Liverpool City Council finds itself in a challenging situation after a contractual oversight led to a substantial payout of nearly £1.5 million to construction company Huyton Asphalt Limited. The revelation of this mistake comes at a time when the council is grappling with financial constraints, raising concerns about its ability to manage public funds effectively.
According to a delegated authority report published by the council, errors in the administration of a contract between Liverpool Council and Huyton Asphalt Limited resulted in the significant payout. The report highlights that the council failed to account for inflation in its payment arrangement with the construction company, a critical oversight that has now become problematic.
The contract in question, established in June 2020 under the local authority’s Core Highways Framework, pertained to the maintenance of the council’s highways assets, focusing mainly on patch repairs of carriageways and footpaths. However, due to the absence of provisions for inflation, Huyton Asphalt Limited did not receive the expected uplift in payments, exacerbating the situation.
The escalating costs of the supply chain, attributed to various external factors including Brexit, the COVID-19 pandemic, and the conflict in Ukraine, further compounded the financial strain on both parties involved. Despite efforts by Huyton Asphalt to address the issue and seek rightful compensation, the errors in contract administration persisted, leading to the current impasse.
Liverpool Council acknowledges its responsibility in rectifying the situation, citing a duty to ensure best value for taxpayers’ money. However, the exact amount owed remains subject to debate, with negotiations between the council and Huyton Asphalt resulting in an agreed sum of £1.423,442. Yet, this may not be the final payout, as future payments related to inflation adjustments are anticipated.
The council finds itself in a precarious position, unable to refuse payment for fear of sparking a formal dispute with the contractors. The potential repercussions of such a dispute, including service disruptions, loom large, compelling the council to proceed with the agreed settlement.
In response to inquiries, a spokesperson for Liverpool City Council downplayed the significance of the issue, labelling it a “legacy issue” that has since been addressed. They assured the public that the additional funds owed to Huyton Asphalt would not impede future spending plans, as they had been budgeted for within the allocated funds for highways maintenance.
However, criticism from opposition figures casts a shadow over the council’s handling of the matter. A member of the Liberal Democrat party expressed dismay at what they perceived as attempts to conceal the error, highlighting the need for transparency and accountability in local governance. Their sentiments were echoed by another Liberal Democrat member, who called for consequences, including potential resignations.
This incident adds to a series of contract errors that have plagued Liverpool City Council in recent years, further eroding public confidence in its ability to manage public resources effectively. With ongoing scrutiny and calls for accountability, the council faces mounting pressure to address systemic issues and regain public trust.
In conclusion, the contractual oversight involving Liverpool Council and Huyton Asphalt Limited underscores the importance of diligent oversight and transparent governance in local authorities. As the council navigates the fallout from this costly mistake, it must prioritize accountability and strive to implement robust mechanisms to prevent similar incidents in the future, ensuring that taxpayer funds are managed responsibly and ethically.
