Cheshire East Council (CEC) has today made public a summary of the report of the Designated Independent Person (DIP) into the ill-fated project to build a waste transfer facility on the Lyme Green site in Macclesfield, at a cost of over £800,000.
The document has been produced in response to the public and media interest into the actions of Council officers and elected Members involved in the Lyme Green fiasco. It has been written by the Council's Interim Chief Executive, to provide an overview of the findings of the DIP's investigation.
The Council has declined to release the full confidential report of the DIP himself, for legal reasons. In February CEC announced that they will not release the report because it contains personal data and would lead to a breach of the Data Protection Act 1998.
They also said that making a redacted copy of that report available, in which all personal reference to individuals had been deleted, would not provide a document which was intelligible or helpful to those seeking to understand what happened at Lyme Green.
Speaking about requests to release the DIP's report at today's press conference, Interim Chief Executive Kim Ryley explained "The Council has taken the firm view, on the basis of legal advice, that it would be inappropriate for a number of reasons. It would be inappropriate because obviously the DIPs report contains personal information about the named individuals therefore is subject to the requirements of the Data Protection Act.
"It is inappropriate because we have legal agreements with a number of individuals that we would also be in breach of if we were to release the information. The report itself is legally privileged and therefore it can only be used for the purpose it was intended, it was never meant for wider public release in that way."
He added "The investigation would have been encumbered if any of those people had known in advance that there was a possibility of those findings being made public, it just would not have helped the process at all."
The summary, which contains quotes from the confidential report, states that the Council's inability to deliver the Lyme Green project successfully was mainly due to a serious failure of project management by a group of senior officers, rather than an individual, and their decision to set an unrealistic timetable for completion of the work to speed up delivery of the project. This was pivotal to corners being cut, work proceeding without planning permission and the Council's rules and EU Regulations being breached when procuring contracts.
The DIP says "There is no doubt in my mind that the ensuing lack of proper project management and consultation requirements, the unsatisfactory promotion of a planning application, and the lack of care at various stages, flowed from that decision taken by ... [a senior officer to procure the work in a particular way and in a short timescale]. The timetable was in my view completely unrealistic to obtain a proper planning permission."
The DIP is also critical of the failure to deal appropriately with the escalating costs of the Lyme Green project, which significantly exceeded the agreed budget. The shortfall was not reported to the finance officers and led to the Council having to abandon the badly managed project part way through its construction.
The DIP says "The budget shortfall continued to be regularly discussed in project team meetings ... but at no time was this communicated to the Finance and Business Service officers ... [who were not part of the project team and so did not attend these meetings] it was assumed that either the project sponsor or project manager was doing so."
Regarding the involvement of elected Members of the Council, the DIP concluded that the decisions taken were solely those of particular senior officers and that he found no evidence "to clearly show that elected Members put officers under undue pressure ... or coerced them in any way to take decisions or make recommendations".
He also states "I have found no direct evidence to indicate that elected Members at any time ... gave directions to officers to deliver the efficiency program [sic] or Lyme Green project on the basis of "cutting corners" or ignoring the Council's governance or compliance with EU procurement regulations."
Speaking about the release of the summary report, the Leader of Cheshire East Council, Michael Jones, said: "I made a commitment to make an authoritative and accessible summary version of the DIP's report widely available. This 26 page document fulfils that commitment, whilst respecting the particular grounds on which the DIP's report itself must remain confidential.
"It is intended to set out clearly all the key facts about the actions of Council officers and elected Members in relation to the Lyme Green project. It makes interesting reading, and is open and honest about the mistakes that were made. Nothing is hidden.
"Despite its unwelcome impact on the Council's reputation, this painful experience has left a positive legacy. It has helped us to develop the Lyme Green site to support local business and job growth, as well as visibly improving our project management and procurement activities. On top of this, it has pushed us to make much needed major changes in management roles, service structures, working practices, and organisational culture in the Council.
"The Lyme Green review has been thorough and time consuming. The necessary costs involved have meant that we have got to the truth of what happened, why things went wrong, and who was responsible."
The author of the summary report, Kim Ryley, explained that: "This easy to read document sets out the key events and decisions in relation to Lyme Green. It also reveals the DIP's findings on each of the specific allegations that were made about the actions of the individuals involved.
"My summary report makes clear the view of the DIP that poor project management, and a lack of care and diligence over the badly handled related procurement processes, caused the failure of the project.
"To ensure its authenticity, the summary quotes extensively and directly from the DIP's report itself. It provides only the minimum of narrative comment necessary to ensure a well structured understanding of the events that took place, of their implications, and of their consequences – both for the Council and for some of the key individuals involved.
"The DIP's positive comments about the actions of some Council staff and elected Members, in offering advice on and challenge to the project managers responsible, are also set out in my summary. The document shows the action taken by the Council to respond to the lessons learned and to the recommendations of the DIP."
A review of the Council's proposal to build a recycling station at Lyme Green Depot in Macclesfield, published in June 2012, revealed that the aborted plans had cost Cheshire East taxpayers over £800,000.
The review also confirmed that planning rules were broken, as the main contractor commenced work on the site before planning permission had been granted, officers did not comply with EU Procurement Regulations or ensure there was effective reporting to members of the council.
They also spent beyond the approved budget on the scheme breaking Finance and Contract Procedure Rules. The approved capital budget for the scheme was £650,000, but the total anticipated spend for the Lyme Green scheme at mid-May 2012 was £810,000.
Since the completion of the DIP report, seven officers whose actions were investigated in relation to the Lyme Green fiasco have left CEC and Cllr Michael Jones confirmed today that the total bill for their severance pay was about £110,000.
Speaking about these payments, Kim Ryley said "What the Council did here was minimum in terms of legal entitlements for individuals who chose to resign at various stages in this process. It is very clearly in the interest of the public purse to do it that way. Had this run its full course in terms of disciplinary and legal processes and appeals we could still be waiting for the outcome now and the bill would still be racking up. What we did not get in to is very substantial payoffs."
He added "We're looking at bare minimum entitlements of notice periods to be paid in lieu so people could be released as quickly as possible and we could move on."
The engagement of expert legal advice and of a Designated Independent Person to complete the investigation of allegations about the actions of a number of senior staff at the Council, in connection with the Lyme Green fiasco, has cost £225,000. Bringing the total cost for Cheshire East taxpayers to over £1million.
However, the Council announced today that they have reached an agreement in principle with local furniture retailer Arighi Bianchi for a purpose-built distribution centre on the Lyme Green site, enabling the Council to recoup some of the expenditure and resulting in a net loss to the Council of about £100,000.
Kim Ryleys commented "Much of that money has been spent in a way which opens up the site for further development which is very positive in terms of local jobs and actually allows us to develop the rest of the site even further once the warehouse facility is in place - so in net terms the actual cost to the Council, given we would have been spending money anyway at the site, is probably in the region of £100,000."
He added "There have been a number of positive outcomes from this unwelcome and unpleasant experience of this failure of project management.
"Certainly I think the Council's processes have been improved as a result and that will be true for all projects in the future. We have actually taken the opportunity to restructure management roles and responsibilities to make sure some of the underlying cultural issues in the organisation, which have been identified, have also been tackled and the site is now being developed in a way which brings job growth and prosperity to the area."
Arighi Bianchi Director, Nick Bianchi said "Our current distribution system is spread across the three sites within the town and this situation has been far from ideal and uneconomical. We have been searching for a single site location within Macclesfield for many years. With the recent approval of the new town centre redevelopment scheme, our main distribution site is set to become the new multi-storey car park and therefore the need to relocate is imminent.
"The fact that this site is on our doorstep is a great relief to us as prior to its availability, we were faced with the prospect of having to relocate our distribution centre out of Macclesfield, which would not have been acceptable."
Kim Ryley concluded "All the senior individuals that were the subject of allegations and subject of the investigation by the DIP and were criticised for their actions by the DIP are no longer employed by the Council. I think that is a demonstration of the fact we have moved on from that and we don't want to see this kind of process repeated in the future."
Click here to download the summary of the DIP's report.
Comments
Here's what readers have had to say so far. Why not add your thoughts below.
What about the members who were supposed to know what was going on? You know the ones, the then Leader, Wesley Fitzgerald, the then Portfolio Holder for Resources, and now Leader, Michael E Jones, and the most senior officer at the time, Chief Executive Officer, Erika Wenzel.
Where are they now? Well, Michael Jones is enjoying the media glory of being the current Leader of the Council, Wesley Fitzgerald is the Deputy Mayor and, in spite of objections from some councillors, will be the next Mayor of Cheshire East. Erika Wenzel? Not a member of course but, as CEO and therefore the most senior officer, she really should have been aware of what her staff were doing. As soon as things began to go wrong, she seemed to have a period of sickness absence, followed by a departure accompanied by £93,500. She has now vanished.
I still don't understand how the only member apparently touched by this matter is Rod Menlove, and I think those people who said this matter would never go away until the whole truth was revealed were right.