Dorset Council financial mismanagement report released

Undeclared gifts and hospitality and a disregard for financial rules led to Dorset Council sacking 11 officers – a report just made public reveals.

All of the interim staff had been brought in to sort out health and safety issues across council buildings which had not been fully completed over a period of several years.

An internal audit report suggests that a lack of management and political control over those projects saw budgeted work mushroom, much of it without the checks and balances required when agreeing contracts or signing them off for payment.

A budget difference from £4 million to £13 million is mentioned in the report although the overall cost of health and safety work in council building amounted, over several years, to a total of around £28 million.

The report says a handful of firms were favoured for work with some fees not being properly authorised, prices inflated and “substantial unnecessary and unjustified costs.”

One example given is a charge of £300 for work done worth only £20.

A report, released today (July 28 @ 2pm) says there is “evidence of illegal activity or fraud and/or failure to comply with Council rules and procedures” and “potential obfuscation and dishonesty by council officers.”

All of the buildings were said to have been handed over to Dorset Council from previous councils when the new authority was established in April 2019 with little, or no checks by previous authorities that statutory obligations for health and safety were in place. Those ommissions are believed to have gone un-noticed by Dorset Council until at last 2022.

The council’s portfolio holder for finance, Chickerell councillor Simon Clifford, said today that he was “dismayed that millions of pounds has been spent with no guarantee there has been value for money, something which will warrant further investigation.”

He called for the investigation just a short time after the Lib Dems came into control at County Hall after spotting what appeared to be unexplained transactions, including a substatial transfer from council reserve funds.

The audit investigation which followed found “governance failures across key operational areas within the Building Health and Safety Compliance Team and its associated programmes. The recruitment of interim staff, the creation and use of budget codes, procurement practices, and payment approvals all demonstrated significant non-compliance with council policies, poor record-keeping, and a lack of effective oversight.”

It says financial controls and procedures for awarding contracts in the department were frequently bypassed.

“The cumulative impact of these failures resulted in substantial unmonitored expenditure, reduced assurance around value for money, and increased exposure to financial and reputational risk,” said the report.

Dorset Council, now Lib Dem controlled, says it is being open and transparent about what happened – the incidents taking place when the council was under the control of the Conservatives.

Part of the report speaks about undeclared gifts and hospitality and over-reliance on an internal memo about the need for the works to be completed speedily.

It has already been reported that the current administration had tightened up procedures to avoid a repeat of a lack of control in any council department.

The incidents investigated centre around health and safety compliance work in council buildings carried out between December 2022 and October 2024.

The probe into that period has been conducted by the South West Audit Partnership (SWAP), an independent auditor, and identified “significant weaknesses in governance, financial controls, procurement practices, and oversight” in the authority at that time.

The deep dive report was commissioned in September 2024 after concerns were raised internally by officers and Cabinet members about non-compliance with financial controls and escalating overspends on health and safety works. At the same time, the decision was taken to terminate the contracts of 11 interim officers in the Assets and Property team with immediate effect.

A separate audit into contract and expenditure compliance identified gaps between the council’s decision making and its financial system, “raising concerns about authorisation limits, procurement processes, and the transparency of high-value spending.”

Cllr Nick Ireland, Leader of Dorset Council, said: “I take the findings of the two external reports extremely seriously. Although the original intent of the work carried out from 2022 was to improve safety and address prior shortcomings, the way it was delivered at that time did not meet the standards our residents rightly expect. This matter predates the current administration, and I fully support the commitment to transparency and accountability.

“A robust action plan has since been developed, and a dedicated team is in place to drive the necessary improvements. It is essential that public funds are managed with the highest standards of integrity.

“I welcome the scrutiny of the Audit and Governance Committee and fully endorse the organisation’s commitment to learning from past mistakes to ensure such failures are never repeated.”

Meetings about the audit findings have already been held behind closed doors, including one earlier this month, with a public meeting of the Audit and Governance committee likely to be held in October 2025 to look at the findings.

Said Interim Chief Executive, Sam Crowe: “We fully recognise how concerning and disappointing these findings will be for our residents. The failures identified in these reports fell far short of the standards people should be able to expect from Dorset Council. I also acknowledge that councillors were not involved in the way they should have been at the time. This limited their ability to intervene or hold the organisation to account.

“As the council’s leadership team, we take full responsibility for addressing what went wrong and ensuring it cannot happen again. We will work hard to regain trust through transparency, learning, and by sharing progress on improvements with the public.”

The summary report can be found on the Dorset Council website at https://www.dorsetcouncil.gov.uk/w/health-and-safety-compliance-investigation-2025