Public Interest Report 2016

Statement from Derby City Council

Derby City Council acknowledges the findings and the recommendations of the External Auditor set out in the Public Interest Report (PIR) published today.

Many of the matters reported occurred some time ago and the council has already taken a large number of improvement actions through a Governance Action Plan. Numerous changes have already been put in place, and a number are on-going in order to strengthen and enhance our governance framework. This framework is subject to a number of checks and balances to ensure continuous improvement.

Councillor Ranjit Banwait, Leader of the Council, says of the report:

“Firstly, I would like to thank Grant Thornton for their work in concluding this report. I am confident that many of the issues reported by our External Auditors today are in the past; those issues that are more recent in nature are being reviewed and addressed - robust measures are already in place following an extensive overhaul of our governance framework.
Grant Thornton recognises improvements by the current leadership and senior management teams and I would like to re-assure the people of Derby that we will discharge the Council’s duties with the utmost integrity.”

The report will now be referred to Full Council for debate at a date to be confirmed in the next four weeks.

Statement from Grant Thornton

In accordance with its responsibilities as external auditors to Derby City Council up to the financial year 2014/15, Grant Thornton has issued a report in the public interest* regarding several failings of governance at the Council.

Phil Jones, a director in Grant Thornton’s Public Sector Assurance team in the Midlands, said:

"It is widely recognised that Derby City Council has a track record of achievement. However, we have identified governance failings relating to the management of several major projects and Member conduct.

“We found that the mismanagement of a major project to respond to equal pay legislation has cost the Council an additional £1.2m, resulting in £5m being spent on the project to date. A decision by Members around staff pay arrangements also resulted in additional costs of £3m in the short term.”

Grant Thornton’s report highlights several other areas of concern:

  • In 2011, the Council provided £2m support to a local firm to enable it to occupy premises to safeguard jobs. Although this had a positive outcome for the City, the Council's officers failed to establish that this payment was lawful and in accordance with European rules.
  • The taxi licensing function has exhibited failings in the past. Members have lobbied on individual drivers' behalf and the Council's own review showed that during 2012-15, some poor decisions were made in relation to the granting of taxi licenses to a number of individuals with criminal records, who had committed offences including hate crime, harassment, intimidation and making improper comments to young females. The Council has taken positive action in the last 12 months to address these problems, but further action may be required.
  • Derby City Council needed an additional £0.5m of consultancy advice because of mistakes made in managing the implementation of a new payroll system. Some of this extra spend was not properly authorised, although Grant Thornton is satisfied that it reflected the work done;
  • Member and officer roles have been blurred and guidelines are now being introduced to improve clarity about their respective roles. Politics at Derby has also been fractious for a number of years, with Members using the Standards Committee (the body overseeing member conduct) as a vehicle for political point scoring. Confidence in the Standards Committee should now be strengthened by the involvement of a member from an opposition party. Officers are also committed to ensuring that the Council works within the rules.

Mr Jones concluded: “We recognise that with a new elected Leader in place from June 2014 and a new management team from February 2015, Derby City Council understands that a more robust approach to governance is essential and is determined to sort out these issues.”

Grant Thornton’s full Public Interest Report including its conclusions and recommendations is available to download.

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