In my last post, I said that Director of Development, Dr Steven Jones, had emailed me with an explanation as to why there were two copies of G&G’s bills of quantities in the file for 10 Meyrick Street Pembroke Dock.
In fact the email came from Director of Finance Mr John Haswell.
This has now been corrected and I apologise for any distress caused by this error.
I discovered my mistake while revisiting my vast archive of documents on the Commercial Property Grants in Pembroke Dock with a view to writing a novel-length piece about the subject.
Very early on, I suggested that the problems with the scheme arose from the intermingling of eligible and ineligible works in the tender documents.
As I pointed out, this made it possible for unscrupulous applicants to arrange things in order to maximise the amount of grant claimed.
To take a simple example, suppose the true cost of the works is £100,000 split evenly between eligible works (£50,000) grant aided at 50% and ineligible works (£50,000).
If the applicant has a tame builder who prices the eligible work at £60,000 (grant £30,000) and the ineligible work at £39,000 – total £99,000 – he will beat someone who prices it £50,000 (grant £25,000) and £50,000.
So the developer gets to accept the lowest tender (his inalienable right according to PCC’s European Officer) while to the taxpayer falls the privilege of forking out an extra five grand for exactly the same result.
Even better (or worse) if there is an agreement between the developer and the builder that the ineligible works will not be required in which case he can load up the cost of the eligible work while minimising the cost of the rest in the sure knowledge that he will not be required to carry out this loss-making part of the contract.
Or if things can be arranged so that the tame builder is tendering on a different specification than the rest which almost guarantees that he will come in with the lowest price even though his price for eligible work is (deliberately) higher than the other bidders.
I was of the view that the tenders should be for eligible work only and if the developer required other work to be carried out that would be a matter between him and the builder.
I made this point in a long email that came before the cabinet on 3 December 2013.
This was accompanied by a line by line rebuttal.
My submission is in the left hand box – the council’s response in the right:
As we know, not all tenders were based on the same specification and, in any case, “probably” leaves those with less than pure motives with too much room for manoeuvre.
On any sensible reading of the procedure manual, the division into eligible and ineligible work should take place before going out to tender, as the author of that other website pointed out to the Monitoring Officer in an email which quoted the manual:
5.3 Submission and agreement of specification and plans.
(a) An itemised and detailed specification should be submitted at this stage. Plans should also be submitted if these are required e.g. to show the details of lost features to be reinstated.(b) Carefully assess the specification and establish which items are eligible and which are ineligible. If it is not clear, seek clarification from the applicant or European Unit as necessary…
(d) Agree the itemised specification with the applicant/agent and ask them to seek at least three independent itemised quotations…
Clearly this requires that the eligible items are identified before seeking the “three independent itemised quotations”.
Jacob’s email was passed to the council’s European Officer Gwyn Evans.
He replied:
Dear Cllr Williams
I shall answer your e-mail because as the author of the CPGS Procedure Manual I know better than anyone how it should be interpreted.
The fact is that it is expected that tenders will contain a mix of eligible and ineligible works, and that the Council will decide for itself what is eligible and what ineligible. This important task we will not leave to an external architect with no knowledge of ERDF eligibility rules, who has no authority to decide on behalf of the Council what we should pay grant for and what we should not. The systems set up to administer the CPGS, which were described to you at Audit Committee and which you have had the opportunity to examine for yourself in the Data Room, are designed on this basis.
I consider it inappropriate to enter into further any correspondence on this matter whether by e-mail or other means. It may be discussed, with the Chairman’s consent, when Audit Committee reconvenes to discuss the CPGS.
Of course, nobody was suggesting that the issue of what was eligible and what not should be left in the hands of someone with “no knowledge of ERDF eligibility rules”.
Indeed what the procedure manual requires is that a council officer “carefully assess which items are eligible…” and then “Agree the itemised specification with the applicant/agent…” before asking them to seek three tenders.
And the first paragraph suggests that Mr Evans is a supporter of the doctrine of officer infallibility which is at the root of many of the council’s problems.
Cllr David Pugh made the same mistake in his infamous speech to council on 13 December when he said:
“Having received the reports that refute all his arguments, Cllr Stoddart then changes tack and asserts that the grant schemes rules are flawed and that the council has wrongly interpreted them.
I know he claims a much higher level of expertise in most matters, but here I will take the opinion of our highly regarded and experienced European funding team over his any day.”
Unfortunately for the hapless Pugh his claims about the situation in Pembroke Dock were based on information provided by one of this “experienced European funding team” who was trying to cover up his own incompetence, or worse.
And, of course, it was just what Pugh wanted to hear so he was keen to believe it, true or not.
Anyway, the dog barks and the caravan moves on and in September 2014 the audit committee considered what lessons were to be learned from the flaws that I had uncovered during my inspection of the files in the data room.
One of the changes was:
This was a welcome development, though as the email Jacob received from the European Officer is dated 31 January 2014 it is difficult to accept that this change had “already been implemented (since January 2014)”.
I had also suggested that the tender process itself was flawed but that, too, got short shrift:
However, I was able to convince officers in the finance department that a tender-opening process overseen by the developer and his agent, as evidenced by the tender report on 10 Meyrick Street (below), was not a satisfactory way of dealing with public money.
This was especially so because the tender of the successful contractor – G&G Builders – wasn’t even dated and as we have seen before it was for an entirely different specification to the other (unlucky?) thirteen.
So by the time the review of the procedure went before the audit committee in September 2014 the council was singing a different tune and where previously we had been told that it would be “wrong to use Council taxpayers money” to supervise the tender-opening process that was now exactly what was proposed.
