Audit Commission Responds To Questions On Garden & Decor Purchase

The Town Hall

The Audit Commission has criticised the Council’s governance procedures over a property purchase in response to islanders’ complaints.

Three residents wrote to watchdog, Patrick Jarvis about the Chief Executive’s decision to buy Garden & Decor for £100,000.

At the time, the building was owned by the husband of the Council Chair although she left meetings when the matter was being discussed.

The Auditor says the building was bought with a government grant intended to cover risk management and administered here as part of Fire and Safety funding in Emergency Planning. The intention was to establish a safety shop at the premises.

One complainant argues that there has never been a safety shop there since the purchase.

However, Mr Jarvis said the use of the grant to buy a building, so the Council wouldn’t have to remodel the fire station, was unconventional but within the rules.

But Council procedures have been criticised by the auditor who can’t find any business case for the purchase.

Four councillors were asked by Philip Hygate to sign off the acquisition, as it was felt too urgent to wait for a Council meeting.

However, one local questioned this urgency. He asked the Auditor where the building was advertised as, he claims, it’s unlikely that an unadvertised property would be snapped up.

Mr Jarvis’ research has revealed that Garden and Decor had been on the market until 2007 at £110,000. An offer of £95,000 was made in 2009 and declined and then the Council offered  £5,000 more.

But the Auditor says the Council failed in its governance in not getting a valuation.

One has since been made and Council accounts reveal the building was worth £115,000 last year, £15,000 more than the purchase price. However, £30,000 was spent on refurbishment last summer and the Council’s newly-posted accounts say this “did not add value pound-for-pound”’ to the value of the premises.

There’s been a  £28,000 “downward valuation” on the building.

One objector says he is still unsatisfied with the auditor’s response and has asked about starting court action and who would meet the bill.

He has also written to ask who is directly accountable for governance failings rather than it being described as a Council failing which technically involves all staff and members.

The Auditor is also dealing with complaints over the Chief Officers’ pay rises. Mr Jarvis hasn’t published his findings yet on the transactions that fell within the last financial year.