'Damning' report finds council may have broken law

A report found Middlesbrough Council may have broken procurement law

A "damning" report has found a council may have broken procurement law when it awarded contracts worth more than £4m.

Middlesbrough Council's activity was investigated by an external auditor which concluded non-adherence to the rules was "pervasive" and some large contracts were awarded without formal approval.

The report by Ernst & Young said the volume and breadth of weaknesses between 2021 and 2023, when the council was led by a Tory Independent administration, was of "significant concern".

A spokesperson for the now Labour-led council said the report related to the 2021-22 and 2022-23 financial years, and did not reflect the "significant work" undertaken to improve governance, culture and financial sustainability since March last year.

Six risks were found during its assessment of council activity during this period, one concerning large contracts awarded for external social work support at the estimated cost of £4.3m.

The findings also suggested practices which did not meet the requirements were "well established and widely adopted".

The council was led by a Tory Independent administration until Labour gained power in May 2023.

Councillor Mick Saunders, group leader of the Middlesbrough Independent Councillors Association (MICA), believes a police investigation should be launched to "rule out criminality".

'Remains precarious'

Since Labour gained control of the council, a sale of assets and buildings to raise capital has been approved.

Last year, the council was told it must improve its culture within 12 months, or face the possibility of government intervention over bullying claims and financial concerns.

The council also went on to successfully apply for £13.4m in exceptional support from the government, which must be repaid with full interest.

Overall, the report said the financial position of the council "remains precarious".