In last 3 years Council spends £24.6m than it received in income

Folkestone & Hythe District Council’s accounts show they paid out £24,6m than they received in income over the last three years. Given what we know about missing purchase orders, missing invoices, purchase orders which have no invoices, and invoices which have no purchase orders, and payments which do not appear in Folkestone & Hythe District Council’s payment data, should you the residents of the district be concerned?

Today we want to look at one contract, that being the £60m (net) contract with Mears.

Our public face received 58 purchase orders, and 213 invoices, with regards to the Mears contract for 2021/22. He received this data by making a request for it while the accounts were open to inspection, by any member of the public who lives with the boundary of Folkestone & Hythe. He also received the Mears Contract Variation, applicable from Apr 2020

We make it very clear the issue at hand here is the missing data, and nothing herein is intended to suggest or imply that Mears have engaged in illegal or improper conduct. 

On a cold Wednesday at the end of March 2010, when Rude Boy, by Rihanna was sitting at No 1 in the charts, the contract with Morrison Facilities Services Ltd began.  It was a “responsive repairs and maintenance contract for maintenance of residential properties owned by Shepway District Council“. The value of the initial ten year contract was £40m (net). In 2013, Mears bought out Morrisons and took over the contract. Two extensions to the contract were available, one for 36 months and another for 24 months, bringing the length of the contract to 15 years. It will need to be re-tendered in the near future given the size and and length of time securing such a contractor takes.

The Council began publishing their payment to suppliers data in April 2011. They began publishing their purchasing order data in April 2016. The purchase order data should by law reach back to the 31 October 2014, when the Transparency Code became mandatory. But this being Folkestone & Hythe District Council, the data does not go back that far. Transparency is not a subject the Council like to discuss much, or even comply with when legally necessary, as the facts and published information make very clear. 

It is a shame we have a monitoring officer who failed to ensure the Council comply with its legal responsibilities in 2021/22, as well as a former s151 who failed to ensure strong internal controls. What’s worse is that the current Chief Executive failed to ensure both her officers complied with the law and the Council’s constitution. The non-compliance with the Transparency Code also demonstrates none of them have regard for the concept of transparency. 

Between 1 April 2011 and the 31 Jan 2023, Mears according to the Council’s payment to suppliers data says they’ve been paid £51,067,498 (net). On must remember a year’s worth of data is missing. The Council only began publishing their payment data as of Apr 2011. So one can add another £4m onto this figure, as this is the average yearly payment to Mears. With this £4m including VAT, we reach the figure of £55,867,498 (net) but even this figure is wrong because we know there are missing purchase orders from the purchase order data and missing invoices and missing sums from the payments to suppliers data. We know this because the data the Council sent to our public face while the accounts were open makes this abundantly clear. All we can say is the £55,867,498 stated, is the best figure we have.

The total contract value to date (Apr 2010 – Mar 2023) is  £55.9m (net) to Jan 2023. We cannot say if this figure has been surpassed as there is missing data

As there is missing data from the Council’s publicly available information, it is they who create, or rather generate the space for the plausible suspicion of wrongdoing within this contract. If they kept proper records and applied strong internal controls, the data would not allow the plausible suspicion of wrongdoing to arise. 

In 2019/20 the Council’s income was £80.4m and their expenditure was £90m. This means they spent £10m more than than earned. In 2020/21, their expenditure was £111m, and their income was £100.3m. In 2020/21 they spent £10.6m more than they earned. The Council’s income in 2021/22 was £93.8m. It’s expenditure was £97.8m. It is clear they spent £4m more than they received. 

In the last three financial years, the Council’s expenditure was £24.6m more than its income, according to their published accounts. We know there has been considerable sums overpaid on contracts. The P&R Contract. The Premier Roofing Contract, the M&R Contract, and many others we have documented. 

We know five individuals have left the building regarding the contract and financial irregularities, we as a team have raised, in the last two years alone.

The Council employ one counter fraud officer. One. Surely given the Council have paid out £24.6m than it has received, and given it is acknowledged the Council have overpaid contractors, the Council ought to be employing more Counter Fraud Officers. But they are not. It is the Council’s choice not to employ more counter fraud officers. Such a choice speaks volumes about the Council and their duty to safeguard the public pound.

Until they do employ more counter fraud officers, and until they start publishing all the data they must by law, they will not be able to shake off the perception of plausible suspcion of wrongdoing happening at the Council. Let’s not forget five officers have left the building regarding financial and contractual irregularities and not one, yes not one was investigated.

Let’s hope that a new administration in May will make sure more counter fraud staff are employed, because if it doesn’t, the perception of officers and contractors on the make will continue.

The Shepway Vox Team

Dissent is NOT a Crime