Agenda item

Public Issues

To receive any public questions, statements or petitions submitted in accordance with the Constitution. Further information on the requirements for submitting these is available to view at the following link:-

The deadline for the submission of public questions is 3 clear working days before the meeting.

The deadline for the submission of a statement is midday the working day before the meeting.

The deadline for the submission of a petition is 10 working days before the meeting.



The Committee was advised of the receipt of six public questions and two public statements.



Public Questions from Mr Alex McKinstry


Question 1.


Studying the report for Item 12 this evening - the officer's report - we find this, among the recommendations following the failure of the Bayside Restaurant: "Detailed financial analysis should be undertaken of contractors involved in pop-up [restaurant] activities." That appears to have something in common with Paragraph 19, second bullet-point, which cites concerns around a particular contract and the related financial forecasts and financial performance. What exactly is the report author getting at here? Did one particular contractor get into difficulty and, if so, to what extent did that affect the Bayside's performance? Can we have as much detail about this as possible, given that the auditor's report is being withheld from the public and given that there is no allusion to this misfortune, as far as I can make out, in the executive summary?




The recommendation that reads "Detailed financial analysis should be undertaken of contractors involved in pop-up [restaurant] activities." Is entirely separate and not linked to paragraph 19.


Paragraph 19 is in no way implying the financial health or standing of any particular contractor was a contributing factor to Bayside financial performance.


The Internal Audit investigation report covers all pop-up activities not just the Bayside restaurant pop up. The quoted recommendation suggests that a detailed financial analysis should be undertaken to fully understand the total historic aggregate expenditure with all the various contractors involved in pop-up activities. Understanding aggregate expenditure may then reveal opportunities for aggregating commissioning and tendering activities into larger packages, where possible and appropriate to do so. This may result in better value for money, provide economies of scale and allow greater competition. More efficient and cost-effective commissioning and tendering may also result. 


Paragraph19 refers to an area of concern the Chief Operations Officer required the HR independent Code of Conduct, disciplinary investigation to consider – were the Internal Audit investigation’s identified weaknesses in financial modelling and financial management of the Bayside venture a disciplinary matter requiring sanction?


For the avoidance of any doubt, and partially using Mr McKinstry’s words, ‘no contractor got into financial difficulty’ during the Bayside venture.


Question 2.


The executive summary meanwhile states, at 4.2, that procurement waivers for Bayside were signed by an officer with "a close personal relationship with the directors of the operating company", which the officer had declared. When was that declaration made, how many waivers did the officer go on to sign, and to what financial value? Can we also be told whether this conflict of interests was known about by any of the waivers' counter signatories - I take it the investigators have looked into this - and if not, how did this collision of interests eventually come to light?




The officer declaration was dated 4 Feb 2022. 


The officer signed and approved two waivers linked to the company where ‘a close personal relationship’ was declared, one was for £60,000 and one was £125,000.  The actual final spend on the £60,000 waiver was £27,900 and the actual final spend against the £125,000 waiver was £97,108. 


The officer also signed and approved five other waivers, totalling £289,380 for various supplies and services for summer hospitality at Bournemouth Beach which were not with a provider where a declaration of interest was made. Some of these supplies and services purchased through these waivers were used in the Bayside venture and 2022 Bournemouth air festival.  


The conflict of interest was not known about by the waiver counter-signatories at the time of signing.


The declaration of interest form was obtained by Internal Audit as part of their investigation. Internal audit concluded that there was no evidence of fraudulent behaviour having taken place in relation to this declaration of interest or perceived conflict of interest.


The Council recognises that where a conflict of interest exists, or where there may be perception of a conflict, mitigation measures are required to manage that conflict.  Such mitigation measures were not in place in this instance.  The Director of Commercial Operations has subsequently required all staff, in the Directorate, to review and update their declarations of interest and any mitigations required have been agreed by line managers and reviewed by the Director.


Question 3.


Finally, at public questions on 21 February (full Council), the then portfolio-holder for tourism and culture, stated that one advantage of using "a mixed management model" for seasonal offers such as Bayside is that it "helps share the risk". Turning, then, to 5.1 of the executive summary, and the £173,500 net loss arising from the Bayside venture: what percentage of that loss has been borne by the Council, and what percentage shouldered by partners?




The previous responses to questions raised at full Council explained that the ‘mixed management model’ and ‘helps share risks’ remarks, referred to the overall pop-up programme delivered across the seafront, where a variety of operational management models were used to deliver the individual pop-ups.


As a standalone pop-up, for Bayside, 100% of the loss was borne by the Council.  


As a standalone pop-up, for Bayside, the Executive summary, Key finding at 4.2 reads: Contract design was weighted heavily in favour of the third-party operators with payment of a fixed fee plus profit share and no liability for losses. 


Recommendation at bullet point 10, paragraph 14 of the main report refers as follows - Contractual arrangements should ensure an appropriate balance of risk and reward.


For the 2023 summer season, taking the recommendations from the investigation and wider lessons learnt into account, contractual arrangements similar to those used for the Bayside venture have not been used as the Council recognises risks and rewards were not appropriately balanced.


Public Questions from Mr Ian Redman


Question 1.


In April, Bayside Restaurant announced, “Bookings now being taken for August”, indicating contracts had been agreed with suppliers.

Catering and staffing waivers were signed by the service director on the 11th July, Head of Strategic Procurement on the 14th July and approved by the Head of Audit on 20th July, at least four months late.


Financial regulations say “Waivers and PDR’s will not be granted retrospectively, and any such requests will be treated seriously and constitute a breach and may result in disciplinary action.”


Can the Chair confirm when and to who, the Head of Internal Audit reported the breach of the financial regulations?




There was no breach of Financial Regulations.  Waivers were not submitted late or retrospectively. The waivers were submitted in advance of the purchase orders being raised, and therefore in advance of the formal contractual commitment.     


For one supplier a waiver was approved in March 2022 and the resulting purchase order was raised in April 2022 to work on the pre-event and in-event management and planning. The invoice for this work was paid by the Council on 1 August 2022.


The pre-event planning work included taking advance bookings. Advance bookings were knowingly taken, at risk, before the decision was made by the responsible officer to go ahead with the Bayside venture which occurred on or around 22 June 2022.


The catering and staffing waivers referred to in the question, and signed in July, were rightly raised and approved after the decision was made by the responsible officer to proceed with the venture.


Question 2.


3.5 of the Bayside Executive Summary says; Officers and third party contractors raised concerns about the Bayside. Which third party contractor raised concerns, when and to who?




This information is restricted information as described in paragraph 13 of the covering report.   The ‘when’ part of the question covers several comments made in April, May and June, before the decision was made to eventually proceed which was made on or just after 22 June 2022.


Question 3.


As the full Bayside report has been withheld, can the Chair confirm how many pages it is in length and whether the Committee have been provided with a completely unredacted copy.




The full report is 22 pages, a further 22 pages of appendices exist which makes the total report 44 pages in length.  The Committee have been supplied with a redacted version of the full report.  Redaction appears where Council officers are named or where third-party individuals or suppliers are named.  This redaction is based on the advice of the Monitoring Officer and is explained in full at paragraph 13 of the covering report.




Public Statements from Mr Alex McKinstry


Statement 1.


Re the assertion that the Committee must enter "exempt session" to discuss the Bayside audit. Procedure Rules 4A 9.2.1-3, from the Constitution, are cited in this regard, but these conflict with primary legislation - specifically, Section 10 of Schedule 12A to the Local Government Act 1972, which states that such material "is exempt ... so long as, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information." The ICO cites various scenarios where "public interest" might arise, several directly applicable to Bayside: "securing ... best use of public resources", for instance, or "ensuring fair commercial competition". (The latter is particularly relevant, as it's still unclear why six-figure procurement waivers were necessary for Bayside.) The Committee should look to primary legislation, therefore, and debate the report in open session.


Statement 2.


Whether the debate proceeds in open session or not, I have some figures relating to Bayside which may prove interesting. The catering receipts totalled £158,399.80. Unfortunately the organisers had anticipated receipts of £435,742, so, while there were significant underspends - only £38,469 was spent on food, for instance, whereas the organisers budgeted for £77,613 - the receipts were still way too low to generate anything near a profit; the ANTICIPATED net profit had been just £36,252. Other significant expenditure included: catering staff, £51,705; bar staff, £45,404; drinks, £23,084; "organisation and management", £19,300. Total expenditure was £331,829.99, which, deducted from the catering receipts, generated a net loss for Bayside of £173,430.19. This information was obtained by me under Section 25 of the Local Audit and Accountability Act 2014 and has been shared with all committee members.