Independent audit under way into energy decision failures

An independent audit is to be carried out into various errors which have led to an increased cost in energy for Liverpool City Council.

A report to this morning’s Cabinet requested the council transfer to a new electricity supplier, Crown Commercial Services, while a search gets under way for a new longer term electricity and gas supplier.

This is because the council’s existing energy supplier, Scottish Power, is no longer supplying commercial customers.

It means a previous Cabinet decision to extend their contract cannot be implemented.

It will cost the council an estimated additional £4.5 million and will also impact maintained schools, and Merseyside Fire and Rescue Service, as the contract covered their supplies too. The overall impact equates to an increase in energy costs from £10.6m to £26m.

At this morning’s meeting, Chief Executive Tony Reeves apologised to the Mayor and senior councillors for control failures and errors in the decision making process which meant Cabinet was not fully aware of this.

He added: “A procurement delay has now led to an increased cost of estimated £4.5 million to the council. As a result of this, we will commission an independent audit and a lessons learned exercise. I will ensure that the findings of both will be published to ensure transparency.”

Deputy Mayor and Cabinet member for Finance, Cllr Jane Corbett, told the meeting: “There are clear lessons to be learnt from the process to date, and it’s important that we act to ensure our control measures and processes are robust so that we never find ourselves in this position again.”

Cabinet granted permission for up to £4.5 million to be drawn down in reserves to cover the expected rise in costs, although it is hoped the council can make savings in other areas to cover the shortfall. 

The report can be read in full here: https://councillors.liverpool.gov.uk/documents/s274954/Procurement%20of%20electricity%20supplier%20Crown%20Commercial%20Services%20CCS%20-%20Amendment%20to%20previous%20cabine.pdf

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