Auditor questions Northamptonshire council consultant's role

13 April 2018 Consultancy.uk

Cash-strapped Northamptonshire County Council has come under fire from multiple angles, following the institution cutting £40 million from its budget amid claims that it had wasted money on frivolous activities, while neglecting public services. Most recently, this saw auditors from KPMG question the council’s awarding of a £50,000 pay-off to a former executive, before engaging her as a consultant.

Until very recently, the Conservative-run Northamptonshire County Council was perhaps most famous for its launch of a three hour, publicly funded, adult education class, titled 'Discover How To Wear Scarves Effectively'. What in 2016 passed for absurdity, now looks more like decadence, however, with the council having issued a Section 114 notice in February, signalling it had effectively gone bust.

Weeks later, in an alleged effort to avoid outright bankruptcy, councillors voted to approve an austerity budget, cutting spending by  £40 million, closing 21 of the county’s 36 libraries, along with freezing staff pay, removing all bus subsidies, reducing its trading standards budget by 42%, and drastically shrinking its highways maintenance spending.

A government-commissioned investigation into the reported mismanagement of the council later found that the problems at the council were so deep-rooted that it was impossible to rescue it in its current form, and to do so “would be a reward for failure.” Instead, the report called for the council to be scrapped, and replaced with two new smaller authorities.

New Northamptonshire County Council HQ

Following protracted scrutiny, the council’s leader, Heather Smith, stood down after the report’s publication, writing in her resignation letter that she blamed “vicious public insults by four local MPs”, and adding “you cannot win” if the “machinery of government is turned against you.”

Now, auditors from KPMG have further compounded the woes of the beleaguered council’s floundering leadership, after the Big Four professional services firm shone light on a transaction regarding another out-going employee. Northamptonshire County Council made Christine Reed redundant before engaging her company on a consulting basis in 2016. The appointment was referred to KPMG’s auditors by Max Caller, who led the government investigation into Northamptonshire’s local authorities, and in minutes from a meeting of the council’s Auditing Committee, KPMG has since been noted as saying it could not find evidence that all necessary legal measures were taken during the procurement process of the boutique consulting firm.

Reed was working for the Local Government Shared Services (LGSS), a trans-county body funded by Cambridgeshire, Northamptonshire and Milton Keynes councils, before being made redundant in September 2016, as the institution sought to restructure. Her company, Gradon Consulting, was employed by Northamptonshire’s council within the space of a month, on a £650-a-day rate – placing Reed as programme manager of a large IT project called ERP Gold.

One-off

While Reed commented that the firm was employed for "a short-term and one-off contract," KPMG told the Audit Committee that it could not prove Northamptonshire County Council had followed the necessary rules during the appointment process. The minutes elaborated that auditors had not been provided documents showing any business case or value for money considerations regarding the appointment of Gradon Consulting.

The council confirmed it was now working with auditors to review the appointment, while an independent report into the ERP Gold project, which, as of April, will handle all the council's financial transactions, condemned aspects of its implementation as "wholly inadequate".

Following the news, the council referred the press to a statement issued in February, in which it said Reed was "re-engaged" in a position "entirely different" to the role she had been made redundant from.

Related: KPMG faces Carillion auditing investigation

Profile

More news on

×

Manchester Mayor criticised for £250,000 consulting spend

19 March 2019 Consultancy.uk

The Mayor of Greater Manchester has been criticised for splurging hundreds of thousands of pounds on consulting fees before determining that the region’s fire brigade must slash its budget by millions. Andy Burnham put more than £250,000 towards work from ten consulting firms as part of a review into the region’s emergency services.

Despite the continued argument that projects like the Northern Powerhouse initiative are helping to address the North-South divide in the UK, statistics still show that the North has borne the brunt of austerity in England. Northern English cities have been disproportionately affected, with their spending cut on average by a fifth since 2010, while cities in the south and east of England had average losses of 9%.

The impact of spending cuts has been keenly felt in Greater Manchester in particular, where local government spending has fallen by as much as £650 per person since 2009 in some parts of the region. As the area looks to find further savings, while the Central Government continues to fail to deliver on its pledge to end austerity, it has been announced that the fire brigade for Greater Manchester faces a reduction of up to £10 million from its budget.

The swingeing cuts to hit the emergency service would likely see its fleet of fire engines reduced from 56 to 47, while six fire stations face closure, and 113 support staff could suffer the axe. The news follows an investigation from Mayor Andy Burnham, which was triggered in part by the admission of Chief Fire Officer, Jim Wallace, that since 2015 the service has failed to deliver “its own efficiency plan”.

Greater Manchester Mayor Andy Burnham spent £268,300 to review the city’s fire service

The review itself has been far from inexpensive, however, and it has led some to accuse Burnham of hypocrisy. During the review of the fire service, which has delivered demands for the service to find major efficiency savings, the Greater Manchester Mayor reportedly splurged £268,300 in public funds on consulting work for his root-and-branch review.

According to local newspaper Manchester Evening News, Burnham tasked ten different consultancies with helping to compile the review, receiving payments ranging from £101,000 to £7,000. The largest amount was handed to Leicester headquartered P. Cooper & Associates for the expertise of a “senior change and transformation programme specialist,” while it was reported that another of the consultants gave “guidance on leadership and culture”.

A Greater Manchester Fire and Rescue Service (GMFRS) spokesman said of the spending: “The Programme for Change programme has required input from specialists who are expert in areas such as organisational transformation, operating models for fire safety and estates.”

Manchester’s fire brigade was criticised in 2017 when, in the wake of the Manchester Arena bombing, a report by Lord Kerslake noted crews had been held back from helping. Contrary to helping deliver a more efficient service, Unison has told the press that it believes the proposed cuts will make the residents of Greater Manchester “less safe”. With the expenditure of the review on private sector consultants now public, meanwhile, the union has slammed the report for throwing away public funds while jeopardising vital public sector work.

Unison represents the 113 staff who may lose their jobs, and a spokesperson for the union told Manchester Evening News, "It's disappointing that when finances are clearly tight, priority has been given to hiring external consultants rather than engaging with the workforce. This will be a shock to our members who were only told on Monday their jobs were at risk."

In recent years, a succession of local authorities have come under fire from officials and the general public for their consulting spending in the UK. Earlier in 2019, a freedom of information request by The Times revealed that local councils across the UK have spent around £400 million on consulting firms in the last year alone. According to the report, this represents a rise of more than a fifth since 2014, with critics using the figures to call into question the value added by engaging external expertise.

Commenting on the criticism many councils face, Tamzen Isacsson Chief Executive, Management Consultancies Association, said, “Consultants play a vital role in the public sector, [providing] transformational impacts, innovation and increased efficiency… Vital front line services continue to operate uninterrupted [while] consultants often help local authorities get better results with less money. As the MCA awards this year demonstrate consultants are delivering social benefits across the UK – from work on getting better outcomes for children in care to finding better processes for finding homes for vulnerable families in London these examples offer a true reflection of the consulting excellence that operates across the UK to the benefit of councils and the wider society.”