‘ABYSMAL’ mismanagement of a demolition contract ended up costing Bolton Council £261,000 more than expected after they were not informed of sky-rocketing costs on a prestige project.

Councillors heard a contract for the demolition of the former Late Club and Club Ice on Bank Street, for the redevelopment of Church Wharf, was originally set at £395,000.

After contractors began work in May 2019, unforeseen additional work was needed to prop the banks of the River Croal and walls and the budget rose to £514,000 by February 2020.

But when the final bill arrived in June 2020, it was for £896,000.

Members of the council’s place scrutiny committee heard a project manager from the council’s private sector partners Robertson oversaw the work on behalf of the authority. They heard between February and June, neither the project manager nor the contractor informed the council of the rocketing costs.

Additional invoices were only verbally disputed and challenges were not placed in writing. So when the final bill eventually came to light the council was legally bound to pay the full amount.

The demolition contractor was eventually paid £775,000 by the council after they began legal proceedings. The figure is £380,000 more than the original budget and £261,000 more than the uplifted agreed figure.

Cllr Akhtar Zaman said the situation was a ‘complete and utter mess’, which had cost the council tax payers of Bolton a massive amount of money. He was concerned ‘collusion or even criminality’ had occurred.

Gerry Brough, the council’s place director, told the meeting: “There was inadequate contract management. I authorised a budget revision to just over £500,000 on the understanding this would be the final claim.

“I then didn’t receive any indication of any more increases until the final account. I’ve got to be honest, that is not a lesson we should have to learn. We should be able to manage contracts better.

“The primary responsibility lies with the project manager and we’ve now brought in additional controls to ensure the project manager does not have as much leeway.”

Mr Brough said after the final bill was lodged the council was given legal advice it would have to pay as they had not properly challenged the additional invoices in the time period required.

Cllr Zaman said: “We as custodians of public funds have responsibility to protect the public interest. We paid £380,000 more than was agreed at the outset. The process from what I have heard does not give any assurance whatsoever that this was a legitimate payment.”

Rob Holt, a Robertson director, said they were not aware of any problem until the same time as the council.

He said: “We now feel we have a very, very good process in place. We need this from a reputational perspective and a financial perspective as we can’t afford to let this happen again.”

He said investigations had not found any indication of collusion but there had been ‘poor contract administration’.

Cllr Julie Pattison said: “Hearing ‘lessons have been learned’ is not acceptable, that seems to be a standard response for sloppy mistakes.

“Why was robust management not in place? A lot has been put on the project manager but before that things should have been checked. It’s a huge and costly mistake paid for by the public purse.”

The demolition contractor was not named in the meeting but a public notice published by the council in April 2019 states work would ‘be carried out by specialists J Freeley Ltd’.

Cllr Martyn Cox, deputy council leader, said: “This was a poorly put together and administered contract. There is no evidence of criminality and if there was I would be recommending prosecution.

“In short the contract management of this project was abysmal. The council is seeking compensation from Robertson and we will report back on what that figure is.

“I am satisfied even though the project went significantly over budget we have had the value of the work so all the extra money was not wasted.”