Revealed: Town Hall's secret £2.5 million contract bungle

Exclusive: QC advised Camden Council to settle unsuccessful bidder's complaint out of court

Thursday, 27th July 2017 — By Richard Osley

Camden Council Town Hall pix

CAMDEN Council has secretly squandered £2.5 million of public money getting out of a contract bungle.

The New Journal can reveal the Town Hall agreed to shell out the huge sum to a company which complained about the way it was overlooked for a lucrative public works deal and threatened legal action.

Details of the botch-up have so far only been discussed in private among a small group at the Town Hall, with opposition councillors complaining that they have been kept in the dark despite the scale of the settlement.

Last night (Wednesday), Camden finance chief Councillor Theo Blackwell said the “situation was unacceptable” but added that it was also “rare” and that measures were now in place to avoid any further blunders.

Theo Blackwell

Conservative councillor Claire-Louise Leyland, leader of the opposition, said her team had not been informed despite the eye-watering scale of the payment.

“Residents have been told cutting weekly bin collections would save £800,000 a year, but people could have had weekly collections for another three years with the £2.5million that has been frittered away here because of carelessness,” she said.

“As we were not told of this case, we haven’t been able to scrutinise what has happened. We need to know the details of what has happened here. This is such a lot of money, which is the public’s money, which would not have been lost if the council had done this properly.”

With the full details kept confidential, the New Journal has attempted to establish how Camden came to find itself signing off a compensation payment of this size. The case centres on the “public realm, maintenance and improvement works” contract, which includes tasks such as resurfacing roads and street lights inspections.

It is understood that the council hired a QC to look at the case when the losing bidder, so far unnamed, raised concerns. The silk in turn advised them to settle. The money is paid from “contingencies”, a percentage of cash set aside before the tendering process began in case of difficulties.

Cllr Blackwell said: “It is clear that this situation was unacceptable. When we were informed councillors ordered the procurement process to be thoroughly examined on behalf of the taxpayer. Auditors have assessed the systems and controls used throughout and identified areas for improvement to prevent this ever happening again.”

He added: “Camden Council successfully tenders around 40 to 50 large contracts annually to a value of up to £200m last year, so this failure is rare but extremely disappointing.  “We have since reviewed our procurement system, and as mistakes were a key factor in this case, we have put new safeguards in place. This does not impact frontline services and we have ensured that costs associated with this case will have no impact on the council’s ongoing programme of investment.”

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