Some of Bristol City Council’s biggest and most controversial deals should be investigated by finance watchdogs, an opposition councillor claims. Conservative Cllr Geoff Gollop has called on the authority’s external auditors Grant Thornton to examine major projects including City Leap, Bristol Heat Networks and Temple Island to ensure they provide taxpayers value for money (VfM) and that the decisions were made properly.
The council’s top finance officer said in response that discussions were taking place with Grant Thornton to decide which areas to cover in depth for the 2021/22 VfM audit. She said these would include checking progress on 13 key recommendations the auditors made in their previous year’s “damning” report which blamed the authority for the Bristol Beacon’s revamp costs doubling and found officers broke the rules on awarding contracts 203 times in 2020/21.
Cllr Gollop told the council’s audit committee on Monday, September 26, that Grant Thornton should also focus on several other grand plans when it goes through City Hall’s books for the latest financial year. Speaking during public forum, the Westbury-on-Trym & Henleaze ward councillor, who is not on the committee, said members should be concerned enough to draw auditors’ attention to areas where there was “insufficient information” available publicly to assure value for money and proper decision-making.
Read more: Auditors criticise city council over escalating Bristol Beacon costs
He said: “The City Leap project is innovative, but while the project may well generate significant profits for the council’s partners, there is little indication of direct financial benefit to the council which appears to be very limited with no inflationary uplift. The governance of the joint venture is still unclear and further investigation by auditors may be appropriate.”
He said the authority was selling its Bristol Heat Networks – to be run by one of the council’s two City Leap joint venture partners Vattenfall Heat UK as part of the £1billion scheme to decarbonise Bristol’s energy system – “at cost”, or what it paid for it, rather than the supposedly higher current value. Cllr Gollop said: “It seems strange that a seven-figure sum has been spent on both legal and accountancy advice, but there is at present no suggestion of a valuation.
“It might be appropriate to suggest this is worthy of review under the value-for-money report. I have very limited knowledge of the Legal & General agreement to develop the former Arena Island.
“However, my instinct suggests that underwriting rental income on an office development at the current time may have some contingent risks. It might be appropriate to ask the auditors to assess whether due attention has been paid to all risks, whether proper benchmarking took place, and whether all liabilities that could arise as a result of the contract have been modelled, quantified and disclosed.”
He said Grant Thornton should also look into the departure – on the same day – of the managing and finance directors of the council’s Bristol Waste company. “It would be normal practice where such an issue arises in a wholly owned subsidiary for information to be provided to the board and the external auditors,” Cllr Gollop said.
“Audit committee may wish to be assured that information has been provided.” Grant Thornton senior manager Beth Garner told the meeting: “I have made a note of the points and we will discuss them with officers as part of our value-for-money audit work for 2021/22.”
City council finance director Denise Murray said that having already discussed the heat networks business and City Leap with auditors, the projects would “inform a significant part of the 2021/22 audit”. She said Grant Thornton number-crunchers were meeting the authority’s corporate leadership board, comprising cabinet members and top officers, “to do a risk assessment to then agree as part of that process the deep dive areas for their VfM review for this year”.
Ms Murray said the actions prompted by the previous year’s recommendations would also “definitely be reviewed” to ensure they had been done. New rules introduced by regulators two years ago require local authorities’ independent auditors to provide much more detail than before about an organisation’s “arrangements to secure economy, efficiency and effectiveness in its use of resources”.
Grant Thornton’s report for 2020/21, published in June 2022, did not identify any significant VfM weaknesses but made 13 improvement recommendations.
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