A SENIOR Wirral Council officer met a private contractor months before his firm was awarded work with the local authority worth tens of millions of pounds.

An astonishing report published today by the Audit Commission concludes that David Green, the council's currently suspended Director of Technical Services, “probably” broke European Union Treaty rules by meeting with the company representative – and by further then failing to declare an interest when the contract was awarded.

It is the second time in six months the council has been seriously rebuked for failings in its corporate governance.

Last year independent consultant Anna Klonowski found that in Wirral, practices which would be viewed as abnormal in most other local authorities "had become seen as commonplace”.

The latest damning report was published at midnight – just five hours after a council committee rubber-stamped the early voluntary retirement of the authority's chief executive, Jim Wilkie.

Today's report, written by District Auditor Michael Thomas, goes into the background of how privately-owned service provider Colas was awarded the £40m, five-year contract to assist the borough's Highways and Engineering Services (HES) section in October 2008 after a tendering process.

The four main criticisms of Wirral Council set out in the document are:

The Director of Technical Services probably broke EU Treaty rules as well as council procedures by meeting a representative of the successful contract bidder;

The Director of Technical Services should have made a declaration of his relationship with the contractor before he did so, and when he did it was incomplete and inconsistent with other evidence.

Inadequate tender evaluation resulted in the contract costing Wirral Council at least £1.4m more than anticipated when awarding it - and not all costs have been quantified yet;

The council does not demonstrate good governance. The probe found that despite it being such a high-value public-expenditure contract, it was not actually signed until 12 months after its start date.

The inquiry says councillors were not kept informed of problems nor was their approval sought for £1.4m of extra spending which became necessary as the highway maintenance works progressed.

Birkenhead MP Frank Field pursued the scandal - at one point asking the Serious Fraud office to investigate - after being contacted by a group of council whistleblowers, and said the probe highlights “astonishing basic failings”.

He said: “The Audit Commission report reveals a state of affairs in Wirral Council that I hardly believe possible to exist.

“I had come to believe that the administration of the council was merely broken-backed.

"I was clearly far too optimistic.

“The one group of people who deserve credit following the publication of this report are the whistleblowers themselves.

“I congratulate them on their resilience and determination to safeguard Wirral taxpayers’ interests.

“The only crumb of comfort lies in the fact that the level of competence described in this report is so low that serious fraud was probably impossible to organise.

“Thank God Bernie Madoff does not work for the council.”

Madoff is serving 150 years in a US prison with restitution of $170 billion after he admitted his Wall Street company was the largest Ponzi scheme in history.

One example of how Wirral's bills rocketed ahead of estimates was fixing street-lighting and traffic signals.

Originally, the cost had been massively below bids from five other failed tenderering companies at just 2% of their estimates.

But this later ended up costing Council Taxpayers an extra £1.4m when the price – attributed to having to pay a sub-contractor to carry out the work – rose "significantly higher" than was set out in the bid document.

Council leader Phil Davies said: "This is a highly critical report - with familiar themes - which identifies many of the same governance issues as other critical reports we have received.

"As a council we must now ensure what is wrong is put right – the people of Wirral deserve no less.

"An independent investigation is currently underway with regard to the role of the Director of Technical Services in this matter.

"I have asked the acting chief executive to ensure the investigation also establishes if any further action should be undertaken to ensure everyone who needs to be held to account is.

"Furthermore, while I accept all the recommendations that have been made by the Audit Commission, I am committed to going further.

"I am seeking an early meeting with opposition group leaders Jeff Green and Tom Harney to discuss the report and agree an all-party approach to tackling the issues raised.

"It will then be discussed at the improvement board and at a full meeting of the council.

While the report does acknowledge that we have taken steps to change our culture and, in doing that, the process for whistleblowing, we know that a lot more needs to be done – and quickly – to restore people's faith that they will be treated seriously and fairly if they raise issues of concern.

"This is my personal priority.

"Never again must this council fail to ensure our contracts demonstrate value for money for the people of Wirral – together we have a duty to rebuild trust in this council - a duty I intend to deliver upon."