Waverley Borough Council (WBC) leaders have called for lessons to be learnt following a report that revealed senior directors at Guildford Borough Council (GBC) overlooked critical warning signs, resulting in a multi-million-pound overspend and allegations of fraud.
The Heminsley report, published on January 22, examined historic failings in Guildford's housing service, which resulted in an estimated £13.5 million overspend and unnecessary work being carried out.
Guildford and Waverley borough councils initiated a back-office merger in 2021, sharing services, initiatives and officers to improve efficiency.
At a recent WBC full council meeting, councillors and officers discussed the report's findings.
Pedro Wrobel, joint chief executive of both borough councils, urged the authority to learn from its neighbour’s mistakes.
“We are taking a number of steps, and I have seen WBC procedures, culture and actions improve as a result of the lessons taken wisely from Guildford,” he said.
“This is about Guildford, so probably less relevant for this group.”
Cllr David Beaman said if there had been more scrutiny from the start of the collaboration, the situation could have been avoided. He said: “There seems to have been this culture, if we’d had more due diligence before we’d gone into collaboration perhaps this could have been revealed.”
Meanwhile, Cllr David Munro disclosed that the report had cost £109,000 to conduct, with the costs equally shared between the two councils.
The Heminsley report found that poor departmental management and failure to act on warning signs allowed GBC officers to overspend on contractors, particularly to address housing compliance issues, without proper oversight or clarity on budget allocation.
It highlighted 13 missed ‘red flags’, including two whistleblower reports in 2022 and 2023, which raised concerns about fraud and overspending with a housing contractor. A draft audit from January 2023 also noted contracts paid at 150 percent of their original value, with auditors calling for better tracking and monitoring of procurement.
Despite an internal audit in February 2023 flagging potential risks of fraud and inefficiency, senior executives failed to address a £6.6 million overspend on an electrical safety contract (initially valued at £2.4 million) that was carried over into a new agreement in June 2023.
The report states that by February 2023, senior directors— including the joint chief executive and the directors responsible for housing, governance, and finance— should have noticed the red flags and intervened. However, the directors cited their heavy workloads and the complexities of managing both Guildford and Waverley borough councils as mitigating factors.
Joint strategic directors told the investigators there was a “collective failure across senior management that had roots” in the organisation’s first attempts at restructuring in 2019. Another witness had said they were not surprised that something like the issues leading to the police investigation had taken place in light of Guildford’s governance issues and “historic woes”.
Although Mr Wrobel said the report was “the last piece of the puzzle”, the police investigation is still ongoing.
He expressed confidence that the three-year improvement plan has addressed all the governance issues highlighted in the report.