Management failure has been identified as the principal factor leading to a trading deficit of £3.7million in Coventry City Council's Building Services Division, (BSD) part of Coventry Contract Services.

A detailed report, commissioned by the CCS investigation committee, will be presented to the committee and the CCS Board on Friday.  It has taken five months to complete under the direction of a team of council officers, with independent external advisors ensuring the integrity of the process.

City Council chief executive Iain Roxburgh said:

"A trading deficit of £3.7million is a very serious matter and occurred through management failings in an organisation which did not respond to changing commercial demands.  This deficit is not the result of major fraud.   The report clearly indicates that BSD failed to modernise and adapt to new practice and so left unable to respond to challenging contracts.

"To put some perspective on the situation it is useful to point out that BSD is just one part of CCS, and that other trading arms, namely the cleaning and catering operations, are trading successfully.  The deficit also must be seen in perspective.  BSD has a turnover of some £22million and the city council as a whole in excess of £550million.

"Acceptance of the analysis and recommendations of this report will allow us to draw a line under what has happened at CCS and within the Building Services Division in particular.  The emphasis of the City Council now must be to learn the lessons of the last few months, and to put into practice the recommendations of this very thorough report.  Many of those have already been implemented, and others are now forming the bases of action planse to direct the organisation over the coming months."

Leader of the City Council John Fletcher said:

"Coventry City Council is widely regarded, by our external auditors and by national government, as a well managed, successful and innovative authority.  Our concentration now is to ensure that reputation is sustained by all departments and divisions and we shall make sure we implement the lessons of this report to achieve success."

MORE INFORMATION: Coventry City Council   01203 831081

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