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Police appraised of council's probe into £3m loss and 'charges could follow'

POLICE have been informed of the progress of a council investigation into how it came to lose over £3m of taxpayers' cash on a roads maintenance contract – and prosecutions could follow. Dumfries and Galloway Council created a trading arm called DG First which became a sub-contractor for the firm Amey between 2002 and 2013, handling trunk-road maintenance across the south-west. Official papers show DG First initially generated an operating surplus. But a later £29m deal with Scotland Transerv – covering 2013 to 2018 – instead returned a deficit of £3.25m. The council mounted an investigation into DG First and found there had been a determination to brand it as a "different entity" to the council. This created an "organisation within organisation" in which DG First – since scrapped – did not always seek professional advice and signed the deal while not entirely grasping its complexities. Now an official report notes: "Police Scotland have also been contacted to appraise them of the investigation and its findings to date. It has been confirmed to Police Scotland that they will receive the council's full support including progressing matters to potential prosecution should illegal activity be identified." The report, due to be put before the full council on Thursday, notes too that specialists have been brought in to unpick the highly complex deal which DG First signed. "Further information from Transerv is expected and more detailed analysis of this financial information would be required to fully understand the impact of the fixed price elements of the contract, any impact of low value rates and comparison of rates to the contract. "This analysis should also identify where any rates agreed by the Council were below that of normal market conditions. Consideration of sub-contractor and material costs will be a focus. "Specialist forensic financial expertise has been secured to further interrogate the complex fiscal analysis now required to finalise any further necessary action." The council has noted poor oversight and management of the contract, Increased reliance on sub-contractors and "limited written contracts" which left the "majority of risk of performance failures" lay with the council. In a statement issued last week, the council was quick to say changes had been made. Leader Elaine Murray insisted the council was a "transparent and accountable organisation". Changes meant it would no longer be entering into arrangements such as the roads deal. Rob Davidson, depute leader, said: "Plainly speaking, the contract should not have cost us money" and added that "swift action" to investigate had been taken.

<< back Published: 23 Jun 2020, 18:30

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