No further funds will be released to a regeneration project in Glastonbury following the publication of an independent audit report.
The Life Factory is 1 of 10 projects in the Glastonbury Town Deal. Red Brick Building Centre Ltd is the grant recipient and responsible for delivering The Life Factory project.
Somerset Council is the accountable body responsible for the Town Deal and ensuring proper use of the £23.6 million Towns Fund grant from Government.
In late 2023 Somerset Council became concerned about management of The Life Factory project and in January 2024 paused funding while officers and elected members worked with the Board of the Red Brick Building in the hope of creating a viable plan for ensuring the delivery of the Project.
Despite the efforts made by all parties, it was with regret that Somerset Council determined that it was not able to adequately reconcile invoices in the grant claims received up to December 2023 with actual spend and progress on site, as required by the Grant Funding Agreement.
Somerset Council therefore referred the project for audit by the South West Audit Partnership (SWAP) due to serious concerns on financial management, governance and value for money.
The reports make clear that, despite identifying more than £2.89m of spend so far, the project cannot be successfully delivered in line with the Grant Funding Agreement and it is not clear that the project can be completed at all. This means that the Red Brick Building are not in compliance with the Grant Funding Agreement, and the Council may need to seek repayment of monies already spent.
Somerset Council Chief Executive Duncan Sharkey said:
The report has confirmed our concerns about the project. Although we took action to pause payments and refer to auditors, we accept the findings that our level of oversight and monitoring of this project could have been strengthened.
The audit also notes that a number of control weaknesses lie with the Red Brick Building. We believe these issues are isolated to this project.
We have taken immediate action to review our management of other infrastructure projects, including the other 9 Glastonbury Town Deal projects, and we are confident these are being managed robustly.
Although Somerset Council is not contractually responsible for any payments to contractors engaged in The Life Factory project, we understand the impact this is having on those with legitimate claims, a number of whom are local.
However, we cannot release any further funds. We continue to work with the Red Brick Building and the Glastonbury Town Deal Board to consider the next steps for this project while additional audit work continues.
The SWAP report will go to the Audit Committee on Thursday, 22 May at 10am. The papers will be available via the Audit Committee’s Agenda page.
