Council faces £370m risk over uninsured buildings

The number and identity of the Wakefield Council-owned buildings affected has not yet been revealed

A council has been exposed to a £370m financial risk after it was found a number of buildings it owned had not been insured for almost three years.

A report said Wakefield Council also faced "significant reputational risk" unless "sufficient and appropriate insurance cover" for these properties was established.

The number and identity of those local authority buildings currently uninsured, or under-insured, has not been publicly revealed, but some were described as "heritage buildings".

During an audit committee meeting on Monday, the council's chief legal officer stressed that the lack of insurance cover related only to the rebuild value of properties, not to council staff working within them.

The authority was expected to agree a contract with a new insurance provider this month after a procurement process closed in early December and the contract was expected to start in April, according to the Local Democracy Reporting Service.

Committee members were told the length of time it had taken to address the issue, as well as the buildings affected, would be discussed in private.

'Reputational risk'

An interim report by external auditors said senior management had first been made aware of the issue in October 2022.

The report said: "Council officers alerted senior management, including the chief finance officer, of underinsurance and lack of insurance coverage for several buildings, with a book value of £18m and a potential rebuild value (the value used for insurance purposes) of up to £217.6m, which poses a potentially significant financial risk and reputational risk."

Auditors subsequently concluded the list of buildings without insurance provided two years later, in November 2024, suggested the number and value of buildings without insurance had increased since the problem was first raised.

Their report estimated a total exposure of up to £370m based on rebuild value.

According to the report, the council's insurer had withdrawn insurance because there had been a lack of progress by the council in clearing "risk improvement actions" following site surveys.

In January 2022, the insurer had notified the council of its intention to reduce insurance cover on four properties and to withdraw insurance on five unoccupied properties from 1 April that year.

The report also highlighted a number of areas where the council had taken steps to address the issue, including the adoption of a new estate strategy for 2025-28.

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