Liverpool Council has outlined how it has responded to a damning report into its costly electricity contract errors last year.
Last month, the city council signed off on plans to reimburse schools more than £2.3m after its expensive contract mistakes. A report earlier in February confirmed schools across Liverpool were left with an additional bill worth millions of pounds as a result of errors around its energy contract in the spring of 2022.
Council leaders were not informed that the electricity provider it was dealing with had withdrawn from the commercial market, leading to the council - and other city institutions including schools and the fire service - being placed on a far more expensive contract. Following that error, a devastating report was published by accountants Mazars, who were commissioned by the Mayor of Liverpool Joanne Anderson, to carry out an external investigation.
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It identified gaps in the council’s own audit process, criticised individual decision making and accused the authority of failing to learn lessons from previous contract renewals. Now, new documents submitted to the local authority’s audit committee have outlined how it has responded to the wide-ranging assessment.
Mazars had identified the need for an internal investigation by the council, the scopes of which are now “subject to experienced, senior, independent review by the Interim Chief Internal Auditor and consulted on with the Section 151 Officer as appropriate,” according to the new report. Short-term changes identified in an assessment made by 4C Associates are scheduled to be completed by next month while work on the development of a new corporate contract management framework is progressing.
On the failure to update key figures, all decisions made by the council’s cabinet are reviewed by the corporate management team and more than 200 managers/report authors have been trained on cabinet report writing and timelines.
The capacity of council staff to manage workloads is described as a “corporate risk” which is being monitored as part of the council’s risk management processes. A restructure of roles has taken place which “has formalised the transfer of some corporate services and property to other corporate directors to ensure workloads are manageable.”
Mazars’ report, which was confirmed in August, did not shine a favourable light on former chief executive Tony Reeves’ leadership, the accountants’ assessment is equally critical across the whole organisation. It said Lee Kinder, assistant director of asset management, failed to inform cabinet as early as March of Scottish Power’s (SP) decision to temporarily close its trade desks, which ultimately led to the move to a more expensive tariff.
Mr Kinder openly admitted this is something he should have done, according to the report, but had not acted with deliberate intent to mislead. It added how Mr Kinder “openly admitted that, with the benefit of hindsight, he should have informed Cabinet of the material change in SP’s circumstances.
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