Dudley Council 'could have lost £400,000 of taxpayer’s money over over Cannes conference'

The 97-page document bundle, titled ‘Review of arrangements for DMBC MIPIM delegation 2019-23′, suggests the council had calculated an initial budget of £85,000 for senior officers – including the chief executive, Kevin O’Keefe, and the leader of Dudley council Patrick Harley – to attend MIPIM.

However, an internal audit report explicitly states the  £85,000 figure was incorrect. Dudley Council instead spent an unfunded overspend of £200,000 – well beyond the original £85,000 target. It may reach as much as £400,000 and could have been “avoided through more diligent and robust governance projects”, the report added.

The files record that Kevin O’Keefe, the chief executive of Dudley Council, “appeared to be the main decision maker throughout the process”. Mr O’Keefe believed attendance at MIPIM would “showcase Dudley and the opportunities available”. He considered a “bigger presence was required”.

Both Mr O’Keefe and Councillor Harley agreed the council needed its own stand and its own event to be held at the Radisson Blu hotel.

Dudley Council had signed two two-year contracts with Associate Events in 2019 for the council’s attendance to MIPIM in 2020 and 2021. As both events were cancelled due to the coronavirus pandemic, the council agreed to roll-over the contracts to 2022 and 2023.

Nine members attended the event in 2022 – including the chief executive and leader of the council.

In July 2019, Associate Events provided a quote for their services. Mr O’Keefe emailed in August 2019 that he was “broadly happy with the quotes from Associate Events – I recommend that they are accepted”.

Highlights of costs incurred include £4,260 spent on an event at the Raddison Blu, and approved by Mr O’Keefe. The council was overcharged by Associate Events £965.

The council was charged £3,500 for “ongoing PR” by Associate Events, and a £24,000 credit note by the company “could not be demonstrated to be refunded”.

In the document, Dudley Council said: “Very limited due diligence was completed before appointing Associate Events. A credit reference was carried out and a concern was raised with Associate Events, but no further action was taken.”

It also concluded the contracts did not include all of the council’s standard terms and conditions were considered to favour Associate Events.

Email correspondence between Helen Martin, the director of regeneration and enterprise, and Mr O’Keefe suggest there was no surplus budget to finance attendance. An email from Mr O’Keefe in September 2019 confirmed he would use the chief executive’s budget to bear the costs of MIPIM, saying: “I’ll hold the ring temporarily and then we can discuss how it is ultimately to be coded-off.”

Ms Martin had also raised concerns after suggesting there were insufficient regeneration opportunities to promote, adding: “What is it we will be offering at MIPIM?”

Between the summer of 2019 and attendance at MIPIM in March 2022 no request for additional funding was made to Dudley Council. Cabinet reports dated in September 2020, October 2020, and February 2021 all indicated regeneration budgets would be overspent – with MIPIM expenditure highlighted as one of the reasons.

The report comes after numerous Freedom of Information requests were sent by councillors related to the costs by MIPIM. The council admitted it interpreted the costs related to food and alcohol spent at MIPIM, rather than the accommodation and travel.

Dudley Council consulted on the merits to attend MIPIM as a “catalyst” for regeneration projects to be delivered in the borough. The issue has also directed intense scrutiny towards the role of senior officers at the council.

Quentin Baker, an internal auditor, argued the responsibility for the overspend lies with a number of officers whose actions resulted in a “collective lack of competence”.

He said no senior officer could be solely to blame, but added there was a “prevailing culture [falling] short of the robust governance and compliance” needed in a local authority.

He also slammed the conduct of Associate Events. “In the most charitable light [they] may be described as unhelpful due to the pressures they must have felt facing the commercial abyss of the lockdown. The more cynical might regard their actions as exploiting the governance weaknesses in [Dudley council] to bolster their finances at a time of commercial distress.”

Associate Events has declined to comment.

Councillor Patrick Harley, leader of Dudley Council, said the local authority was holding “very fruitful discussions” with businesses and developers “only possible thanks to the connections we established at the conference in France”.

He said: “This potential shows the decision to go to MIPIM was indeed the right one, however, clearly, the report we commissioned ourselves through independent auditors highlights some areas where there are lessons to be learnt in relation to governance processes around the conference attendance which was postponed twice due to the Covid-19 pandemic.”

Balvinder Heran, deputy chief executive at Dudley Council, said: “Clearly, the independent audit we commissioned highlights areas where there are lessons to be learnt in relation to internal governance processes and work is underway to address all internal governance arrangements.”

Colin Copus, emeritus professor of local politics at De Montfort University, said the council needs to go to conferences to showcase the borough, but warned the council must “comply as robustly as they should with regulations that exist”.

He added: “Regulations exist to stop the sort of thing that has happened, unfortunately, at Dudley Council. They stop officers from ‘hurrying up’ the process. I can see how people wan to circumvent them and work around them for ill reasons.

“Importantly, for those financial officers that work in local government, they have to have the confidence and assurity to reinforce rules and regulations to other officers, including the chief executive.”