Public interest report – January 2023

Cheshire East Council has published a public interest report made by Grant Thornton, the council’s external auditors for the years 2012 – 2018, relating to procurement with a local company in 2014/15.

Report in the Public Interest on the impact of the Council’s culture and governance arrangements during 2014 - 2018 (PDF, 1.2MB)

The external auditor and their role

The accounts of all local authorities must be audited in accordance with Local Audit and Accountability Act 2014.

Grant Thornton was appointed as Cheshire East Council’s external auditor for the years 2012/13 – 2017/18.

Cheshire East Council’s current external auditor is Mazars. However, as this report relates to the period for which Grant Thornton had audit responsibility, Grant Thornton produced this report.

Further explanation of Grant Thornton’s role and responsibilities can be found in this report (PDF, 300KB).

What is a public interest report?

Schedule 7 of The Local Audit and Accountability Act 2014 places a duty on the external auditor to consider whether any matter that comes to its attention during an audit should be reported in the public interest. 

Paragraph 58 of Auditor Guidance Note 07 (PDF, 426KB) states that when considering whether, how and when to report, auditors should weigh up:

• the significance of the matter or weakness in arrangements which has come to their attention or which they have identified during the audit;
• whether the body itself recognises the need to address a concern and is taking appropriate action in a timely way;
• what information is already in the public domain and whether there is merit in bringing the matter to the attention of the public in the interests of openness, transparency and accountability or to facilitate dissemination of learning to other public bodies;
• which form of reporting is likely to be most effective in helping the audited body to understand the significance of the matter and the need to take action; and
• whether previous reporting has been acted upon and, if not, whether more prominent reporting – such as issuing a statutory recommendation or a report in the public interest – is now necessary.

In their report, the external auditors highlight two of the five considerations specifically with reference to the matters considered in this report, noting that the report “is not calling into question current affairs at the Council and is not intended to criticise any incumbents”:

• the significance of the matter or weakness in arrangements which has come to their attention or which they have identified during the audit; and
• what information is already in the public domain and whether there is merit in bringing the matter to the attention of the public in the interests of openness, transparency and accountability or to facilitate dissemination of learning to other public bodies.

Grant Thornton go on to state that the public interest report is required to impartially record the nature of the events in 2014/15 and the actions taken by the Council over the last 7 years.

In the view of the external auditor, “…there remains a public interest in these matters being aired publicly and analysed, both for accountability purposes for the local electorate and more widely to identify the underlying causes for the benefit of the local government sector as a whole.”

They continue, “The public interest in the issuing of this report is to ensure that the electorate of Cheshire East is finally appraised of the events set out here, given that prior to this they have been reliant on partial media reporting. It is also of public interest to report upon the Council’s successful track record in addressing the previous failings. The report looks out beyond to the wider local government sector to illustrate both what can go wrong and how an authority can do its best to turn this round”

The report makes reference to an independent review into the culture at the council.

What this report is about

This report considers, in detail, the events, circumstances and organisational improvement following concerns raised about procurement with a local company in 2015.

The issues and events reported concern the culture of the council, the role and conduct of the former leader of the council, governance processes and decision making.

The external auditors, Grant Thornton, determined that this report should be published as a public interest report, so that the public is appraised of the events and assured about the council’s successful track record in addressing these issues, and that other councils can learn from the report’s findings.

What happens now as a result of this report

The council has a duty under the act to publish the auditor’s report, issue a notice to bring the report to public attention, and is required, under the Local Audit and Accountability Act, to consider this public interest report at a meeting.  A special council meeting will be called to discuss the report.

The relevance of the report relevant to the wider public sector

The external auditor states, “The report looks out beyond to the wider local government sector to illustrate both what can go wrong and how an authority can do its best to turn this round.” And “A key learning from this report for the sector is therefore that the inherent weaknesses identified here could create governance difficulties elsewhere in the future. Sector leaders, including Government should, in our opinion, now give this further consideration. We hope moreover that this report will encourage the ongoing debate around the effectiveness of the standards regime for local government and support mechanisms for both officers and members facing the same intractable difficulties.”

Why it has taken seven years to produce the report

The external auditor has stated: “The report has been a number of years in the making and relates to matters at the Council over a four-year period, ending in 2018. It is highly unusual for an audit report of this nature to relate to so many years ago – but in this case, as a lengthy police investigation commenced in late 2015, it was only possible for Grant Thornton to return to consider the matters once the police had concluded its interest.

Minutes and agenda

Agenda and minutes for Council on Wednesday, 1st February, 2023