Bristol City Council broke rules on awarding contracts 203 times to the value of £69m last year

Bristol City Council officers broke the rules on awarding contracts for goods and services more than 200 times to the value of £69million last year, a report reveals.

That’s more than double the previous 12 months and has prompted external auditors to tell the authority to address the issue “as a matter of urgency” because it could be a sign of “irregularities” and an increased risk of fraud.

There were 203 occasions in 2021/22 where re-tendering procedures were not followed correctly, officially called procurement breaches, which equates to 14 per cent of all contracts awarded by the authority – almost one in seven.

That compares with 94 breaches to the value of £14million the year before, about 11 per cent of total contracts.

The council says an effective and transparent breaches process is in place to detect when regulations are not followed and that more training and a procurement policy, which the organisation does not currently have, will be introduced.

‘This issue should be addressed as a matter of urgency’

Auditors Grant Thornton’s interim value-for-money 2020/21 report, presented to audit committee members, said: “The overall level of breaches in both years is higher than we would expect and the increase and final value in 2021/22 is of some note.

“In our experience, high levels of breaches have been associated elsewhere with governance and procurement irregularities and, as such, the issue should be addressed as a matter of urgency.”

In a separate report to the committee on Monday, June 27, the huge rise was highlighted as a “significant governance issue” for the authority.

The annual governance statement, a legally required document alongside its financial statements that explains how the council ensures it is run effectively and makes appropriate decisions in the right way, said: “The number of breaches of the council’s procurement rules during 2021/22 significantly increased from 2020/21.

“The 2020/21 value-for-money report by the council’s external auditors has recommended urgent action be taken to address the high level of breaches.

“When the procurement rules are breached, there is an increased risk that the council enters into a contract which is not best value and/or is not the best way of achieving organisational objectives.

“Breaches also reduce transparency and fairness of decision making, which can increase the risk of fraud, conflicts of interest and reputational damage.”

Finance director Denise Murray told the meeting the high number of instances was “a bit of a surprise to us”.

She said: “Procurement breaches come in a number of forms.

“You will have breaches in the regulations, which is the legislative framework, and you will have breaches in relation to our procurement rules which cover a range of things.

“They deal with direct awards, retrospective extensions to orders, so some of this captures forward planning or the need for contracts to be extended in a timely manner in line with the contract.”

Grant Thornton recommended that the council should “continue to scrutinise and act to reduce contract breaches” by introducing procurement compliance training and having the figures monitored by audit committee or cabinet, which was not unusual in other authorities but did not happen at the city council.

A response in the report by the authority’s management said: “Whilst full compliance can never be guaranteed and ‘under-reporting’ of breaches, in particular, is an inherent possibility, an effective and transparent breaches governance process is in place to detect instances of non-compliance.

“Procurement compliance training will be more widely rolled out and actual compliance activity reported quarterly to audit committee via internal audit.”

It also accepted a recommendation to introduce a procurement strategy.

Bristol City Council was asked to comment further and said its response was in the report.

Grant Thornton’s report said: “In order to remain compliant with procurement legislation the council should follow its procurement rules and re-tender in line with current legislation.

“If these procedures and legislation are not followed then this is classed as a procurement breach and the council’s procedures require breaches to be formally acknowledged and recorded.

“An internal audit report on procurement compliance (August 2021) gave an opinion of ‘reasonable’ assurance but recommended further ways to strengthen governance arrangements and reduce breach numbers.”