Leatherhead AHEAD: reply from KPMG to our request for post completion audit of Phase II etc.

reply dated 29 June 2004, signed by Kevin Murphy, Director, KPMG LLP

Paula Sabine
Chairman Leatherhead Ahead

Dear Paula,

Leatherhead High Street - Phase 2 works

I write with reference to your letter of 15 March 2004 and subsequent letter of 4 May 2004 regarding the Leatherhead High Street, Phase 2 works. You raised concerns that the Phase 2 development in your view failed to achieve all of its principal declared objectives. You raised a number of specific issues, which we address individually below.

Our comments and conclusions relate solely to Surrey County Council to the extent of its involvement with these works. Before proceeding, I believe it is important that you appreciate the boundaries within which we, as the County's external auditors, can consider the matters raised by you. The kernel of your complaint, as neatly summarised in your letter of May 2004, is that money could have been used for an alternative purpose - which in your view would have been a better purpose. It is not our role to revisit matters of policy or the properly taken decisions of the Council. Our role is restricted to considering whether there is sufficient evidence to indicate that those decisions were properly taken, were for proper purposes and were subsequently effectively implemented. It is against this framework that we come to a view as to whether further action is required of us.

Consultation exercise and review by Mole Valley Local Area Committee

We have considered the consultation process for the revised plan for the High Street. We understand that the initial consultation process involved a public exhibition held in the Swan Centre between 21st and 30th October 1999. These dates were chosen because they encompassed two Saturdays. The scheme's designers and officers from the County Council manned the exhibition. Plans and a scale model of the proposals were displayed. An estimated 1,000 people visited the exhibition. Attendees were invited to take a leaflet away with them, which was to be returned as a response, indicating support or otherwise of the project. In total 71 responses were subsequently received, of which 77% were in favour of the project.

Following the public consultation, in February 2000, the County and District Councils approved the implementation of the Phase 2 enhancements subject to the availability of funds. These funds were subsequently secured from three sources, that is section 106 contributions, the Local Transport Plan Allocation with the balance made up from revenue resources.

We understand that when it was concluded, the completion of the water feature was no longer deemed appropriate and further consultation took place via two informal meetings. One was held at County Hall and the second at The Theatre in Leatherhead. Key stakeholders, including Leatherhead Ahead, were invited and attended both meetings. We understand that these meetings were held as informal 'drop in' sessions and therefore formal minutes were not taken.

At the Mole Valley Local Committee on the 11 December 2002 it was agreed that the ramp and associated works would be pursued, with the exception of the water element. The specification and subsequent implementation of the revised layout of the ramp and associated works was delegated to the Local Transport Manager, in consultation with the Local Committee Chairman and Local Members.

We are satisfied that this is evidence of an appropriate consultation process.

Independent Review

You express the view that had Professor John Whitelegg known that the project was to overrun, that he may have reached a different conclusion. You will appreciate that this is speculative conjecture and not one I am willing to comment further on.

Costs of the Project

We understand from the Authority that £750,000 was the sum allocated for the delivery of the Phase 2 development. This is comprised from three principal sources, namely section 106 funding together with residual amounts from revenue and capital funding. At the Mole Valley Local Committee on the 12 February 2003 the budget and spend to date in relation to the Leatherhead Phase 2 project for the financial year 2002-03 was noted as £750,000. At that time, expenditure against budget was noted as £384,000, with a forecast spend of £750,000. The Council expects the project to be completed materially within budget.

Structure of the ramp

You highlighted that in your view that the ramp and associated structure is potentially hazardous and that it was not entirely necessary. I would note that these are engineering matters that are beyond our competence and outside of our remit as external auditors and that your conclusions are disputed by the Council.

Post completion audit

You have commented that consideration should now be given to a post completion audit considering the;

• decision making process employed by Surrey County Council and Mole Valley District Council;
• legality of the Authorities decision to process with the revised works; and
• full cost of the project against the original budget.

We are satisfied that we have responded to each of these issues above and that without further fresh evidence, that no further action is required by us.

Concluding remarks

We have, concluded on the basis of the evidence made available to us, that no further action is required of either the County Council, or ourselves, in respect of the matters you have raised with us.
Whilst I recognise that our findings may come as a disappointment to you, I would like to thank you for taking the time to bring these issues to our attention

Yours sincerely
Kevin Murphy Director, KPMG LLP