Formal Complaint against Sheffield City Council – Discrepancies in Contract Data & Payments

Email dated 17 January 2018

To: Cllr Julie Dore
Leader of Sheffield City Council

Cc Cllr Alison Teal
Cllr Cliff Woodcraft
Sheffield Star News Desk

Dear Councillor Dore

Formal Complaint against Sheffield City Council

You will be aware that I have written to John Mothersole (CEO Sheffield City Council), Chris Grayling (Secretary of State for Transport) and Marcus Jones (Minister for Local government) pointing out discrepancies in contract data and payments and expressing the view that it is time to call the Auditors in on the PFI contract with Amey Hallam Highways Ltd.

I now wish to make a formal complaint against Sheffield City Council for;

• blocking public scrutiny of the PFI Highways contract.
• publishing false information;
• breaching the Local Government Transparency Code 2015.

If you intend to investigate the matter I can provide further details and will co-operate with any investigation. In the meantime, here is something to start with.

Blocking public scrutiny of the PFI Highways contract.
Sheffield City Council has been reviewing that contract since 2012 with a view to publishing much of it. When asked, the public are informed that it is intended for future publication. More than 5 years have now passed.
My findings indicate that Amey Hallam Highways Ltd has misreported work and as a result may have been overpaid by millions of pounds. If those findings are confirmed then public office holders have some questions to answer.
Public officer holders are not immune from section 3 of the Fraud Act 2006 ‘Fraud by failing to disclose information.’ Basic due diligence should have picked up on the road resurfacing and other discrepancies long before I found them. More openness and better transparency would have revealed these issues earlier.

Publishing false information [including statements made by public office holders
There are many examples to choose from but for the sake of brevity, I will limit myself to one example at this time – reporting of PFI highways contract value. Here is a summary:

Example of false information
Since 2012, Sheffield City Council has falsely reported the contract value of the PFI contract with Amey Hallam Highways Ltd. the actual value of which is reported to be £2.2bn.

• Council minutes (July 2012) record contract value as £2bn.

• The most recent data sheet for the contract on the council’s website (last updated October 2017) states contract value is £2bn and that figure appears elsewhere on the council’s website.
• A member of the public asked an FoI in 2015 and was told the contract value was £2bn.

Understandably, the media has now widely reported the contract as being £2bn when it should allegedly have been £2.2bn. The discrepancies do not stop there. The Transparency Code requires that councils publish details of contracts.

• The value recorded for the PFI Highways contract on website version of Sheffield’s contract register is £1.2bn.
• The value recorded for the contract YORTender is also £1.2bn

I enquired about the discrepancy on the contract register and was told it was a typo. £ 1 billion is a large typo especially on a high profile contract. I was told the error had been corrected. I just checked. No it hasn’t.

Whilst the council is not responsible for what is reported by the media it does have a responsibility to ensure source data is correct. We all make mistakes but making them repeatedly over a number of years and failing to detect them does not instil confidence.

Breaches of Local Government Transparency Code
The Code requires Councils to publish certain data in a specified time scale. Sheffield City Council has failed to do that. They under reported expenditure to Amey Hallam Highways Ltd (and other suppliers) and failed to detect basic errors and omissions in the published data. Here is a summary of the breaches detected so far including the sections of the Code that were breached.
• Failure to report payments to suppliers on time (s27)
• Failure to report credit notes (s28)
• Failure to include irrecoverable VAT (s29)
• Failure to report Government Procurement Card spend (s30)
• Failure to follow LGA (Open data) guidance (bad date and amount formats)
• July 2016: Expenditure under reported by £39.1m
• December 2016: November data duplicated in error
• March 2017: Suppliers names redacted in error (89% of all names)
• Failure to notify public of errors in published data (s24)
• Failure to have robust information management processes in place (s23)

It should not have been left to a member of the public to point out such failings and errors. It raises the question that if published data contains so many problems what about the unpublished contract data on which payments are made.

Over to you.

Yours sincerely

Michael J Keane

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