Are councils by-passing public scrutiny?

PUBLIC SECTOR FINANCE Anti-roads campaigners may have shown up a loophole that is leading to unnecessary secrecy. By Paul Gosling

Anti-roads protesters in the North-east claim to have uncovered a "black hole" in the auditing system that allows hundreds of millions of pounds of road building each year to be approved without proper checks. Campaigners have been in conflict with Newcastle City Council for three years as they tried unsuccessfully to force the authority to disclose its figures for justifying the Cradlewell by-pass, which opens later this month.

The pounds 12m new road was given the go-ahead after Newcastle council submitted a cost-benefit analysis to the Department of Transport, applying for a Transport Supplementary Grant. But the figures used by Newcastle council are being questioned by campaigners. It was when Geoff and Penny Stansfield, owners of a local hotel, attempted to object to the calculations that they found there was a problem about audit jurisdiction.

Andrew Foster, controller of the Audit Commission, which audits local authorities, wrote to Mrs Stansfield saying: "Transport Supplementary Grant is distributed by the Department of Transport, according to conditions laid down by the Government and the department. Those conditions do not require the audit of applications for grant and the commission and its auditors, therefore, have no remit to audit such applications."

Yet Robert Sheldon, chairman of the House of Commons Public Accounts Committee, also wrote to Mrs Stansfield, on behalf of the National Audit Office, responsible for Government departments, saying: "While the National Audit Office is responsible for ensuring that money voted by Parliament is properly accounted for, it is specifically excluded from access to the accounts or records of local authorities and has no authority to audit the accuracy of information which local authorities use to prepare their bids or to check how the grant is actually applied once it has been approved. The National Audit Office relies on certificates from the District Auditor, appointed by the Audit Commission, to obtain assurance that actual expenditure is fairly stated and has been properly incurred in accordance with the conditions under which the grant was approved."

Meanwhile, Peter McNamara, formerly head of Newcastle's highways department, refused to release the calculations to local people as "a matter of principle" adding that "there is no requirement on us to provide this information to other people".

As a result, Newcastle council has been involved in an ill-tempered and festering dispute with the anti-roads campaigners, that has led to the council's annual accounts being challenged, and an objection being lodged against the district auditor for alleged wilful misconduct in failing to audit the cost-benefit analysis. Unprecedentedly, the Audit Commission appointed an outside independent auditor to review the work and approach of the Newcastle district auditor, who was found to have acted correctly. But the dispute has taken up many hours of Audit Commission business.

Both the Audit Commission and the National Audit Office maintain that the dispute does not indicate that there is anything wrong with the current system. Newcastle MP Nick Brown is not so sure, having asked several Parliamentary Questions on behalf of the local protesters to try to bring information into the public arena, though he is not persuaded by the campaigners' case.

Mr Brown says it is not surprising that the council's case was challenged by local people. "They only had the local authority's word on the figures, which puts the onus on the ordinary citizen to become an expert overnight," says Mr Brown. "It is cumbersome and prone to delays, and the council was very secretive, but I am not satisfied that the process was unfair. I don't think the procedure is satisfactory, I would like to see more candour. There should be more in the public domain, though I can't say the decision-makers were unreasonable."

Friends of the Earth argues that if the decision-making and the figures behind them were more open, then different decisions would in fact be taken. Roger Higman, FoE's senior transport campaigner, says that when the National Audit Office did check the Department of Transport's projections for road usage they were found to be broadly accurate - but only because the gross over-estimates in the South were balanced out by the gross under- estimates in the North.

FoE believes that if expenditure on national and local schemes were fairly compared, then there would be much less major road building, and far more minor road improvements. "The money available for small-scale schemes has been limited," says Mr Higman. "There is good evidence that the rate of return for local road building and minor works is much better than for national road building. The Department of Transport does not accept this as it believes that local authorities over-estimate their figures."

It is rumoured that the Audit Commission is seriously considering checking the figures used by local authorities for cost-benefit analyses, to prevent any repetition of the Cradlewell row. However, no one at the commission was able to confirm whether this was correct.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

PROMOTED VIDEO
Sport
Luis Suarez and Lionel Messi during Barcelona training in August
footballPete Jenson co-ghost wrote Suarez’s autobiography and reveals how desperate he's been to return
Money
Welcome to tinsel town: retailers such as Selfridges will be Santa's little helpers this Christmas, working hard to persuade shoppers to stock up on gifts
news
Arts and Entertainment
Soul singer Sam Smith cleared up at the Mobo awards this week
newsSam Smith’s Mobo triumph is just the latest example of a trend
News
Laurence Easeman and Russell Brand
people
Sport
Fans of Dulwich Hamlet FC at their ground Champion Hill
footballFans are rejecting the £2,000 season tickets, officious stewarding, and airline-stadium sponsorship
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Compensation and Benefits Manager - Brentwood - Circa £60,000

    £60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

    Data Analyst/Planning and Performance – Surrey – Up to £35k

    £30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...

    IT Systems Business Analyst - Watford - £28k + bonus + benefits

    £24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

    Markit EDM (CADIS) Developer

    £50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

    Day In a Page

    Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

    Wilko Johnson, now the bad news

    Former Dr Feelgood splits with manager after police investigate assault claims
    Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

    Mark Udall: The Democrat Senator with a fight on his hands

    The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
    New discoveries show more contact between far-flung prehistoric humans than had been thought

    New discoveries show more contact between far-flung prehistoric humans than had been thought

    Evidence found of contact between Easter Islanders and South America
    Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

    Cerys Matthews on Dylan Thomas

    The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
    DIY is not fun and we've finally realised this as a nation

    Homebase closures: 'DIY is not fun'

    Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
    The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

    Air New Zealand's wizard in-flight video

    The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
    Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

    Pumpkin spice is the flavour of the month

    The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
    11 best sonic skincare brushes

    11 best sonic skincare brushes

    Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
    Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

    Paul Scholes column

    I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
    Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

    Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

    While other sports are stalked by corruption, we are an easy target for the critics
    Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

    Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

    Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

    A crime that reveals London's dark heart

    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
    Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

    Lost in translation: Western monikers

    Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
    Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

    Handy hacks that make life easier

    New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
    KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

    KidZania: It's a small world

    The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker