With particular relevance to the Beacon Park Golf Course
and its Senior Members. A Local Government Minister Brandon Lewis said “Our new [Local Audit] law will replace this old fashioned quango [The Audit Commission] by passing power down to people through more local choice and transparency. Better local audit arrangements will replace central dictat and as a result we remain on track to save taxpayers £1.2 billion”.
So our “power” would seem to be to follow the money and then use the better local audit arrangements for transparency by outsourced experts? To complement this measure, the Bill will protect the rights of taxpayers to inspect the accounts and raise objections if they think there are matters on which the auditor should report, ensuring that local people can continue to use this mechanism to hold their local bodies to account.
On 10 July 2019 James Brokenshire as The Secretary of State for Housing, Communities and Local Government said “Local Government in England is responsible for 22% of total UK public sector expenditure. It is essential that local authority financial reporting is of the highest level of transparency to allow taxpayers to understand how their money is being spent.
“The responsibilities for the framework within which local authority audits are conducted is the Local Audit and Accountability Act 2014. It gave effect to commitments to abolish the Audit Commission and its centralised performance and inspection regimes and put in place a new localised audit regime, re-focussing local accountability on improved transparency”.
He went on to ponder “Whether the current statutory framework for local authority financial reporting supports the transparent disclosure of financial performance and enables users of the accounts to hold local authorities to account; and appropriate recommendations on how far the process, products and framework may need to improve and evolve to meet the needs of local residents and local taxpayers, and the wider public interest”.
On 24th October 2019 we wrote about the WLBC Annual Audit
that “Grant Thornton has published the draft findings report of the West Lancashire Borough Council for the year ended 31 March 2019”.
Our concern about the Beacon Park Golf Course led to some correspondence with Grant Thornton, which is now published here
To Grant Thornton
“I refer to your Draft Audit Findings Report for West Lancashire Borough Council-Year ended 31 March 2019, produced October 2019. I note the statement of “Value for Money arrangements- Under the National Audit Office (NAO) Code of Audit Practice (‘the Code’), we are required to report if, in our opinion, the Council has made proper arrangements to secure economy, efficiency and effectiveness in its use of resources (‘the value for money (VFM) conclusion’). We have completed our risk based review of the Council’s value for money arrangements. We have concluded that West Lancashire Borough Council has proper arrangements to secure economy, efficiency and effectiveness in its use of resources”.
“I refer to the “Significant findings – audit risks- Having considered the risk factors set out in ISA240 and the nature of the revenue streams at the Authority, we have determined that the risk of fraud arising from revenue recognition can be rebutted, because: • there is little incentive to manipulate revenue recognition • opportunities to manipulate revenue recognition are very limited • the culture and ethical frameworks of local authorities, including West Lancashire Borough Council, mean that all forms of fraud are seen as unacceptable Therefore, we do not consider this to be a significant risk for West Lancashire Borough Council. Our audit work has not identified any issues in respect of revenue recognition”.
“In respect of “Valuation of land and buildings” you state “The Council’s land and buildings assets have been valued this year by the Council’s in-house valuation team. Our work has assessed them as having a good knowledge of the Council’s portfolio, and they have used information from the Asset Register and other Council estates systems in carrying out their valuation of the assets. The assumptions used are reasonable and we are satisfied that they had access to appropriate levels of information to complete reliable valuations”.
“Presumably you are aware of all the WLBC land, including the Council resource the Beacon Park Golf Course (BPGC)? The BPGC forms part of the leisure assets portfolio. Owned by WLBC and administered on its behalf by the West Lancashire Community Leisure Trust, and now leased to Serco Leisure Operating Ltd, a company that, with the agreement of the Leisure Services Department and Planning, between them turned the BPGC into a landfill site.
“It may be within your remit not to examine individual leisure assets, such as the BPGC, in your Audit. That excludes full disclosure of how companies involved in the BPGC have mismanaged it. DTC Leisure Ltd committed the criminal offence of not paying VAT but went into liquidation without penalty. Serco Leisure Operating Ltd has breached planning laws through its landfill activities and has been served with notice to comply with the original plan. Serco partnered the Oakland Golf and Leisure Ltd whose director was convicted of VAT and planning offences in Knowsley Borough, prior to its activities in West Lancashire.
“In the course of the landfill activities it became clear that the excessive dumping was worth vast amounts of royalties to the companies involved. The local Serco Project Manager claimed royalties would be paid to the West Lancashire Community Trust Ltd, but events have proved the royalties were paid to Serco. Due to the involvement of local MP Rosie Cooper the Serco Chief Executive Officer Rupert Soames admitted to them having received £183,864 of royalties revenue. The remainder of the estimated royalties is assumed to be traceable via a string of companies associated with the Oakland Golf and Leisure Ltd Director Jonathon Snellgrove. BPGC/WLBC planning development application 2016/0040/FUL is of interest.
“Snellgrove’s misdemeanours included prosecution for planning breaches by Knowsley Council, convicted in his absence at Liverpool Magistrates Court and fined £9,000, never paid, and unpaid VAT of £100,000 at UK Sports Parks Ltd, now liquidated.
“As I write this, once again BPGC is a shambolic development site, to attempt to correct what Serco Leisure Operating Ltd and Oakland Golf and Leisure Ltd debauched by spreading the excess landfill across other parts of the course.
“On the basis that I write to challenge your draft report as it has not reported on the events I have described at Beacon Park Golf Course, dare I mention “due diligence” of WLBC’s BPCG contractors and how can it “be concluded that West Lancashire Borough Council has proper arrangements to secure economy, efficiency and effectiveness in its use of resources”? It clearly cannot”.
The Grant Thornton reply
“Thank you for bringing this matter to my attention. I have discussed it with the relevant officers at Authority to obtain further information on the facts before responding to you to.
“Unfortunately it is beyond my remit as statutory auditor to the Authority to investigate the activities of third party companies such as DTC Leisure Ltd and Serco Leisure Operating Ltd. Therefore, I am not able to comment further on those allegations relating to third parties.
“In response to your query on my proposed conclusion on the Council’s VFM arrangements, the scope of our VFM work considers the overall arrangements in place at the Authority. The Audit Code does not necessarily require me to for example consider the adequacy of the Authority’s actions in response to an individual planning enforcement issue unless I deem it to be so significant to my conclusion on those overall arrangements. Having discussed the matter with the Authority, I do not have sufficient grounds to take the view that the issues raised relating to Beacon Park Golf Course in isolation are indicative of inadequate arrangements within the Authority.
“As the matters are beyond my remit, I would instead encourage you to discuss and try to resolve this matter directly with the Authority”.
“Thank you for your reply. I’m dismayed as a council tax payer that your remit does not necessarily require you to consider the effect of planning decisions at the Beacon Park Golf Course and its use for some years as a landfill site leading to huge disruption and corrective landscaping, all without due diligence to the destination of the landfill royalties involved.
“The West Lancashire Borough Council Constitution 4.2C: Scheme of Delegation to Director of Leisure and Environment required that Officer ; “4. To agree charges at which services may be made available to Council Services or appropriate outside bodies. “5. To submit tenders and estimates for work to be carried out by Contracting Services and persons acting on its behalf.
“24. To enter into negotiations with the West Lancashire Community Leisure Trust and the Trust Partners Serco Operating Limited and, during negotiations with those bodies, engage consultants and obtain expert legal and financial advice as appropriate.
“Is there no requirement that, quoting 24…obtain expert legal and financial advice as appropriate… for that advice then not to be auditable? Otherwise, what is the point of the Constitution requirement of it? What is the point of the Trust and its Partner Serco Leisure Operating Limited being named as liable to obtaining expert legal and financial advice which is not then to be considered of merit to audit and public scrutiny?
“Perhaps you might re-consider your remit on the basis of Constitution Delegation Item 24?”
Grant Thornton Response
“My roles and powers as external auditor are defined by the National Audit Office in their Audit Code of Practice, which I must strictly adhere to. Unfortunately I do believe this particular matter is beyond my remit to provide an opinion. However, that is not to say the matter is not open to scrutiny. For example, it may be a matter that the Council’s internal auditor could consider. That would however be their decision not mine”.
So who has given West Lancashire council tax payers value for money from this draft audit? “The Bill will protect the rights of taxpayers to inspect the accounts and raise objections if they think there are matters on which the auditor should report, ensuring that local people can continue to use this mechanism to hold their local bodies to account”. But the Bill hasn’t helped us one iota. The “mechanism” has slapped us in the face. The auditor has dismissed objections to the Beacon Park Golf Course desecration by landfill and the destination of the landfill royalties. Perhaps our next move is to ask the National Audit Office to adjudicate on the interpretation Grant Thornton has given, with particular emphasis on the Constitution? Otherwise we, council tax payers, have no role at all and none of the transparency and protection Mr Brokenshire promised.