Thank you, Mr Behan, for your questions.
I have provided written answers to your questions.
Your questions relate to the potential risk to the public purse of corruption in local government and specifically to Somerset County Council as a result of outsourcing services. I will endeavour to answer your questions in turn.
Transparency International’s report ‘Corruption in Local Government: The Mounting Risks’ warns that an unintended consequence of changes such as the Localism Act and those proposed in the Local Audit and Accountability Bill may be to create an enabling environment for corruption.
The report notes that experts hold widely different views about the scale and prevalence of corruption in local government, but there was general consensus that recent changes would increase the risk of corruption happening in future.
It identifies sixteen recent legislative changes which increase the risks, as well as other trends such as the decline in scrutiny by local press and the move to more private sector out-sourcing. This report includes twenty-two recommendations, including that the Government should conduct a corruption risk assessment and strengthen whistleblowing procedures.”
The report was also discussed on 28th October in Parliament Commons second reading: Local Audit and Accountability Bill.
Q1.Does SCC acknowledge (as indicated in the report) that particular risks of corruption (in local government) include:
- Public procurement at needs assessment stage;
- Public procurement at bid design stage;
- Public procurement at award stage;
- Public procurement at contract implementation stage;
- Control and accountability over outsourced services;
- The revolving door of personnel between local authorities and private companies bidding to provide services;
- Planning discretion and influence regarding permissions to build decisions;
- Planning discretion and influence regarding “change of use” decisions?
A1.I would summarise your first question as asking if SCC acknowledges that the risk of corruption includes elements of risk at various stages within the procurement process and through the interactions between officers, councillors and private sector interests.
The simple answer is yes, the County Council does acknowledge that such risks exist. To be honest, these sorts of risk have existed since democracy was invented and the power that comes with authority can always be corrupted.
This Council along with all other authorities has a governance framework that mitigates such risk through its constitution, its contract standing orders and financial regulations and by having a small team that measures compliance with these. External and Internal Auditors help to measure and enforce that compliance.
While we are not complacent in this area, I do not believe SCC is any more or less exposed to these sorts of risk than others.
Q2.The Campaign for Change website article has asked the question “Does outsourcing make corruption more likely”?
Does SCC agree?
A2.Your second question asks specifically whether SCC agrees that outsourcing makes corruption more likely.
I understand the main points made in the Transparency International report and can identify with many of the reasons quoted as to why outsourcing leads to risk. Nevertheless, I prefer to agree with another point made in the report that states “the majority of local councillors and council officers observe high standards of conduct and very few misuse their positions to further their own ends. Outsourcing very often transfers risk to the private sector and I think our Council manages the tendering and evaluation process extremely well and has been commended upon that in the past.
Q3.The Spend Matters website article:
Highlights a few other issues and concerns from The Transparency International article:
- Failure to enforce section 106 agreements;
- the conflict of interest where councils make planning decisions about property they own;
- collusion in housing fraud or deliberately ineffective monitoring of housing fraud; and
- manipulation of electoral registration
What steps and measures will SCC take to address the issues raised here and in Q.1 and Q.3?
A3.Your third question refers to specific service areas where there may be conflict of interest for the Council, predominantly in planning and property issues. Our regulation committee and the planning committees of the district councils exercise the probity required to mitigate any potential conflicts and our register of members’ interests and hospitality registers endeavour to ensure that meetings between developers and interested parties are recorded and above board. Nevertheless, we will look at all of the recommendations in this report to see what more we can do.
Q4.A key recommendation in the TI – UK report is for the Freedom of Information Act (FOIA) to cover private contractors operating with public funds.
1, Does the council agree with this recommendation?
- Will the Council support a campaign to extend the FOIA in this key area?
A4.Your last question refers to the Freedom of Information act and asks whether the Council would support a campaign and agree that FOIA should apply to contractors spending public funds.
I cannot speak on behalf of the whole chamber today but my view would be that we would not. I agree with the transparency agenda but am conscious that this does have a cost to it. If we apply the FOIA to contractors who spend public money they too would have to incur more costs and this would be transferred on to the contracts we have. In many cases the contractor may claim exemptions for commercial reasons and this would frustrate members of the public and lead to claims of a lack of transparency.
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