Serious questions have been raised about procurement processes at Sandwell Council after companies bidding for the four-year contract were whittled down to two run by ex-council worker Azeem Hafeez.
It has since emerged drivers at one of the companies, North Birmingham Travel, failed DBS checks leading Birmingham City Council to terminate its contract with the firm, heaping further embarrassment on Sandwell Council.
Conservative MP for West Bromwich East, Nicola Richards, has questioned how “council officers were allowed to draw up these proposals and, furthermore, they were allowed to make it all the way to cabinet sign-off before being scrutinised properly”.
The Sandwell Conservatives have demanded to see details of an initial review into the process, which found "no initial evidence of financial wrongdoing, impropriety or non-compliance with the procurement and contract procedure rules".
They have accused the council of a number of failings over the school transport contracts affecting more than 600 SEND children in the borough, including absence of scrutiny, unfair bias against small businesses and lack of transparency and questioned why other firms were removed from the process in favour of North Birmingham Travel and County Cars.
Tory councillors said a large and expensive contract being handed to two firms run by the same person was unprecedented.
Council leader Rajbir Singh has promised a thorough investigation into how the companies were selected.
Mr Hafeez is the son of former deputy leader Mahboob Hussain, and both were named in a explosive 2016 report on council land deals. He denied any wrongdoing.
Councillor Jay Anandou, deputy leader of the Sandwell Conservatives, said, “I am concerned about the council’s irresponsible decision-making in relation to this school transport contract. The school transport service has constantly overspent its budget and has now put at risk the transportation of more than 600 of our most vulnerable young people.”
“The findings in this report published today acknowledge that while safeguarding measures are necessary, the council has acted unreasonably by failing to scrutinise a proposed award of £22m of taxpayers' money to companies owned Mr Hafeez.
"By omitting 'known' conflicts of interest, displaying weak controls and implementing a high risk delivery model, the council has failed its schools, parents and our most vulnerable young residents.
“The council refuses to appreciate the reputational damage associated with their management of this contract and subsequent internal investigation. I therefore encourage the council’s leader to publish the findings of his internal review and an external audit that is unbiased and independent."
A Sandwell Council spokeswoman said: “We are currently in the process of starting an external review into this matter and it is important to let that be completed without prejudging its outcomes. As previously stated we will publish the findings of any external or internal review once they are complete, and while we have not seen evidence of wrongdoing, if any comes up in the course of the investigation we will deal with it as a top priority.”