Whistleblowing allegations at council relating to £13m contract overspend went unheard, report suggests

Whistleblowing allegations relating to contracts signed by Guildford Borough Council were not taken to members, according to an independent review conducted by SOLACE.

Issues at Guildford were brought to light after concerns were voiced about a significant contract overspend between 2020 and 2023. 

The contract, which was between the council and a developer, saw the local authority spend a total of £18.9m over the period, despite the council setting a maximum expenditure of £5.4m.

This £13.5m overspend was the subject of two individual whistleblower allegations raised between 2022 and 2023.

When a new monitoring officer came into the council in April 2023, Guildford commissioned an independent fraud investigation, leading to the police investigating potential criminal activity.

Since then, some officers have been suspended and several agency staff contracts were terminated by the council. 

Guildford later commissioned SOLACE to conduct the independent housing governance review and a wider governance review. 

In its review of the housing service, SOLACE found evidence that challenge was not previously in place "and the Monitoring Officer was not initially, listened to but, at the time of writing, and following the appointment of the new Chief Executive, that healthy challenge was found to be in place."

It also noted that the monitoring officer appeared to now be "listened to".

The report added that Elected Members and the Corporate Management Board appeared to be working "together to ensure that discussion is embraced and that challenge is seen in a positive light." 

However, it added: "This is true now but wasn't previously. There was a history for example of the Whistleblowing on this matter not having been taken to Members in early 2023. There was a lack of transparency in the Member / officer arena which is now being addressed."

The report went on to make 19 recommendations to the council, including a recommendation to ensure a 'golden triangle' approach [to the relationhsip between the chief executive, the s151 officer and the monitoring officer] exists.

It also recommended the council develop an improvement plan for housing with a particular focus on leadership, cultural change, tenant engagement, building and tenant safety, compliance, staff training, procurement and budget monitoring.

Serious warnings were also made in the overall governance review, including a warning that the council is at serious risk of failing in its statutory duty to deliver best value.

It described understanding of the Best Value requirements amongst members and officers as "very limited".

The report also said the council's Corporate Strategy is out of date, has almost no visibility and is not used to steer the authority or make decisions at any level.

"Significantly, it is not used to shape service or financial planning," the report noted.

It added that the current section 151 officer and monitoring officer uphold their duties and give their advice "with a high degree of integrity and competence". 

However, the report criticised the high rate of churn in the two roles prior to early 2023, when there was a series of short-term or temporary appointments to the two positions. 

"It is apparent that any succession planning for these posts that did exist was not effective," it said. 

It also noted that only recently has the structure been changed so that the section 151 officer and monitoring officer report directly to the chief executive. 

"Given the centrality of the three statutory officers to the good governance of the authority this should have been the case as a matter of normal practice. It is important that this approach becomes routine now."

The report highlighted other governance issues such as a lack of understanding of effective decision making processes at the council. 

It said this issue was further evidenced by the lack of controls around contract awards and management, which led to significant contract overspends.

Turning to member-officer relationships, the report said that while members and senior officers "maintain polite and positive relationships", there is "insufficient" mutual challenge.

"On the part of Members, the review found insufficient curiosity about the ways in which the way services and budgets are managed and delivered for the benefit of the public," the report said.

The report added that there appeared to be a "hesitancy to share information with all Members other than the Administration," blaming a "few" incidents of confidential information being leaked to the local press. 

The report also claimed that there was a culture of working in silos at the council. 

The first review was conducted by Andrew Flockhart, Chris Buss, Suki Binjal and Jim Taylor. The second review was conducted by Jeanette McGarry.

The council has accepted all recommendations made by SOLACE and has since developed an improvement plan to tackle the issues raised by the reports. 

It has also agreed to implement an Independent Assurance Panel to provide support and oversight. 

Progress against the Improvement Plan will be reported to councillors every six months. This will be accompanied by an update from the Independent Assurance Panel.

One key element includes a commitment to implementing effective governance across the organisation "so decisions are made at the right level, with accountabilities and responsibilities clear". 

The Corporate Governance and Standards Committee will consider the plan on 15 May, ahead of a full council meeting to vote on adoption.

Responding to both reviews, the leader of the council, Cllr Julia McShane said the local authority accepts the recommendations in full.

She added: "We have put in place robust independent oversight and support to ensure full transparency. There will also be regular reporting back to council on progress being made.

"The people of Guildford deserve better from their council and for that we give a heartfelt apology and a commitment to put right the long-standing issues which we have uncovered. We have invited scrutiny and embrace accountability and will not rest until we have a resilient, well managed council of which we can all be proud."

Pedro Wrobel, who became Chief Executive of Guildford and Waverley Borough Councils in February 2024, added: "I recognise everything that the SOLACE reports identify and accept all the findings in full. This is not okay, and I came here to deal with it.

"Over the past two and half months, we have been developing a comprehensive Improvement Plan to address the issues at Guildford Borough Council. It addresses every recommendation from these reports and goes further.

"I am delighted with the appointment of the Independent Assurance Panel. It is critical that we make everything open and transparent. We are here to do the right thing, not the easy thing."

Adam Carey