Damning report criticises council failings over relationship with waste contractor

Elgan Hearn, local democracy reporter

A damning report into the relationship between Blaenau Gwent County Borough Council and a waste services contractor has highlighted a laundry list of failings in the way the arrangement was run.

The long-awaited report by Audit Wales probed the relationship between the council and Silent Valley Waste Services Limited (Silent Valley), is a company owned and controlled by the authority.

The report is the fruit of a four-year investigation and delves back as far as the formation of the company more than 30 years ago.

The auditor general’s report concludes that the council failed to establish robust and effective arrangements in respect of its relationship with Silent Valley between 2003 and 2017.

Wales auditor general, Adrian Crompton said:  “The saga covered by my report illustrates the serious consequences and damage to public trust that arise when local authorities fail to establish and apply proper governance arrangements in respect of their relationships with other organisations.

“The behaviours and failures that persisted over many years raise a serious question about the council’s organisational culture during the period to which this report relate.”

The “significant concerns” listed in the report are failures to:

• Correctly approve pay and pension arrangements in respect of council officers appointed to the Silent Valley board;
• Comply with procurement regulations in respect of services provided by Silent Valley;
• Ensure that council appointments to the Silent Valley board complied with the council’s constitution;
• Establish proper governance and oversight arrangements in respect of Silent Valley from 2012 onwards to ensure accountability for the use of public resources;
• Establish proper arrangements to manage potential conflicts of interest in respect of council officers appointed to Silent Valley’s board, resulting in those officers being exposed to allegations that some of their actions were motivated by self-interest;
• Ensure that decisions to make termination payments to Silent Valley directors were in accordance with the law;
• Put in place competitive and robust arrangements for the recruitment of Silent Valley’s new general manager, (the company’s most senior officer) in 2016.

The report also explains why the investigation was halted for 14 months to allow Gwent Police to probe financial discrepancies found by auditors. In March 2020 the police investigation finished with no further action being taken.

Concerns over the council’s relationship with Silent Valley Waste Services also held up the auditing of the financial statements for 2016/17 and 2017/18.

In November 2020, the auditor general had said pension payments to two senior council officers who were also directors of Silent Valley “appear to be contrary to law”, as separate pension accounts were not opened.

Blaenau Gwent council admitted there were “procedural errors” in the way payments were made but disputed that they were unlawful.

Mr Crompton does say that things have now started to change for the better.

Firm action

Mr Crompton said: “Under the leadership of its current managing director (Michelle Morris) the council has taken firm action to address the deficiencies in its governance and oversight arrangements in respect of Silent Valley.

“Other councils would do well to consider the issues raised in this report and ensure that their governance and oversight arrangements in respect of companies they own, and control are fit for purpose.”

There is a legal expectation that the council will discuss the report and decide what action to take or not, by February 27.

A council spokesman confirmed that the report would be discussed as a “public item” at a special council meeting of the council on 7 February.