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Wednesday, July 23, 2014
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HONITON: Report finds council finances high risk
Tuesday, 24 June 2014
Honiton Town Council has been deemed financially “high risk” by an internal auditor, due to its low reserves and “uncertainty” over additional costs for the Beehive project. The auditor’s report recommended “speedy and decisive” action in order to even out finances, and warned the council that it should develop a “robust” risk assessment strategy to avoid becoming overstretched again. The ambitious Beehive project – which has cost more than £2million in total – has already required the town council to take out a £975,000 loan. And the council has now been advised to borrow a further £100,000 – over a 25 to 30-year period – to cover the extra costs of its new community centre, which include surface drainage issues, steel strengthening to hold stage lights and curtains in place, and other changes resulting from “incomplete plans” or “poor design”. Mayor of Honiton Councillor Peter Halse said that many of the additional “variations” had not been authorised by the council, but gave assurances there would be no extra burden on taxpayers. He said: “In my experience most projects of this size have an element of additional variations but with such a small contingency it has not been possible to cover all these additional costs, many of which were not authorised by the town council. “The proposal is to borrow further funds to cover these costs but at no additional expense to the tax payer.” The auditor pointed out that the town council did not have the relevant expertise or accounting skills to take on such a large project, and East Devon District Council had been unable to provide relevant assistance. A project manager, appointed on behalf of Bailey Partnerhsip, also left before completion. However, the auditor did recognise that “considerable effort” had gone into adding a “significant” new resource to the town. The expense of the project has continued to cause controversy and led to the resignation of senior councillor Mike Allen shortly after its opening in April. But the Beehive company, which manages the centre, has reported a positive start since opening, with various community groups making use of the centre. Councillor Halse added: “We have a wonderful facility within this town – one that we have needed for a very long time. The building and facilities within are absolutely superb and it is good to see so many organisations within the community using them.”
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