Save Our Sidmouth

Auditors’ reports highly dependent on “quality and sufficiency of data used”

3 Comments

Richard Thurlow, Chair of Save Our Sidmouth, clarified this point in his speech to Councillors yesterday (Special Combined Committee Meeting of Overview & Scrutiny, and Audit & Governance, Knowle, 12/03/2015):

Councillors

The public have not been permitted to have other than a superficial view of the costings which make up the attempt to persuade that Relocation is cost neutral. Councillors and the public have to take the results as presented without understanding or knowing the processes involved, or appreciating the range of sensitivity of the output.

It is likely that the review undertaken by Grant Thornton and Gleeds is technically competent within the parameters given to them.. This is more than I can say for all the work undertaken by your Deputy CEO, which has been characterised by wrong data, erroneous calculations and embarrassing u-turns.

The problem with all such analyses is that the results are highly dependent on the quality and sufficiency of the data used and the validity of any predictions. Slight changes in both can make significant differences in the results.

This is very important to understand. In this case, the review has come up with a single result.. namely a stated cost and betterment over 20 years. I am surprised to see that there is no attempt to quantify a range of costs and benefits depending on whether the input such as the costs of energy, are higher, or lower than those assumed. This is a weakness, as it implies that the single result is mathematically and financially correct. This is not so.

In addition, Grant Thornton/Gleeds say, and I quote;-
2.4 The conclusions are based solely on the results of the Model and therefore do not consider any qualitative aspects of the options, and nor have we considered the extent to which the office relocation project will meet the Council’s service or efficiency aspirations/objectives.

This is telling you that the financial equation stacks up, but not whether the relocation project is good, or bad, or meets your objectives.

We firmly believe that the project is bad , that it ignores a number of issues and we don’t think that it meets your objectives. There are a huge number of uncertainties and unresolved problems which are being glossed over.

You should ask yourselves the following questions:-

• Are you really happy that all various options for moving were considered? Various options have been assessed against a highly biased one of using the whole of the Knowle and basically doing nothing to it except some urgent repairs, repairs which have been purposefully neglected over the past few years. The option of using and modestly improving the “new Building” at the Knowle and a refurbished building at EXMOUTH has not been considered This is a serious omission.
• Are you really happy with the disposal of an asset worth £9-10m, (the land alone is worth £7-8m), to provide assets which are acknowledged to be worth £3.25m at Honiton and £0.9m at Exmouth ? a total of £4M/ This is just throwing money away.
• Are you really happy about taking out a loan for over £9.25m for several years. When the future is so unclear? And carry over a loan of £2,1 m for 20 years?
• Have you really thought about the costs and difficulties of “Customer orientated mobile working practices, the Worksmart programme and mobile hubs”? What does this mean? The introduction of IT systems and practices are notoriously difficult to plan, cost and implement. Huge cost over runs are usual

This is probably the most important decision that EDDC will make; it is being rushed through with indecent haste, at the fag end of an administration that may well change significantly.

I would ask you to question the various assumptions inherent in the proposal to relocate, and reject it.’

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3 thoughts on “Auditors’ reports highly dependent on “quality and sufficiency of data used”

  1. Pingback: Incursion into Knowle’s Public Open Space “has never been debated by councillors” | Save Our Sidmouth

  2. Pingback: Cautions for Councillors voting on relocation | East Devon Watch

  3. Following the meeting I asked the auditor directly whether they were instructed by EDDC to consider the obvious option to refurbish the newer Knowle offices and redevelop the old hotel building. He confirmed they had not been required to consider this less costly alternative in their appraisal.

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