Mendip ordered by auditors to make information on commercial investments more open to the public

  Posted: 28.04.21 at 17:29 by Daniel Mumby - Local Democracy Reporter

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The local district council has been ordered by its auditors to make information about its commercial investments more readily available to the public.

Mendip District Council has invested in a number of commercial properties in the last few years, using the income from rent to fund front-line services in light of diminishing grant funding from central government.

Ernst and Young carried out a formal investigation into the council after the Somerset Independents campaign group complained that there was a lack of transparency regarding these investments.

The council said it had now put changes in place which would ensure a more coherent and transparent approach going forward.

All four district councils in Somerset – Mendip, Sedgemoor, Somerset West & Taunton and South Somerset – have invested in commercial property in order to fund front-line services, with periodic updates coming before each council’s executive or cabinet.

In Mendip’s case, all decisions on commercial acquisitions are made by the phoenix sponsorship board or the asset management group – both of which are chaired by council leader Ros Wyke.

Both committees’ meetings are advertised in public, but their decisions are all taken in confidential session due to their commercial sensitivity.

Denise Wyatt from the Somerset Independents group told the council’s audit committee in late-January that she had lodged a formal objection to the council’s accounts, citing a lack of transparency about these investments.

Speaking at the time, she said: “This authority claims openness and transparency, and yet as a council you appear to ignore the law of meetings, as it applies to local government.

“You are quick to apply the law when you want to move to private session, such as with Easthill, but in other respects you seem to fail to apply the law and best practise.

“You are not here to rubber stamp reports. You are here to question.

"I had to do it, because this committee failed to do so. You must challenge, challenge and challenge again.”

Ernst and Young considered the objection in full, with its findings being published before a meeting of the audit committee this evening (April 28).

The objection raised by the Somerset Independents covered the following points:

* Potential conflicts between the scrutiny board and the cabinet
* Property investment risks not being sufficiently managed
* Property investment decisions “lacking openness and transparency”
* A general lack of scrutiny regarding the council’s decisions
* A lack of “sufficient checks and balances” regarding the council’s finances

A spokesman for Ernst and Young said: “We accepted part of the objection, namely the aspect relating to property investment lacking openness and transparency – particularly in relation to the quality of the published minutes of the phoenix sponsorship board.

“The council confirmed that in its view the board’s minutes did not provide a reasonable fair and coherent record.

"The council took action as a result of the objection to improve the quality of the minutes, re-approving an improved version of these on December 23, 2020.

“We judged the council had accepted the deficiencies, and put in place adequate remedial actions to re-draft and approve the public minutes. Therefore, the objection had a positive impact.”

The council confirmed it had issued new, improved minutes for the phoenix sponsorship board, providing more details about the authority’s investments, and that it would ensure future decisions were taken in a more open manner.

A spokesman said: “We took action as a result of the objection to improve the quality of the minutes, re-approving an improved version of these.

“We have made changes to our procedures regarding the production of open minutes for items considered in confidential session to ensure they provide a reasonable, fair and coherent record.”

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