Report at city council labels £17m emergency accommodation spend “unlawful”

In the report, which was issued under Section 5A(3)(a) of the Local Government and Housing Act 1989 and Section 114A (2)(a) Local Government Finance Act 1988, Monitoring Officer Graham Kitchen and Section 151 Officer Christine Marshall said there was “no evidence of governance authorising the payments, nor compliantly procured contracts” attached to the payments.

The emergency accommodation payments were made over 11 years, between 2015 and 2026, and totalled around £17.4m, according to the report.

Just over £7.7m of the £17.4m was paid to a single provider over the period.

The transactions were initially brought to the monitoring officer's attention in July 2025 as part of a freedom of information request.

A broader review of the council’s transactions was later commissioned, which the joint report said found "no evidence of governance authorising the payments nor compliantly procured contracts" with the providers throughout the 11-year period.

The report was published on Friday (16 January) and was due to be considered by Cabinet at a meeting last night (20 January).

It labelled the payments as "unlawful" on the basis that there was a failure by council officers to procure the emergency accommodation provision lawfully, put written contracts in place, and observe internal governance requirements.

The seriousness of the apparent failures and values involved met the tests for issuing reports under section 5A of the Local Government and Housing Act 1989 and Section 114A Local Government Finance Act 1988, the report added.

Among the findings, the report stated that payments to at least six providers, which exceeded £500,000 for their services, breached the council's constitution.

On these payments, the report stated that the decisions to enter into the arrangements were key decisions under the council’s constitution and required either cabinet member approval or a cabinet decision.

It said: "They should also have been included on the Forward Plan. There is no evidence these arrangements were included on the Forward Plan or that Cabinet Member approval/Cabinet approval was obtained or even sought."

The report acknowledged that the council’s constitution provides that a director may enter into contracts up to £ 500,000 in value.

However, it went on to highlight paragraph 5(c), Part 4, Section 11 of the Financial Regulations of the council’s Constitution which "stipulates that expenditure may only take place where authorisation has been given and procurement and Contract Rules are followed".

The report added that Paragraph 5.4.18 of the Financial Regulations requires that “all orders for supplies, works and services… are placed only by appropriate persons and are correctly recorded… and services are made in accordance with the Council’s Contract Rules”.

In addition, it noted that Paragraph 5.4.23 of the Financial Regulations also requires that “appropriate evidence of the procurement transaction… are retained and stored… in accordance with Contract Rules”.

The report said: "As such, a recorded executive decision, whether via delegated powers or Cabinet Member or Cabinet decision, was required in respect of Payments to all Providers.

“There is no evidence of such decisions having been taken via any legitimate means.”

Elsewhere, the report said that the council had arrangements with at least nine providers that met the threshold required under the council's contract rules for a formal tendering process to be completed.

However, there was "no evidence" that the council published a tender for the contract, the report noted.

It also highlighted a rule that, where arrangements with a value of less than £25,000 are entered into, a written record of the quotation must be kept. This record should include the specification of services, payment provisions, termination rights and any key terms.

The report said there were at least 13 cases of providers with arrangements valued at less than £25,000 where this rule was not complied with.

The officers went on to make six recommendations in the report, including that the emergency accommodation procurement and contract position be "urgently addressed by officers to bring it within legal, constitutional and contractual requirements.

It also recommended that an external provider deliver training to council officers on the local authority's statutory duties relating to procurement, and that senior officers undertake a comprehensive review of all existing arrangements with third parties to ensure they have been lawfully procured, and appropriate internal governance requirements have been met.

The local authority should carry out a thorough investigation and take the necessary action if an officer's conduct is found to have caused the council to act unlawfully, the report added.

Adam Carey