Council drops legal bid to claw back millions in defences fiasco

Scarborough Borough Council announced yesterday it has reached an agreement with former consultants High-Point Rendel (HPR) to withdraw legal proceedings in relation to a hugely controversial coastal defence project in Scarborough between 2002 and 2005 and was tens of millions of pounds over budget.

The council, which was criticised by the District Auditor in December 2004 for breaking the law and its constitution for engaging HPR and concocting a bogus report to make it look as if the contract was properly tendered, announced in 2007 that it was taking legal action, bankrolled by Whitehall, to recover a large chunk of the overspend.

But despite claiming it had received robust expert advice supporting the pursuit of legal action, it has decided to drop the bid after becoming concerned at the spiralling costs which the Yorkshire Post understands would have stretched to £3.5m – £1m of which the council would have been liable to pay.

Now the council is being called upon to disclose the extent of its legal bill over the failed action – the cost of which will be footed by the taxpayer.

Robert Goodwill, the Conservative MP for Scarborough and Whitby, said: “This started a lot of years ago.

“It would be helpful if the council published how much has been spent on this.

“That way people could make their own minds up.

“In any situation when one is advised that the good is going bad, it is time to stop.”

The scheme to erect rock armour and concrete blocks around Scarborough’s Castle Headland and Marine Drive was originally costed at £28m but spiralled to £51.9m due to delays and changes to the design. Much of the additional cost was picked up by the Department of Environment, Food and Rural Affairs (Defra).

Local Government troubleshooter Richard Penn said in his report on the contracts fiasco that HPR had decided that a detailed survey of the site was not required. The District Auditor said if HPR had made a detailed survey it might not have eliminated all the design and cost uncertainties, but it may have led to a more reliable forecast of the bill.

The auditor also found that by not following the procurement rules the council had transferred to the taxpayers the risks involved in a complex engineering project.

The council told the Yorkshire Post last night it was, “looking into publishing its costs incurred to date in the near future”.

Ian Anderson, head of legal and support services, said: “Following the completion of the works the council received robust expert and legal advice, which supported the pursuit of legal action against HPR to recover at least some of the additional costs incurred.

“As a result of this advice, the council initiated proceedings to recover costs. Within those proceedings HPR received equally robust expert and legal advice.

“The parties’ respective experts met in April and May this year and it became clear that there were significant differences of opinion between them. It was also clear that significant expenditure would need to be incurred by both parties to litigate the matter fully.

“Following on from those meetings a mediation meeting was arranged between the parties earlier this month to enable them to consider whether a mutually acceptable way forward could be arrived at.

“At that meeting both parties ultimately agreed that the proceedings be withdrawn with no admission of liability and each party bearing its own costs.”

An HPR spokesman was unavailable for comment.