Victory Energy internal audit report reveals Portsmouth City Council did not follow 'due process' in key areas

Portsmouth City Council launched Victory Energy with former SSE executive Dan O’Hara after he first spoke about an energy project to former Conservative council leader Donna Jones in early 2017.

By March, Mr O’Hara and others pitched the joint venture firm to senior council officers that would eventually lead to a £3.5m loss for taxpayers.

Details have emerged in an internal auditor’s report obtained by The News that found three ‘high risk’ areas where ‘due process and procedure were not followed’.

This includes failing to follow procurement rules in spending nearly £400,000 after the cabinet had approved the final business case in October 2017.

Auditors classed as ‘high risk’ the failure to verify Mr O’Hara and another consultant’s CVs.

Assurances were given when Baringa LLP reported to the council in October 2017 that they brought an ‘overall understanding of the commercial and operational fundamentals of the energy supply market’.

But the report said there was no evidence that their £600-£750 daily rates were cost effective or value for money. Cllr Jones previously said it was hugely reduced.

The Lib Dem administration led by Cllr Gerald Vernon-Jackson took over the council in May 2018 following the election.

He then ordered a review of the firm - before ultimately scrapping it - but the council spent £113,000 on auditors PwC, without shopping around for a better deal.

Cllr Vernon-Jackson said he wanted an ‘internationally-known’ accountancy firm to carry out the review.

‘It was a really important decision for us to take,' he said.

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The report added: ‘During the review, which included audit interviews with senior officers and councillors, along with a significant review of records and documentation, no evidence of impropriety was found.’

David Williams, council chief executive, said: ‘The council complied with national procurement regulations at all times and we are confident decisions were made appropriately.

‘Some of the council’s internal procedures were not fully followed, but at no point did this cause any legal or financial risk. We're sorry this happened and governance measures have been reviewed to prevent it happening again.’

A message from the Editor, Mark Waldron

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