Contract row over in-house triumph

A borough council is being forced to re-tender its catering contract following a row over the winning in-house bid.

Walsall Metropolitan Borough Council has suspended its catering manager, Peter Heath, whose direct service organisation (DSO) recently retained its contract after private firms failed to bid. The multi-million-pound operation covers more than 150 schools in the area, as well as welfare and meals on wheels.

The winning bid has been withdrawn and an internal inquiry is taking place. The Labour-run authority refused to reveal the nature of the investigation but Conservative councillors said it concerned the mathematics of the bid.

Mike Bird, leader of the Conservative group on Walsall Council, said: "When the tender was entered there were various arithmetical errors and some glaring inaccuracies that meant the direct service organisation could not perform to the terms of the contract. It would have meant wholesale problems, with possible job losses."

The contract, which has been held by the DSO for three years, is due to expire in June 1997, although the council has the option of extending it for a further year.

The internal inquiry is expected to last for another month.