the council’s payment data.
All tickety boo, the kids who use it are happy, the parents are happy, and the council have provided a play ship to help in kids play development – wonderful. However, there is nothing on the contracts register which shows Eibe Play won the contract and its clear the value was above £5,000 (net).
Eibe Play Ltd have done nothing wrong. They were hired, did the work and left. The Council have not complied with their own Contract Standing Orders, nor the requirement to be transparent as per the transparency code. Process and procedure are important and they matter. They are there to prevent the council from appearing to do something nefarious. They are there to prevent damage to the Council’s reputation.
As an aside, four people have been suspended for non-compliance with CSOs and financial procedures. We are certain the council MUST suspend more, because it’s clear its not just these four who’ve failed to follow the processes and procedures. Might the Council explain why this hasn’t happened, or are the four to be the sacrificial lambs upon the altar of hypocrisy?
Also how is it they have not suspended the monitoring officer – Amandeep Khroud – as she has failed to ensure the rules of the constitution are followed?
Now the man responsible for the Procurement team, and the contract register at the Council, is Mr. Andrew Rush (pictured). He is the Chief Officer Place & Regulatory Services at Folkestone & Hythe District Council. [How come he hasn’t been suspended?]
He is responsible for talking to other departments to discover what contracts they have let, and those departments are responsible for informing him and his team. But like our whistleblowers has said, there are to many silo’s inside the council’s which frustrates communication between them.
Now for the second example, let’s take Streetspace Ltd, who are based at Unit P, Lympne Industrial Park, Otterpool Lane, Lympne.
According to the contracts register, they have been awarded one contract with the council, as is made clear on the contracts register.
However, according to the Council’s payment to suppliers data, they have received £62,759, for six contracts. Of these six contracts two would not show up on the Council’s contract register, as they are below the £5,000 (net) threshold (£6,000 with VAT). This leaves four contracts which must, but do not appear on the contracts register. As such the process, compliance and transparency issues arise again.
Once again, the failure to communicate between those responsible is obvious, and yet nobody gets suspended pending a disciplinary hearing like the scapegoated four have been.
Again we stress Streetspace Ltd have done nothing wrong. They were contracted to do the job, did it and left. The issue is solely with the council for its lack of following the process and procedures. Its lack of compliance with the contract standing orders and transparency issues.
For the third example, we’ve chosen Brighter Homes. It’s clear from the payment to supplier data publicly available, the council have paid Brighter homes £81,873. Of all the payments below five exceed the threshold of £5,000 (net). Remember the council give the gross amount, £5,000 plus 20% VAT = £6,000. So all payments above £6,000, there should be a corresponding contract on the contracts register.
But yes, as you no doubt guessed correctly, these five contracts do not appear on the contract register, as is clear below. And we stress it’s not Brighter Homes at fault, they’ve done nothing wrong.
Now all this amounts to a failure of governance, of compliance, of failure to follow processes and procedures and a failure of transparency.
Our council have failed to publish all eight years worth of procurement card data. They’ve failed to publish all the contracts above £5,000 (net) on the contracts register. They failed to publish the accounts within the required deadline. Once is a mistake, twice is a pattern, three times is a habit and it’s clear many officers have fallen into bad habits, regarding contracts being placed on the contracts register.
Processes and procedures matter. The fact council officers have cut corners now puts them in a position where they appear to be potentially lining their own pockets at taxpayers expense. It’s time for them to learn, how to communicate, as the contracts register matters. It’s long past time the monitoring officer should monitor, for if she hasn’t realized, she surely must now, compliance and transparency matter.
The Shepway Vox Team
Journalism for the People NOT the Powerful