Council broke own rules over deal with firm run by ex-chief

East Riding Council appointed Mercury Design and Marketing Ltd – whose managing director Simon Taylor is a former head of communications at the council – to the post of interim communications manager at a cost of 5,333 per month.

The council's rules for procuring contracts worth between 2,001 and 30,000 require three quotations to be sought before a contract is awarded, and any obtained must be in writing.

Mercury, based in Hessle, East Yorkshire, was the only company to provide a written quote. The council only invited one other firm to make a bid but it declined.

The District Auditor has now advised the authority to take steps to "protect its reputation" by introducing a more transparent recruitment process, which includes better record-keeping.

The council said it appointed Mercury after it failed to find a suitable candidate from a shortlist of five interviewed on June 10 last year.

Steve Button, the council's director of policy, partnerships and improvement, told the District Auditor he disagreed with his view that he had failed to seek three quotations as two of the unsuccessful interviewees had been freelance journalists, and he had therefore "tested" the market.

The District Auditor, Mark Kirkham, said he found this explanation "unconvincing".

It has now emerged council chief executive Nigel Pearson, who sat in on the interviews, and Mr Button met Mr Taylor on May 1, two days after the post was first advertised and 22 days before the closing date for applications.

The District Auditor was told there was no record of what was said at the meeting.

The same day, in email to Mr Pearson and Mr Button, Mr Taylor said: "I look forward to hearing from you in due course."

In his reply dated May 5, which was copied to Mr Pearson, Mr Button wrote: "As we explained, we have placed an external advert for an interim press manager. This has a closing date of May 22 and we need to let that process conclude."

On June 9, the day before the interviews, Mr Button sent another email to Mr Taylor, which referred to a "draft proposal" made on May 19 and said he would need a financial proposal to consider it.

This arrived from Mr Taylor on June 12, proposing a monthly fee of 5,333, apparently on the presumption of a nine-month contract.

In a letter to Mr Pearson concluding his review of the Mercury contract, the District Auditor Mark Kirkham said: "It is clear from those exchanges that the director of policy, partnerships and improvements was seeking, at the very least, a contingency plan with Mercury in case the recruitment process failed to secure an appointment.

"Whilst the last two emails were not copied to you, the fact that the first three were indicates you were at least partially aware of the matter."

In response to an email from Coun Stephen Sloan seeking details of the Mercury appointment, Mr Pearson said discussions with Mercury only began after no appointment was made from the recruitment process.

Mr Kirkham said, however, that in view of the email exchange that statement was "misleading".

He told the Yorkshire Post: "There are issues the council needs to address but I haven't found proof of wrongdoing.

"I have set out findings which include issues the authority needs to address to protect itself and the reputation it has.

"The chief executive informs me he accepts those findings and will put those improvements in place."