A special team of accountants have been appointed to investigate Liverpool Council's £16 million energy disaster - as the council's finance chief says reserves will have to be used to bail out city schools caught up in the scandal.
Council bosses are under increasing pressure over revelations that a series of calamitous errors within the local authority have led to an extra £5m being added onto its own energy bill, with a potential total extra hit to the city of £16m impacting schools and the local fire service. An explosive meeting of the ruling Labour group on Monday night saw councillors calling for cabinet members and senior officers to consider their positions.
On Friday, the ECHO revealed the shocking litany of mistakes, including how council officers failed to inform the mayor or cabinet members that the energy supplier it was agreeing to extend its contract with, Scottish Power, had stopped supplying commercial customers. As a result, no contingency plans were made and the council was automatically placed onto a far more expensive deal.
Government commissioners, already in place at the council following a damning inspection last year, called for a full investigation into the situation, a call backed by the council's chief executive and mayor. Today the council announced that international audit, tax and advisory firm Mazars Accountants will carry out the probe.
A spokesperson for Liverpool City Council said: “Following a request by the commissioners for an external investigation, into the council’s contract negotiations for the procurement of an energy supplier, the city council and the commissioners have today jointly instructed Mazars Accountants to carry out an independent audit. This audit is to be completed by the end of the month. The findings of this report will be made public, except any confidential personal information.”
READ MORE: Anger, rows and resignation calls as Liverpool Labour group at war over £16m energy 'catastrophe'
Earlier today, the council's deputy and finance chief Jane Corbett called the situation 'a disaster' and said the council would have to dip into its own reserves to bail out city schools that have been caught up in the energy mess. Cllr Jane Corbett told BBC Radio Merseyside: "There is now a £3.9 million shortfall for the schools, we can't expect the schools to pick this up, it was our mistake, this is children's education we are talking about here."
At a fractious meeting of Labour councillors on Monday night, calls were made for cabinet members to resign over the scandal - with fingers pointed at Deputy Mayor Corbett, who has responsibility for finances. But in today's BBC interview she questioned why she was not informed of the situation regarding Scottish Power by council officers as soon as they knew.
She said: "I am the cabinet member for finance, I get weekly briefings. On March 4 I was chairing the cabinet meeting and just before the cabinet meeting, the officers were told Scottish Power said no, we can't give you a contract. At that time, what they could have done is put a piece of paper in front of me and say this report doesn't work anymore, but they didn't, so that needs to be looked at, what on earth was happening there." She was not informed of the situation until March 23.
But Cllr Corbett said there is no getting away from the gravity of the situation, adding: "This is an absolute disaster. This is on us. Yes we have messed this up big style. It's appalling and we will get to the bottom of it."
Asked if she would consider resigning her own position over the debacle, She added: "The mayor picks me, I'm deputy mayor, that's up to the mayor. I don't think it's helpful, we need to do the work now. That's up to the mayor, but we've got to move forward."
Also speaking to the BBC, Cllr Alan Gibbons, one of a number of Labour councillors who recently left the party in opposition to its budget cuts, said Cllr Corbett and others should consider their positions. He said: "These are repeated errors and this is a complete failure of governance, where are the checks and balances? It's no use saying nobody told me, this has got to be a series of in-built failures, running through the whole council system.
"I think people are more than disappointed, I think they are incensed. People have got to take responsibility for this and that means considering their positions, this is a catastrophic amount of money. The Chief Executive, Jane is the Deputy Mayor in charge of finance, these are the people who have to take the responsibility."
Cllr Gibbons, who is now deputy leader of then newly formed Liverpool Community Independents group, repeated suggestions made by other groups that the budget the council set in March may now need to be looked at again. He said: "We broke from the Labour Party over that budget. We were told we needed to be the grown ups, that our proposals were not robust enough, now it turns out the whole thing may have been built on misinformation."
The energy contract saga has been called in for an emergency meeting of the council's finance committee next week.
