Midlothian Council spends £2.1m on an unauthorised contractor

Midlothian Council in eastern Scotland has launched a full investigation into alleged procurement irregularities which led to £2.1M being awarded to a works contractor over the course of several years, despite the contractor not featuring upon the Council’s own framework of approved suppliers amidst allegations of “an inappropriately close relationship between [the] contractor and [Council] staff” and unauthorised use of Council equipment for non-Council purposes.

In a report to the Council’s Audit Committee, chief officers of the Council state that:

“Following serious allegations being raised by members of staff regarding suspected procurement irregularities, a Phase 1 full investigation of the allegations has been conducted by the council’s internal audit and corporate fraud team. The initial allegations raised by employees included an inappropriately close relationship between contractors and staff, work regularly being awarded to contractors that could have been carried out by council staff, and council equipment being used for non-council jobs.

In a reference to a high profile property repairs controversy that hit the neighbouring City of Edinburgh Council in the early 2010s and which led to two Council officers pleading guilty to corrupt practices, the report assures members of the authority that preliminary investigations have uncovered no evidence of over-charging or invoice ‘gouging’.

The latest revelations come at a difficult time for the sector with Police Scotland have also investigated whistleblower allegations of procurement fraud at North Lanarkshire Council, subsequently discontinued, and a tight public sector financial climate with demand far outstripping financial resources in many areas of a local authority’s statutory responsibilities.