Out of control
Is Somerset Council doing enough to look after the money that government (and you as council taxpayers) give to it to spend on services? A new report suggests, not as much as it could be doing.
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On 10 March we published an investigative piece titled “How did we get here” which examined the problems behind Somerset Council’s financial emergency. One of the issues highlighted in that article was a lack of financial control (you can read that here: “Lack of Control”). The source of that assessment was an external auditors report published by Grant Thornton.
Now however more information is coming to light that suggests even greater concerns about controls at the council and that to some degree the problem is still ongoing.
Other people’s money
On Friday we mentioned the issue with Glastonbury’s Life Factory project. Part of the Glastonbury Town Deal the project was to be delivered by the Red Brick Building. At the time we went to press the report of the council’s internal auditor, SWAP, had not been published.
Well it has been now and it bears close consideration.
The way the town deals (in Somerset there are two: Bridgwater and Glastonbury) have been funded is that the money allocated to them by central government is passed to Somerset Council. Somerset Council then acts as a banker to the various projects in each town deal. They should liaise with the Town Deal Board and the project owner and release money as it is needed. However that is supposed to be subject to the checks and balances that any banker would go through before releasing large amounts of money to a third party.
The issue at the Red Brick Building it turns out, is relatively simple. The project was due to cost just under £6m. Some £2.89m in funds from the town deal was allocated to the project with the rest due to be sourced via match funding.
Match funding is where the funds provided (usually by government or a government agency) underwrite the project and provide the basis to go out and find grants or local funding sources equal to the government funding.
There’s nothing either complicated or unusual about this sort of arrangement.