The Hepburn Shire has responded to a highly critical leaked draft report on the initiation and management of The Rex community hub project in Daylesford. The report was prepared but never released by the Local Government Inspectorate. Nevertheless, the draft has been widely accessed through the Council Watch face book page and and publications in the media.
The draft report is highly critical of Council management, governance, policy and procedures. It made a number of recommendations to address these issues.
Acknowledging community concern about the findings in the report, Mayor, Cr Henderson said, “The current leadership of the Council has implemented important improvements to governance, service delivery, community engagement and transparency.”
The Local Government Inspectorate investigated serious concerns about the purchase and development of a community hub at The Rex building in Daylesford. The Community Hub was originally planned and approved as part of the redevelopment of the Daylesford Town Hall precinct initiated in 2013. Despite extensive community consultation on the Town Hall project, in 2016 the Council suddenly and unexpectedly moved the project from the Town Hall and bought The Rex building in Vincent Street for the project instead.
After a series of delays and cost over runs, Council eventually abandoned the project in 2023 and sold the Rex building when it became apparent that costs of renovating the building were more than 10 times higher than originally planned. When the building was sold, the overall financial loss to the community resulting from the purchase and mismanagement of the project was $5.65 million.
It has now been 12 years since the project’s initiation. A further plan to create community facilities at the Town Hall precinct is currently out for consultation with the community. However, it is unlikely the revised proposal will be built unless significant additional grant funding can be obtained by Council.
The leaked draft Inspectorate report outlines a number of serious criticisms including the failure to obtain an independent valuation of The Rex prior to purchase, irregularities in the sale of two related properties at 59 Main Rd and 1 Bleakley Street, poor project planning, costing and management of The Rex renovation, lack of transparency in reporting, poor management of conflicts of interest, inadequate contract management and failure to follow the Council’s own policies and procedures in relation to a series of planning, procurement, contract management and recruitment matters.
Despite the significant criticisms of the planning and management of the Rex project and the financial loss and delays for the Daylesford Community outlined in the draft report, the Local Government Inspectorate has refused to release a final report. Neither the Inspectorate, nor the relevant Ministers have ever adequately explained why the report was not released or tabled in parliament.
Understandably, there is considerable community anger about the Inspectorate’s failure to report, the lack of accountability for the financial loss incurred by the community and the delay in providing modern community facilities for Daylesford and Hepburn Springs.
The draft Inspectorate report has made a number of recommendations to address the inadequate Council policies, procedures and practice that contributed to the mismanagement of the Rex project. In response, the current Council Chief Executive Bradley Thomas acknowledged the significant past failings and said that in the intervening period, “there has been considerable senior staff turn over. A new team is in place and there is a commitment to act honestly and openly to address problems and issues when they occur.”
Mr Thomas provided a detailed response on the 42 recommendations outlined in the Inspectorate’s draft report that had been put in place during his time as CEO. He indicated that the Council’s improvements to policy, procedure and practice to address the failings outlined by the Inspectorate had recently been considered and endorsed by the Council’s audit committee, which includes independent representation.
