Cheshire East Council 'failed to follow due process' over contracts

The former leader of Cheshire East Council has always denied making any money from contracts awarded to Core Fit Ltd

There was a "widespread failure to follow due process" in the way a series of contracts were awarded by Cheshire East Council, a review has found.

Whistleblowers raised concerns in 2015 about how the authority awarded contracts to a company run by the council leader's physiotherapist.

The internal review found senior managers "overrode" control measures so the contracts could be awarded.

Police investigated but said there was "insufficient evidence" to prosecute.

Council leader Michael Jones resigned in December 2015 after some fellow Conservatives began to raise questions about how the contracts for school fitness classes had been awarded to Core Fit Limited.

Mr Jones, who denied wrongdoing, claimed the audit report was biased and said the council had provided the police with "wrongful information".

An internal review into the contracts has been published on the council's website this week and will be discussed by a committee of councillors next week.

It detailed a number of occasions when council rules and government legislation was breached in the way Core Fit was allowed to work for the council.

'Preferential treatment'

The company had been running fitness classes in Cheshire East schools in 2014 without a contract being in place, meaning other firms were not able to bid to do the work.

It was paid £29,000 for the classes even though the relevant forms had not been approved.

The review said senior managers at the council then challenged a bidding exercise carried out by their procurement team in which Core Fit was ranked fifth out of 13 companies that had bid to run a new pilot school fitness scheme.

The bidding exercise was cancelled and Core Fit was given a £115,000 grant to run the pilot classes and a further scheme in wellbeing hubs.

The review also detailed how concerns had been raised that some classes had been taking place without the necessary insurance cover, parental consent or Disclosure and Barring Service (DBS) checks of staff criminal records.

The council's internal audit manager Michael Todd said the audit investigation began after contacts from whistleblowers who "raised concerns around preferential treatment in the award of contracts and a bullying culture within parts of the council".

He said there was a "widespread failure to follow due process and the council's constitution" which led to "management override" of the controls in place to prevent contract rules being breached.

His report does not blame any individuals involved.

The council's former chief executive Mike Suarez, chief legal officer Bill Norman and chief finance officer Peter Bates were all suspended in 2017 while their conduct was investigated by a panel which was partly looking into the way contracts were awarded.

All resigned before the panel came to a conclusion but the council said their suspensions were a "neutral act".

Mr Todd added that the process of awarding contracts is now "subject to far more stringent controls and monitoring, which coupled with organisational changes … would make it far more difficult for such a situation to unfold in the manner it did".

Core Fit Limited was dissolved in 2018.