Lessons Learned From CHaP Project

11th March 2011

The Highland Council has learned lessons from the Caithness Heat and Power Project in Wick, and introduced measures to ensure the corporate failings are not repeated in any future project.

A total of 39 actions have been put in place in a response to an internal audit of the Wick-based enterprise and these actions have been acknowledged by external audit and the Accounts Commission.

The Council also believes that strong political and managerial leadership, recognised in recent external audits, is in place to prevent similar shortcomings in governance and financial stewardship of a project.

At a special council meeting to consider the findings of the Accounts Commission in respect of the Caithness Heat and Power project, the Council accepted the failings of the project in the early stages of the business, between 2004-2007.

Council Leader Councillor Michael Foxley said: "It is critical that the Council learns lessons from this project. There were real failings but when the extent of these came to light, the Council acted promptly, openly and effectively to ensure that these were highlighted and addressed. The Council has liaised closely and fully with Audit Scotland and continues to do so in taking the project forward.

"Since 2007 the Council has changed significantly. External audits have found there is a strong political leadership within the Council, with an Administration that works consistently and effectively and a strong Opposition, which closely scrutinises proposals. These audits have also recognised the strong managerial leadership that now exists within the Council. This combination should avoid a similar position developing again."

The Council noted that tenants served by ChaP had suffered no detriment, with heat and power maintained at all times.

The Council agreed:

(i) To note the Controller of Audit's report, of 9th February 2011, on the Caithness Heat and Power project, prepared under section 102 of the Local Government (Scotland) Act 1973.

(ii) To note the Accounts Commission's response to the Controller of Audit's report.

(iii) That the actions taken by the Council are sufficient to address the specific issues raised with regard to this project and are sufficient to ensure that no similar failings occur within future projects. This agreement should be confirmed to Audit Scotland and the Accounts Commission.

(iv) That Audit Scotland and the Accounts Commission will be kept fully informed of the progress of the project.

(v) That the Head of Internal Audit & Risk Management will undertake a follow up review in order to ensure that all actions have been implemented and are effective and agree that this report is presented to the Council.

(vi) To acknowledge and support the important role of its statutory officers.

The Council's response will be relayed to the Accounts Commission and published in the local media and on the Council's web site: www.highland.gov.uk