Mr. Paul Clegg:

The procurement issue the Deputy referred to concerns Crawley Business Consulting Limited and my colleague, John Crawley, is director of that company. The requirement for procuring a financial advisory service arose first in 2010 when the then finance director resigned. There was an embargo on recruitment in the public service and the authority put out a tender for the provision of financial services. This was done on three occasions, in May 2010, March 2013 and November 2014. In each case, Crawley Business Consulting Limited was the successful candidate.

The procurement issue relating to March 2013 which is under review in our financial statements was that when the service was put in place, it was expected that the authority would be wound up eight months later. The dissolution date at that time was November 2013 and any residual unfinished work would be carried over to the successor of the authority. Due to circumstances beyond our control, the wind-up of the authority was delayed. This was due to complications regarding significant planning matters. In 2013, we were faced with the dissolution being extended to June 2014 and the board had to continue the orderly sale of assets and liabilities. Had the wind-up taken place in November, these activities would have been carried out by the authority's successor.

During 2013, there was a greater workload on the authority. This was when the authority was starting to dispose of its assets and vigorously working to collect moneys owing to it. At the same time, the authority's staffing went from 15 down to four. There was more work to be done, the authority was in wind-up mode and the staff were leaving. Understandably, when staff knew the authority was to be wound up, they sought other jobs. Therefore, given the short-term extension of the board, the financial services contract was not put out again to tender.

When I came on board in March 2014, the deadline date for dissolution was June 2014 and we were working towards that date. The wind-up did not take place in June 2014 and the dissolution date was extended to December 2014. In August, I carried out a review of procurement compliance and put the service out to tender again. I suppose what occurred is that the authority would have made the decision in 2014 that there would be a wind-up in November so it used a restricted procedure. In hindsight, there is no doubt the better course of action would have been to go for an EU tender competition and we did that subsequently. However, we need to look at the context at the time the decision was made in 2013. The wind-up was to be in November, staff were leaving and there was additional work. Also, the authority was operating in a complex legal environment. It defended a £100 million claim, the bankers were going to call in loans, it looked as if its overdraft facility would be withdrawn and it had to negotiate a new overdraft and it had to deal with the complexity of selling assets within the docklands. This was a complex work environment. All things considered -----