Call for police to take further action after Caerau audit finds public money paid to a company that didn’t exist

Ted Peskett, local democracy reporter

A number of councillors are putting more pressure on police to take further action on the damning findings of a council’s internal audit report.

An internal audit report that looked at Bridgend County Borough Council’s (BCBC) involvement in a poorly executed insulation installation project in Caerau revealed that public money was paid to a company that didn’t exist.

Other findings in the report included indications of potential breaches of the council’s Members Code of Conduct and that no due diligence checks were evidenced for the companies used to undertake the work on houses.

Following the publication of the internal audit report, South Wales Police said that no further action was required.

However, a number of councillors from various political groups at Bridgend County Borough Council (BCBC) are now calling on South Wales Police to explain how they came to this decision.

More than a hundred homes in Caerau faced issues with damp and mould due to poor insulation work carried out ten years ago.

The cost of rectifying the damage has been set at £3.5m – with £2.65m coming from the Welsh Government, subject to the submission of a business plan by BCBC, and £855,000 from the local authority.

Work on 25 of the properties was done by Green Renewable Wales (GRW) Ltd and associated companies – who were contracted by BCBC using funds from the Arbed Scheme.

The director of the now dissolved GRW, Phil White, who died in October was a BCBC councillor at the time.

Councillor for Pen-y-fai, Cllr Altaf Hussain, is calling on the police to re-think its decision not to launch an investigation.

He said: “The council handed over £316,192 to GRN for work which was later found to be totally unsatisfactory. The properties involved have been subject to dampness, water incursion and many other problems and the council has now been told that it will cost £30K per property to put right.

“The council is having to find £855K from its coffers to rectify these faults. This is public money and from what I can see, no–one within the authority has been held accountable for the failings outlined in the audit report.

“I have asked Chief Constable Jeremy Vaughan to appoint [a] fraud squad and other officers to look into what happened.

“The internal BCBC inquiry was hampered because the officers involved no longer work for the council so the inquiry had no jurisdiction to interview them.

“The police face no such restrictions and it is important to find out whether it was corruption or incompetence that was to blame.

“We need to know if any of the council officers involved in the awarding of this contract and its subsequent management can be charged with misconduct in a public office.”

‘Buck has not stopped anywhere’

A number of companies were sub-contracted by GRW, including one called Sustainable Building Services Ltd (SBS) which Mr White was also a director.

The internal audit report concluded that although Mr White correctly “declared that he was a Director of Green Renewable Wales Ltd and SBS Ltd along with other companies”, he stated that SBS Limited “did not trade as a company when invoices indicate otherwise”.

Of the £316,192 paid to GRW, £188,132.20 was “retained” by the company and SBS Ltd.

The detailed conclusion of the report also stated that it “cannot be confirmed” if BSS Bridgend – another company subcontracted by GRW – “actually existed”.

Cllr Hussain, who is also a regional Senedd Member for South Wale West, added: “The whole thing was a shambles from start to finish. The work was not properly inspected on behalf of either the council or the energy companies and people have been left living for years in unfit homes.

“It is a scandal which has been covered up until now. The internal audit report was prepared two years ago and has been sat on by the council until a few weeks ago.

“People have the right to know that those who are responsible will be held to account. At the moment, nobody is carrying the can and the buck has not stopped anywhere.”

Councillor for Maesteg West, Cllr Ross Penhale-Thomas, revealed that he had “worked closely with a number of council colleagues” to “pen a joint letter to the Chief Constable of South Wales Police”.

The letter, which has also been signed by Cllr Alex Williams; Cllr Malcolm James; Cllr Gareth Howells; and Cllr Paul Davies, calls on the police to explain how they came to the decision not to open an investigation into the findings of the internal audit report.

The letter also calls on the police to “make public what they have shared with the council”.

A BCBC spokesperson said: “South Wales Police, Audit Wales and the Public Service Ombudsman for Wales have already confirmed that no further action is required on this matter.

“Our Governance and Audit committee will also be meeting to discuss the internal audit report next week.”

South Wales Police were approached for a comment.