AN INVESTIGATION has cleared up confusion over why Cheshire West and Chester Council regularly paid council leader Mike Jones’s company by cheque in the months before it went under.
Council chief executive Steve Robinson found no wrong-doing by Cllr Jones, whose Saltney-based plumbing and electrical firm ASC Developments (Chester) Ltd – now in liquidation – carried out grant-funded work adapting disabled people’s homes.
Instead he is targeting council payment procedures by ordering an internal review and insisting suppliers are paid by electronic means in accordance with council policy.
Mr Robinson launched an investigation after roofing contractor Ray Hinson, a creditor of ASC, raised concerns about the existence of two supplier identities for the firm on the council database – one of them was created last November and was paid by cheque on every occasion to a total of up to £36,000.
Mr Robinson, who promised to address Mr Hinson’s perception of two companies running in parallel, has liaised with the liquidator for ASC, which has £250,000 debts including £80,945 owed to HMRC.
In addition, Cllr Jones, sole director of ASC, had voluntarily provided full access to records showing the destination of monies paid by the council.
The investigation confirmed all payments had gone into the limited company’s account, regardless of payment method or company name.
Mr Robinson said: “These findings have been shared with the district auditor. On the basis of the information she currently has, she is not considering any further action.”
Enquiries by senior finance officers revealed the payment system was changed within housing services in November 2011. This resulted in a change from a Bankers’ Automated Clearing Service (BACS) to a cheque payment.
The change – introduced as an attempt to improve the department’s service to contractors – applied not just to ASC Developments (Chester) Ltd but to other companies carrying out grant work.
Yet council policy states electronic payment should be the norm and adds: “Alternative terms may not be negotiated or agreed with suppliers without the explicit approval of the Director of Resources.”
Mr Robinson, who has now ordered a review, added: “The leader of the council had no knowledge or involvement of this change and this inquiry has certainly not substantiated any wrongdoings.”
The chief executive added: “The council has always maintained that the liquidation of the leader’s company was a private matter. Having now dealt with public concerns – potentially involving this authority – I would return to that position.”
However, Cllr Jones remains in the political spotlight because at tonight’s full council meeting Labour opposition leader Justin Madders will call for an independent and open inquiry following reports about Cllr Jones’ business dealings generally.