RED-faced Harborough District Council has been forced to admit that its £25.9million waste contract was not properly protected against financial risk and went against its own constitution.
Shocked councillors, angry residents and a former high-ranking employee have lambasted the council since the news came to light at about 10.40pm during a full council meeting last Thursday.
The Tory-run council could also be in hot water with loca
l government watchdog the Audit Commission after it confirmed an investigation was being launched into the matter.
The council's own financial procedures within the constitution states that any contract worth more than £40,000 must be properly signed, sealed and backed by a bank bond before work starts.
But only a "letter of intent" exists with Focsa, which has been emptying the district's bins since April 1, 2009.
Nigel Brotherton, the council's former assistant chief executive, has accused it of exposing itself to "huge financial risk".
News of the contract mess only came to light when ferreted out by recently-elected councillor Phil Knowles. He spotted a line in agenda item 14 of last Thursday's meeting which stated "bond relating to contract for provision of environmental services, National Westminster bank PLC and council".
The council's head of legal services Verina Weham confirmed to councillors that no bank bond had been in place – something which normally goes hand-in-hand with big local authority contracts to protect against firms pulling out of deals or if disputes arise.
The council started the week by saying "no comment" but, after further questions from the Mail, it yesterday (Wednesday) admitted not properly signing a contract.
It said: "There is a letter of intent. Further discussions were needed to agree arrangements for the food waste collections to be included in the contract, and when it is signed it will be sealed in accordance with the constitution."
Mr Brotherton, who worked at the council for more than 20 years, claims the lack of a legally-signed contract and no bank bond left the council exposed to financial risk on any monies paid up-front to Focsa.
Cllr Knowles said Great Bowden residents are furious by the council's admission as villagers have been complaining about Focsa since last October when the waste firm set up a base in Welham Lane without planning permission.
"Residents have raised a number of concerns but at no stage has the council ever admitted that there wasn't a contract in place despite there being numerous opportunities," Cllr Knowles said.
Eric Ludlow, a spokesman for the Audit Commission, said: "The Audit Commission and its appointed auditors take seriously any suggestion that an organisation has significantly breached its financial procedures. The district auditor with responsibility for Harborough Council will consider the concerns that have been raised and will report to the council in due course. I can confirm that we have received information expressing concerns about Harborough Council's arrangements for sealing its environmental services contract."
The matter is now due to go before the council's scrutiny panel, probably on April 21, once "terms of reference" can be agreed. Cllr Rosita Page, who chairs the panel, confirmed to the Mail that the contract matter has never been raised at scrutiny level since she took on the chairmanship more than 18 months ago.
