£1.8m probe into capital’s statutory notices after fears of fraud

MORE than 500 building contracts are to be scrutinised as part of a £1.8 million investigation into a scandal that has rocked one of Scotland’s largest local authorities.

Edinburgh city council has revealed every complaint will be looked into, case by case, in an inquiry that will take two years to complete.

It follows an investigation by Deloitte into 33 sample cases, which covered a range of works, building types and contractors.

Although the findings have remained confidential, they have been concerning enough for the council to launch what it promises will be a “thorough and painstaking investigation”.

A total of 18 staff are believed to have been suspended in connection with the investigation, with others subject to disciplinary action, and the council has stopped awarding work to contractors where concerns have been raised.

Mark Turley, director of services for communities, said: “This is a thorough and painstaking investigation. We will review the specific circumstances of all complaints and try to remedy these. The approach we are taking aims to be open and inclusive, which is essential for both resolving the issues raised and moving the service forward in a way that regains the public’s confidence.”

The council has not estimated how much it may have to pay out in compensation if Edinburgh homeowners are found to have been overcharged or been made to pay for unnecessary work. But it admits the value of the complaints being scrutinised add up to “many millions of pounds”. That is bad news for a local authority already facing a £3m projected net deficit for property conservation.

It has lifted a moratorium on non-urgent work which had been in place since April, which will be a boost to homeowners waiting on repairs, and the building industry in general, across Scotland.

This decision was welcomed by Ewan Aitken, a former leader of the council, who warned questions remained about “alleged systemic and potentially corrupt practices”.

“The interim report on statutory notices released today will help those who need a statutory notice to make sure that repairs which are affecting their quality of life are completed,” he said.

“However, there remain many serious questions about the alleged systemic and potentially corrupt practices within the statutory notice system, to which the citizens of Edinburgh have a right to have answers. I and my colleagues will continue to demand those answers.”

The Deloitte investigation is expected to cost £1.5m, with the team of six surveyors, who will look into the 513 complaints, costing a further £300,000.

The complaints include 143 about the size of the invoice or increases in costs, 95 about workmanship, 28 relating to duplication, additional or unnecessary work and 76 about poor communication from staff.A further 62 were about the management of the project and 69 referred to general concerns raised because the inquiry was being carried out.

Architect Lorn Macneal, who owned a flat in Nelson Street, Edinburgh, has told how his block was served a statutory notice for £300,000, but he managed to trim the cost to £40,000 by using his professional knowledge.

Phil Wheeler, convener of the council’s finance and resources committee, said: “Carrying out further investigations is a welcome proposal and I hope it underlines to the public how seriously the council is taking this issue. However, we also need to look again at introducing arrangements to ensure essential work is carried out appropriately.”

A police investigation into the alleged corruption is ongoing.