South Ribble Council to go "back to basics" in response to scathing audit report - but rows about the past rumble on

South Ribble Borough Council says it will be going “back to basics” in an attempt to rectify the failings identified in a damning independent report into its performance.

Friday, 29th January 2021, 8:41 pm
Updated Friday, 29th January 2021, 8:44 pm

The authority was recently issued with a “statutory recommendation” to improve by its external auditors – for the third consecutive year. It was also told that it was not operating in a way which guaranteed value for money.

As the Local Democracy Reporting Service revealed earlier this week, the report’s author, Mark Stocks, said that he had “rarely seen” such a breakdown in governance, performance and financial controls in his 30 years of auditing local authorities.

The council was required to produce a formal response to the report, which ordered it to make “demonstrable progress” in improving services, monetary safeguards and relations between officers and members.

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Clockwise from top left: Labour council leader Paul Foster, Conservative former cabinet member Phil Smith and Conservative opposition group leader and former council leader Margaret Smith (pictured at a full council meeting in 2019)

The authority’s 23-point plan to put things right received unanimous cross-party support at a meeting of the full council.

It includes measures to tighten the authorisation process within its accounting procedures and ensure that expenditure is undertaken with the authority of elected members.

The council’s corporate strategy has been refreshed to focus on four key priorities designed to offer the greatest long-term benefit to the borough, while there has also been an overhaul of performance management and reporting.

However, in spite of several calls to move on from the long-running saga, the sometimes strained tones of the debate suggested that the complicated history of the council’s recent past was likely to remain in the rear view mirror for some time yet.

Declaring that the district’s performance was now “significantly improved”, Labour council leader Paul Foster, added: “We are committed to a culture of compliance and transparency and will continue to comply with all legislation, good practice and within the constitution guidelines, as we have done since we formed this administration.

“From this point forward, the failings of this council are now a distant memory from the previous administration. We don’t want to discuss it any more – I think all residents can see the monumental changes that have taken place,” said Cllr Foster, who took control of the authority in May 2019.

His Conservative predecessor, Margaret Smith, who led the council for six months in the run up to the 2019 local elections – having previously been in control between 2007 and 2016 – said that her group accepted that there had been “difficulties”, adding: “We have never backed away from that”.

However, she pointed out that the external auditors had issued their statutory recommendation not only in their delayed assessment of the council’s affairs in 2018/19, but also that covering 2019/20 – both of which were published just before Christmas.

Cllr Smith also took issue with a series of critical internal audit reports last year, including one into the procurement of a previously-planned leisure campus – something which the external auditor noted had resulted in £275,000 of abortive costs.

“Some of the findings in that leisure services report were quite clearly taken as a one-sided report by a certain officer.

“I mentioned this…to our [external] auditor and he took [it] on board, but without actually going through [the audits] in a very forensic way, he actually could not say with clarity that they were completely unbiased.

“Having said all that…we accept that this report is [about] going forward and we will make every endeavour to conform and work with it,” Cllr Mrs. Smith added.

Labour cabinet member for finance Matthew Tomlinson said he was disappointed to hear people “start to pick away at the report”.

“It’s come from a qualified external auditor and we ought to take on board every single comment…and recommendation and make sure that the authority as a whole in the years to come – whoever is in charge – cannot get itself into such a place as we did,” Cllr Tomlinson added.

The external audit report also highlighted a £2m pension-related liability connected to the council’s outsourced leisure centre services – with a question mark over whether the council itself or operators South Ribble Community Leisure Limited and SERCO will be liable for it when the 16-year agreement ends in two months’ time.

Conservative former regeneration and leisure cabinet member Phil Smith rejected the external audit finding that there was not a “general awareness” of the issue when it was raised with the authority as part of the audit process.

“Pension liability wasn’t owned by this council for a long long time – [it] was in the audited accounts of the leisure trust, which are presented to the council. Not only that, but when the accounts [were] drawn up and we had meetings to discuss [them], the matter of the pension liability was brought up each time to officers at this council.

“There are a lot of comments [in the external audit report] that, as far as I can see, are blatantly untrue,” Cllr Phil Smith added.

However, that statement prompted Cllr Foster to challenge him to identify them.

“You have openly stated that you were aware of the deficit in the pension fund – for some reason, this was never reflected in our accounts or dealt with for a number of years,” Cllr Foster said.

“This is fundamentally one of the major problems we had as a council – the reluctance of certain senior members of the Conservative group to accept what statutory officers and auditors tell them.

“They have done that for a number of years and that has directly led to the position we found ourselves in.”

The meeting also heard that the council has now appointed a new section 151 officer – who oversees the authority’s finances – after being criticised by the external auditor for having six individuals fulfil that role in less than three years.