Council monitoring contractor finances

By Elgan Hearn, Local Democracy Reporter

Following the collapse of two companies that had won huge Powys County Council contracts last year, the regional authority has vowed to keep a closer eye on the finances of its partners.

With the coronavirus pandemic creating serious financial issues across the industry, and with PCC still sorting out the mess left by the demise of Dawnus and Jistcourt, the regional authority said it was determined to not let history repeat itself.

At the latest Finance Panel meeting, Cllr John Morris, who is also the chairman of the Audit Committee, said: “Obviously we have a rather large capital programme and it’s about the viability of some contractors going forward and whether we are able to monitor that?

“We all know about Dawnus and Jistcourt and we need to keep this on the agenda. Some of these contractors may be at risk.”

PCC Head of Finance, Jane Thomas, said: “We are monitoring the situation on a daily basis.

“Some contractors have suspended work, while others are still working or coming back online.

“It depends very much on whether they can operate safely due to the social distancing requirements.”

Ms Thomas added that one of the measures being taken by PCC during the pandemic was to set up a “Supplier Relief” scheme. This would support firms who provide services to the council to remain viable.

But she warned that this would be reliant on “open book accounting”.

In March 2019, Swansea-based construction firm Dawnus collapsed affecting three school building projects in Powys. They left Welshpool Church in Wales Primary School (pictured) half built.

They had been expected to build the new Ysgol Bro Hyddgen all through (4-18) school in Machynlleth and Ysgol Gymraeg y Trallwng new Welsh medium school.

In January, Shropshire based builders Pave Aways were contracted to finish off building the Church in Wales School in Welshpool.

Before the pandemic struck, work had re-started on the other two school building projects, which still need to go through the planning process.

Jistcourt were supposed to build 26 flats for PCC at the former bowling green just off Newtown town centre. They went into administration at the end of June 2019.

In September 2019, PCC’s Audit Committee held a special meeting to probe the downfall of both Dawnus and Jistcourt.

They concluded that the Welsh Government should have shared information with local authorities about Dawnus’ precarious financial situation.

Before being given council contracts members also wanted to see more rigorous checking of companies’ financial health, looking in greater depth including director turnover, before being given council contracts.