Monitoring officer issues s.5A report over governance issues within major project

The council said this related to the Automated Distribution and Manufacturing Centre (ADMC) project where money had been paid to contractors without a contract being in place.

The ADMC was allocated £20m under the Towns Fund with additional match funding in the region of £10m from other partners.

Monitoring officer Ruth Dennis issued the report after officers supervising the project found work being delivered and paid for before contracts were in place, and increases in infrastructure costs that should have been escalated for approval earlier than they were.

Ashfield asked an independent expert, Suzanne Jones, to review the situation, and paused work while more information and legal advice were gathered.

The review confirmed some elements of the project did not follow the council’s established governance and procurement processes.

Ashfield said as a result it had strengthened procurement oversight, contract management controls and internal project governance and had started work on a revised scheme budget to ensure full, formal approval before any new contracts proceed.

It added: "Despite the pause to works while the review was undertaken, the council is clear that the ADMC project remains viable, deliverable and a major priority for Ashfield and the wider region."

The council’s Chief Executive, Theresa Hodgkinson, said: “We identified these issues ourselves, acted immediately, and we are being fully transparent about the steps we are taking.”

Hodgkinson said no taxpayer money had been unnecessarily spent, all the work carried out had contributed to the delivery of the project and the payments related to legitimate work.

“There is no suggestion the money has been lost or misused,” she said.

The independent review said legal, finance and procurement staff “should be more actively engaged at the early onset of projects to determine when their resources need to be available to support the delivery of projects in the required timeframes, which may or may not include engaging external support”.

The report revealed that two contracts were awarded in February 2025 for building and highways / infrastructure works to a single contractor via a framework agreement.

Despite this decision being taken, the contracts had not been formalised, but works took place and payments were made.

Jones said a former interim executive director of place felt the public sector-owned SCAPE framework for built environment contracts was the appropriate route to market the two packages.

“There was no interaction with the procurement and projects officer or the [Nottinghamshire County Council] procurement officers (who provide the procurement support to ADC).”

It added: “With the benefit of hindsight, it appears that SCAPE was not the best route to market however, there is no evidence that the processes associated with that framework were appropriately followed.”

The review noted that the Regional Construction Framework for East Midlands and East of England covers projects up to £10m therefore splitting the construction and the highways works were the only option to tender these packages via that framework.

"There was an expectation from both parties (ADC and the contractor) that there would be contracts signed however, works were started based on other agreements in anticipation of the full contracts being signed until the matters were halted in January 2026," it said.

"It has been fully established by the council that all the full contracts relating to ADMC have not been agreed and signed."

The independent review said there had been “no clear rationale provided to demonstrate that the option to use SCAPE with two separate packages was compliant with the council’s regulations other than the direction given by the interim director at the time.

“This was not validated by the procurement specialists. It is not in line with the Public Contract Regulations to subdivide packages in order to fit within a framework.”

Jones concluded: "In summary, whilst the work conducted in this review, concurs with the council’s work that there are a number of deficiencies in the governance arrangements for the ADMC Project, there has been no evidence that there were wilful actions taken by anyone involved to deliberately avoid compliance with the council’s rules and regulations.

"One of the contributory factors appear to be that there have been a number of changes in senior officers over the period of the project and the senior team has needed to focus on a range of wider matters, including preparation for LGR, which may have diluted the time available to ensure that all the projects had sufficient and timely attention.

"It appears from the review that all the relevant teams (principally Regeneration and Legal) were not fully aligned or involved in the project earlier enough to ensure that the project with all its the challenging aspects were driven forward in a timely way. This has strained the internal working relationships between the teams which need to be rebuilt."

The independent review added that there were a number of learning points which the council would benefit from considering to support the remedial action that it is already taking.

Jones said: “Project management resources were not, in hindsight, adequate for the size and complexity of this project which has led to a number of governance issues not being dealt with in a timely manner in line with the contract procedure rules and financial regulations.”

She added: “Clarity around the roles and responsibilities of project boards and the overall Regeneration and Capital Board would ensure that there are appropriate resources applied to high risk projects.”

Her independent review also suggested that “Legal, Finance and Procurement should be appropriately represented at the Board / Panel to ensure that resources can be deployed in a timely fashion and that there is a mutual understanding of the project deliverables, risks, dependencies and timescales”.

Mark Smulian