Updated 08:00 – 21/02/25
When examining the payment data for suppliers where contracts began before they were officially awarded, numerous anomalies emerge. These contract and financial irregularities were expected to be resolved, as all staff underwent training in contract and procurement management from February 2023, onward. Regardless of the training, the issues of following the correct processes and procedures persist at Folkestone & Hythe District Council.
Consider the case of L W Burt & Son Ltd, which secured a Heating Works contract for the council’s headquarters in Folkestone. The contract, valued at £5,573, was set to run from 8 July 2024 to 13 July 2024 and was officially awarded on 2 August 2024. As the value of the contract was below £10,000, it needed at least one written quote in
advance.
Despite this, payment records indicate that L W Burt & Son received £10,540 (including VAT) for the work. Notably, no payments were made to them after 13 July 2024. The data reveals that L W Burt & Son were paid nine times between April 2023 and March 2024. Even after deducting VAT of £2,108, the company received £8,433, which exceeds the contract’s awarded value.
Another example involves Lister Wilder, which began a contract with FHDC on 9 February 2024. The contract concluded on 8 March 2024 and was awarded on 12 March 2024, with a value of £11,340 (excluding VAT). However, there is no record of this contract, or any contracts with Lister Wilder, on the council’s contract register. Again this contract required At least one written quote in advance, no more.
Payment data shows that Lister Wilder received a total of £37,294 between April 2023 and April 2024, including a payment of £13,608 (with VAT), on 12 March 2024, the day the contract was awarded;
Cornerstone Chambers, according to the contract register, was awarded one contract by the council. This contract, which began on 1 April 2024, was awarded on 10 September 2024 and is set to end on 31 March 2025. The contract was for providing legal advice related to reclaiming social housing property, with an awarded value of £6,000 (excluding VAT). Again all that was required was at least one written quote in advance.
The contract register shows only one contract with Cornerstone Chambers, and that is the one above.
Cornerstone Chambers FHDC Contract Register 18/02/25
However, the council’s payment data shows that Cornerstone Chambers have received £85,547 between May 2023 and March 2024.
As the saying goes, once is a mistake, twice is a pattern, and three times is a habit.
Part 10 of the Council’s Constitution sets out the rules council officers must follow when purchasing goods, services and/or works. But as clear as day officers are NOT following the correct processes and procedures. Nor are they following Regulation 3 of the Accounts and Audit (England) Regulations 2015, which deals with – Responsibility Internal Control, or Regulation 6 of the same regs – Review of Internal Control System and makes clear the council must prepare an annual governance Statement 2023/24
At page 19, it states among other things:
7. Procurement and Contract Management:
7.1 Part 10 of the Council’s Constitution sets out the rules our officers must follow when purchasing goods, services and/or works. The Procurement and Contracts Management Team have undertaken a number of activities in the 2023-24 year to
improve governance and internal controls including:
An annual training session for all FHDC staff in procurement and contract management was delivered during the year. These training sessions focused on compliance, ethical procurement practices, and effective contract management. To enhance staff knowledge and foster a culture of accountability and excellence.
Regular reviews of procurement and contract management processes to identify improvements and ensure compliance with the Procurement regulations and contract standing orders (CSOs).
Staff then have been trained in procurement and contract management. Yet staff are not applying with these processes and procedures, as set out in the contract standing orders, in Part 10 of the Constitution.
In July 2024, the Internal Auditor of the council, East Kent Audit Partnership released Report Number AuG/24/09 to the Audit & Governance Committee.
At 3.2 of the document it states:
Finance Officer’s Comments –
Responsibility for the arrangements of the proper administration of the council’s financial affairs lies with the Chief Finance Officer. The internal audit service helps provide assurance as to the adequacy of the arrangements in place. It is very reassuring that EKAP have given positive feedback on their overall assessment of
the Council’s system of internal controls for 2023-24, stating that there were “no major areas of concern”.
What we find strange is that nearly £1m worth of contracts were started before they were awarded. Alarmingly this is deemed not to be a major area of concern.
The report goes onto say:
Review of the Internal Control Environment
4.1 Risks :
During 2023-24, 139 recommendations were made in the agreed final audit reports to Folkestone & Hythe District Council. These are analysed as being Critical, High, Medium or Low risk in the following table:
Critical recommendations also relate to noncompliance with significant pieces of legislation which the organisation is required to adhere to and which could result in a financial penalty or prosecution. Such recommendations are likely to require immediate remedial action and are actions the council must take without delay.
High – A finding which significantly impacts upon the operational service objective of the area under review. This would also normally be the priority assigned to recommendations relating to the (actual or potential) breach of a less prominent legal responsibility or significant internal policies; unless the consequences of non-compliance are severe. High priority recommendations are likely to require remedial action at the next available opportunity or as soon as is practical and are recommendations that the council must take.
55% of the recommendations were considered to be critical or high risk regarding the internal controls within the council, including non-compliance with significant pieces of legislation… which could result in a financial penalty or prosecution, but the council’s interim finance officer, Lydia Morrisson (pictured), believes these are not “major areas of concern”.
Despite all of the above, and the reassurances from the Chief Executive of the council, Dr. Susan Priest (pictured), in December 2022, public funds are being spent in violation of the council’s constitution. Additionally, contracts are still being awarded after their start dates, further highlighting the ongoing issues with internal controls of contract and procurement management with Folkestone & Hythe District Council.
We must not forget, the Whole of Government Accounts for 2022/23 could not be signed off by the National Audit Office. This is the first time it has ever happened. The cause – Local Government missing data which has continued to worsen due to systemic issues. Hardly suprising given poor internal controls.
And finally, what the above shows is, the Peter Principle – which observes that people in a hierarchy tend to rise to “a level of respective incompetence“, is alive and well at Folkestone & Hythe District Council.
The inclusion of a entity in this blog post is not intended to suggest or imply that they have engaged in illegal or improper conduct.
The Shepway Vox Team
Dissent is NOT a Crime
