BBC Scotland is broadcasting a documentary tonight (20th September) titled ‘Scotland’s Property Scandal’ on BBC1 Scotland (Sky Channel 971) after the news at 22:35. It will also be available on the BBC iPlayer for those of you who don’t have access to BBC Scotland.
The programme investigates the evidence of possible fraud, wrong-doing and incompetence in the Property Conservation Department at Edinburgh City Council. This department is responsible for overseeing the statutory notice system, that seems unique to Edinburgh, where private buildings with multiple owners (e.g. tenements or blocks of flats), can be issued with a notice by the Council stating that the building is going to be repaired and that the cost will be passed to the owners. These repairs are commonly to roofs, or external masonry not only to make sure that they are wind and water tight, but to make sure that there is no danger to passing pedestrians from falling slates or blocks of stone.
Council surveyors arrange the work through ‘approved contractors’ and recoup the cash from owners, the local authority also receives 15% of the final bill. The value of statutory notices issued by council surveyors has increased dramatically in recent years, from £9.2m in 2005 to more than £30m in 2010, that’s £4.5 million in fees to the Council!
The problems at the Council were first highlighted by a group of old established Edinburgh roofing companies that found that while they were included on the approved lists of contractors, they were no longer receiving any work, despite having a long history of working with the council. One of those companies approached us here at Tenders Direct and it was immediately obvious to us that there were serious problems with the way that the approved lists were being drawn up and the way in which contracts were being awarded.
The companies approached the Council with their concerns and as often happens were given the brush off. This time though the contractors were determined to pursue their claims, as there was little work available elsewhere and one by one these family firms were going out of business as the council work dried up. Eventually they managed to arrange a meeting with Mark Turley, Director of the Council’s Services for Communities, who acknowledged that there was a problem. The Council then appointed Deloitte to carry out an investigation into the running of the department and the Fraud Squad at Lothian & Borders Police is conducting a parallel investigation.
So far 15 members of staff, half the department, have been suspended pending further investigation, but the casualties in this affair may still have a long time to wait for any redress. It will take years to investigate the cases of the residents of Edinburgh who may have been overcharged and/or been subjected to sub-standard workmanship. All repairs, other than emergencies, have been halted, which means that the small family owned building and roofing contractors still don’t have enough work and are struggling to stay in business long enough until the flow of work restarts.
The senior officials and elected members of Edinburgh City Council are culpable in this affair, as they allowed a department, with a significant spend, to operate on its own, outside normal council procurement procedures. This was allowed to occur, as for some reason construction work, is considered to be different from all the other goods and services that the Council purchases.
The lessons to be learned here are that as a potential contractor if you think the procedures being followed are not transparent and above board, then complain, loudly and do not be put off easily. If you are a senior official in a public authority, listen to the complaints and take them seriously, do not just believe that your organisation is doing everything as it should. Otherwise you may end up in the unholy and very expensive mess that Edinburgh now finds itself and that’s on top of the tram fiasco!