Auditor General for Wales says “unlawful action” at Town Council resulted in loss of £234,000 – part covered by increased council tax

Failures in decision making and internal controls at Connah’s Quay Town Council resulted in loss of £234,000 says the Auditor General for Wales.

Connah’s Quay Town Council has incurred a cumulative deficit of over £234,000 in the operation of the Quay Café since 2011, according to a report issued today by the Auditor General for Wales.

The report states that the council did not give due consideration as to what powers it had to open Quay Café, the decision was based on a poorly prepared business plan, and as a result, the decision to open the café was unlawful.

The report notes: “In order to balance its finances, these losses have been met by the Council setting a higher precept than it would otherwise have needed to set. This has resulted in increased council tax charges to residents of Connah’s Quay.”

Today’s report was issued in the public interest to draw attention to the significant deficit incurred by the Council and their failures in decision making.

The report makes three clear recommendations for the council and these are:

– To undertake a full option appraisal for the operation of Quay Café, incorporating a full financial appraisal of each option;
– To ensure appropriate advice is received prior to making decisions on the provision of new or novel services;
– To review the services it provides and ensure that it understands the statutory basis on which it provides those services.

Connah’s Quay Town Council now has one month to consider the issues raised within the report and to make a decision on whether to accept these recommendations.

The Auditor General for Wales, Adrian Crompton said today: “Given the scale of the deficit incurred at Connah’s Quay Town Council, I believe it is important that the public has a full and proper awareness of the events concerning the Council. When it opened the café, the Council did not have the statutory authority to do so and its decision was not supported by a clear and coherent business plan. As a result the decision was, in my view, unlawful.

“There are lessons to be learnt not just by this Council, but by all town and community councils in Wales. The public interest reports issued today serve to highlight the shortcomings at four different town and community councils. Councils need to be innovative in dealing with community issues, but they must at all times display appropriate risk management and operate within their legal framework.

This report is issued alongside public interest reports for Glynneath Town Council, Maenclochog Community Council and Cynwyd Community Council. The reports set out significant failures in governance arrangements and inadequacies in financial management and internal control at all four councils.

Mr Crompton added: “All four councils now have an opportunity to demonstrate that the risk of such governance failures recurring is reduced to a minimum. The public need to be assured that town and community councils have proper governance arrangements in place to manage the activities of the council both financially and administratively.”

A spokesperson for Connahs’ Quay Town Council said:

“The Council note the content of the report issue by the Auditor General for Wales on 19^th June in relation to its investigation into Quay Café. Until we have had sufficient time to fully consider the details of the report then we are unable to comment further.

The report will be considered at a Special (Public) Meeting of the Council which we are in the process of organising after which a full response will be issued.”

You can read the full report into Connah’s Quay Town Council in this PDF.