A recruitment agency set up by Northamptonshire County Council with other authorities has come under scrutiny.
The authority spent £10m with Opus LGSS in the six months between September 2017 and this March, according to figures recently added to the council’s website.
The agency, which was created last year as a joint venture with Suffolk County Council’s recruitment agency Opus People Solutions, NCC and Cambridgeshire County Council, recruits temporary staff for the Northants and Cambs authorities.
It was awarded a £63m five-year contract from NCC in August last year.
However, questions are now being asked about whether the initial contract went out to tender and how it is being governed.
An internal audit undertaken by LGSS, a service provider which is jointly owned by NCC along with Cambridgeshire County Council and Milton Keynes Council, found that governance of the agency was ‘satisfactory’.
Chairman of NCC’s audit committee Bill Jessup asked for the report to be put before yesterday’s (May 25) committee meeting so that councillors could take a closer look at the agency.
Mr Jessup asked a member of LGSS’s audit team: “What was the competition process through which Opus LGSS won the contract?”
The LGSS audit member replied: “The cabinet report does not make reference to how this arrangement was made.”
The audit committee has now decided to ‘dig into the matter further’ and a report will come back to the next committee meeting on June 22.
The internal audit into LGSS Opus by LGSS found ‘no service/individual who is responsible for managing the arrangement with OPUS LGSS on behalf of NCC.”
It discovered there were ‘inconsistencies’ around ‘responsibilities’ for dealing with a trace on a DBS check.
A spot check of 10 timesheets found that an overpayment of £3,000 had been made, which Opus LGSS has made arrangements to recover from the staff member.
Opus LGSS appears to have only been discussed by councillors in a meeting format on one occasion. A report to NCC’s cabinet in November 2016 outlined the initial proposal for the agency and gave then LGSS managing director John Kane, along with cabinet member for finance Robin Brown and the authority’s chief finance officer, delegated authority to negotiate an agreement ‘whereby NCC and potentially other LGSS partners join a new publicly owned Joint Venture Company to provide temporary agency workers into NCC’.
The Opus LGSS agency is based at NCC’s head office One Angel Square and has another base at Cambridgeshire County Council’s head office in Shire Hall. According to its website it has eight staff.
It is currently recruiting for a large number of vacancies which include a construction project worker for NCC and a council tax officer.
The spend with the agency was not included on NCC’s website, meaning the council did not comply with HMRC Treasury guidelines. It has only appeared online in the past fortnight. The spreadsheet records that payments were made to Opus LGSS on a weekly basis and were regularly more than £400,000 a week. It is not recorded how many staff were provided.
According to Companies House, Opus LGSS was incorporated on October 27, 2016. LGSS’s director of business services Mark Ashton and LGSS’s head of procurement Paul White are listed among the directors.
NCC is currently in a financial crisis and Secretary of State for Local Government James Brokenshire sent in two commissioners to oversee the governance and finance of the council last week.
Yesterday it emerged that the council may not have balanced its budget in the past financial year which could mean the authority set an unlawful budget. If that is the case it is not known what the next course of action will be as it has not happened in the country before. Auditors KPMG are currently suggesting there is a £59m overspend in last year’s budget and will make a final call in their final audit expected next month or in July.
A spokesman for Northamptonshire County Council said: “At yesterday’s audit committee the chairman asked a question about how the LGSS Opus arrangement was procured.
“It was agreed by the committee that information is presented back to the next meeting about this issue.”