HC Deb 27 November 1975 vol 901 cc260-1W
Mr. Whitehead

asked the Secretary of State for the Environment if he will now announce the result of the investigation into alleged contractual irregularities concerning the M5 motorway.

Dr. Gilbert

Yes. Copies of this report, together with a report by the Department giving its conclusions, will be available in the Vote Office of the House.

The independent investigation has been thorough and painstaking. It has revealed no evidence of corruption or fraudulent practices.

It has shown, however, that:—

  1. (a) the measured items included in the bill of quantities on which tenders were sought for this section of the M5 were enhanced by an element which varied from section to section of the bill and which amounted on average to 4.33 per cent. Although this practice is not condoned by the Department, final payment under the contract is based on the measurement of work actually executed and not on the quantities in the tender bill of quantities;
  2. (b) the measurement engineer failed to convert side measurements into quantities of work in time to check the contractor's interim accounts and the consulting engineer did not correct this situation. As a result interim payments made during the course of the contract included certain amounts in advance of their being properly due;
  3. (c) some arithmetical and clerical errors appear in the final account;
  4. (d) there were shortcomings in the contract procedures and financial control 261 followed by the consulting engineers on this contract. The procedures adopted by the consulting engineer for the preparation and agreement of engineering matters and for reporting the physical progress of the contract were, however, adequate and properly complied with;
  5. (e) although payments on account of claims were included in interim certificates without the Department's knowledge, all claims were properly admissible in principle under the contract. The detailed valuation of one claim, however, appears to involve a possible under payment to the contractor whereas on another an alternative method of evaluation might reduce the amount payable. These two claims will be checked.

The action which the Department is taking to follow up the findings of the investigation and to strengthen its own procedures for the future is set out in detail in the report by the Department to which I have already referred. It includes action to ensure that all corrections, which the findings of the investigation have shown may be necessary are made to the final account before it is settled with the contractor and to seek compensation from the consulting engineer for the additional costs arising from the independent investigation and the early money included in interim payments.