Dan Peters 21 March 2019

Review finds lack of due diligence over council's commercial workspace project

Review finds lack of due diligence over councils commercial workspace project image

King’s Lynn & West Norfolk BC should ‘build on the lessons learned’ from the construction of a state-of-the-art commercial workspace, the council’s chief executive has said.

A review of the King’s Lynn Innovation Centre (KLIC) scheme involving the council and Norfolk and Waveney Enterprise Services (NWES) found it ‘required greater management oversight and a more thorough approach to deliver the project and identify risks’.

The review found ‘no evidence’ of due diligence being carried out by the council on NWES before the start of the project and that ‘strong personalities from all parties often resulted in a failure to agree on major decisions in a timely manner or even at all’.

NWES was later hit by financial problems, including filing late accounts with Companies House and cash flow problems, and last year missed the deadline for repaying a £2.75m loan.

The review, commissioned by council chief executive Ray Harding, read: ‘On the basis of the work undertaken, our final conclusion is that the project was very heavily focused on achieving the outcomes, which it has done successfully.

'However, this has come at the detriment of ensuring sound controls to mitigate financial risks and robust project management operations.’

The council’s audit committee now wants to monitor all of the current major projects underway so that any lessons learned can be immediately applied.

Mr Harding said: ‘The report has highlighted lots of lessons to be learned, particularly around our processes.

'This is the first project of this type that we have been involved in, where a third party has run the project.

'It has clearly shown gaps in our procedures for monitoring.

‘Importantly, despite reports to the contrary, millions of pounds of taxpayers’ money have not been lost as the town has a full and functioning innovation centre, an iconic building, and businesses that are growing and developing as a direct result of its existence.

‘We will work hard with councillors and the audit team to review and tighten up our processes to ensure we are not exposed to this level of risk in the future.’

Mr Harding added the council should ‘build on the lessons learned so that the future regeneration of the town is not jeopardised by fear of taking on ambitious projects’.

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