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Decision to award Asons £300k grant was 'legal and appropriate', independent KPMG audit

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Nat Lofthouse
Nat Lofthouse

The decision to award a controversial £300,000 council grant to a Bolton law firm was legal and ‘appropriate’, an independent audit has found.

But Bolton Council has been criticised for having 'no clear rationale documented' for using its emergency powers procedure to award the money to Asons Solicitors.

Auditors KPMG were asked to investigate the local authority’s procedure after The Bolton News revealed last year that the grant had been approved at a private meeting to help the law firm refurbish its Churchgate offices.

The council was accused of 'running a dictatorship' by opposition councillors.

But a newly-published report from KPMG said the issues surrounding the Asons grant were 'isolated', after the auditors also examined a number of other grant decisions.

The £300,000 was recovered in full after Asons ceased trading in March and was taken over by Coops Law.

That firm has since been shut down by the Solicitors Regulation Authority.

While the auditors criticised a lack of a 'clear audit trail' on the Asons decision and said they were 'not satisfied' with the emergency powers procedure, they praised the way the council has since 'proactively rectified weaknesses' and pursued the firm to recover the full amount of the grant.

The report says: "There is no clear rationale documented as to why these decisions should be taken under the emergency powers procedure.

“For example, why there is such urgency to the decision that means it has to go through the emergency powers procedure.

"There is no clear audit trail around the rationale as to whether the decisions made under the emergency power procedure are 'key decisions' or 'other executive decisions'. To note the emergency powers process differs depending on the type of decision that it is.

"There is no evidence that the relevant opposition members have been informed of the decision, which forms part of the procedure under the council's constitution.

"There is no clear audit trail as to why standing orders have been waived in the course of the decision that has been made.

"Although we have identified several issues in relation to the process, we have gained assurance over the legality and appropriateness of the overall decisions made."

It adds: "Given the response of the council and the fact that there has been no financial loss to the public — there is no reason for us to exercise any of our wider powers."

The council has already made changes to its constitution following the outcry over the Asons grant.

In July, the cabinet approved proposals to change how the council uses its emergency powers — which can now only be used with the agreement of either the chief executive or borough solicitor.

Council leader Cliff Morris maintains that the council had not done anything wrong in awarding the grant.

He said the subsequent closure of the law firm could not have been anticipated.

He also said he still believed that opposition leader Cllr David Greenhalgh was copied into correspondence relating to Asons for months before the grant was issued, though the Tory leader is adamant that he was unaware of the grant until a meeting in November.

Cllr Morris said: "The auditors have said it was legal and appropriate.

“I have said all along that I did not feel we had done anything wrong and this is not something I have had sleepless nights over.

"As far as I was concerned, I was always certain that David Greenhalgh had the letter — but I can't prove that.

"The good thing is that this has now been signed off and KPMG have said the decision was legal and appropriate.

"At the time, the grant was about supporting jobs in the town centre. We could not have foreseen what happened to the company after that."

The report concludes: "Overall, we are not satisfied the authority has made proper arrangements to make informed decisions, when using emergency power procedure within the authority's constitution."

It adds: "However, we recognise the authority has been proactive in making changes to the process including updating the constitution and completing training sessions with officers and other staff to raise awareness of the process required throughout the council."

The report will be discussed at a meeting of the council's audit committee next Tuesday.


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