Monday 23 October 2017

Exposed: litany of overspending and lax controls by our councils

Paul Melia

Paul Melia

A LITANY of cost-overruns, poor planning and failure to get best value for money is revealed in a damning report on local government spending.

Auditors have uncovered serious problems with 54 capital projects costing more than €340m which were completed only two years ago, the Irish Independent has learned.

They include not putting lucrative contracts out to tender to get best value for money, not checking that companies involved in the projects were tax-compliant, and building projects without the required planning permission being in place.

The report raises serious concerns about lax controls over millions of euro of public money spent every year by 114 local authorities.

It shows that Department of Finance guidelines are regularly breached by city and county councils, despite repeated warnings.

The report, prepared by the Department of the Environment by the Local Government Auditor, shows:

* There were issues in 23 projects where companies were not asked to bid to provide services.

* 14 projects were not delivered on time, while nine went over budget.

* There was a lack of oversight in six, with planning problems in another six.

* Councils could not prove that companies were tax-complaint, despite being a key requirement of any contractor involved in a publicly-funded project.

* There was "no evidence" that the Department of the Environment had approved two projects.

The report covers projects completed in 2010 and 2011, and has been sent to Environment Minister Phil Hogan.

The lack of oversight is particularly worrying given the high cost of the schemes.

DIFFICULTIES

The projects examined ranged from small to large housing developments, water and waste projects, Traveller accommodation and fire stations.

Six cost up to €500,000, 30 were between €500,000 and €5m, 17 had budgets between €5m and €30m and one cost more than €30m.

One of the highest overspends occurred in the replacement of water pipes in Dublin.

One contract was due to cost €3.2m, but the final bill was €5.6m. The increase was due to additional works, price variations and claims.

The report says 40pc of all projects were not properly planned, including a failure to measure costs, risk assessments and setting out project timelines.

It also says there were planning issues with one in four projects, while some went over budget when local authorities were not directly involved in day-to-day site operations.

"Cost overruns occurred where consultants were in charge of the projects which were not under the control of the local authorities, such as housing," it says. "There was a lack of local authority oversight where projects were undertaken by voluntary bodies."

The report also points out that experts including engineers, architects and quantity surveyors were awarded contracts without going to the market.

"In some cases consultants had already worked on a related/connected project or had been involved in the earlier preliminary appraisal and planning work for the project and had their contracts extended without testing the market . . . in accordance with the procurement guidelines and to ensure that the services offered represented good value for money," it says.

It also recommends that training should be provided to staff. The report adds that some problems with projects running over-budget and delivered late were due to "unforeseen difficulties".

The Department of the Environment said all local authorities were contacted last month and asked to review how capital projects were managed.

"All project managers have been asked to review current arrangements for the management of capital projects," it said.

"As a follow-up action, the report will be discussed with the County and City Managers Association."

It is the second time that auditors have investigated spending in councils. The previous report was completed in 2009 and dealt with projects completed in 2006 and 2007.

Irish Independent

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