Labour slams out-of-court £600k parking contract payment to Mouchel

Published: 01 April 2011
by JOSH LOEB

CITY Hall stands accused by opposition councillors of wasting £600,000 of public funds after a “bungled” parking contract tendering process.  

The money was paid in an out-of-court settlement with parking services provider Mouchel, which launched a legal challenge after failing to clinch the council’s sought-after £46million four-year parking enforcement contract.

The company were named preferred bidders for the contract in March 2010 but this was then rescinded and the contract retendered, resulting in Mouchel’s commercial rival NSL clinching the deal.

Mouchel launched a legal challenge and the case was settled out of court. 

The council says this is not an admission of liability and has defended it as “only responsible course of action” to avoid potential court costs. 

Westminster Labour leader Paul Dimold­enberg said the pay-out was a slap in the face for users of council services facing cuts.

He said: “This is another £600,000 wasted by the Conservatives which will now result in cuts elsewhere in the council’s activities to pay for this massive blunder. At a time when £60million is already being cut from the council’s budget, when nursery staff are being sacked, when services to vulnerable older people are being cut and when the St James’s Library is being closed, this massive £600,000 out-of-court settlement is further evidence of the Conservatives’ total and complete financial incompetence.”

Lee Rowley, Westminster Council’s cabinet member for parking, said: “The council’s new parking enforcement contract will save the taxpayer more than £10million over four years when compared to our previous enforcement contract. We are disappointed that Mouchel were unhappy with the way this contract was awarded and that we have been forced to reach a settlement with them, despite the fact that the loss will inevitably impact front-line services. I would like to stress that this decision was not taken lightly. We have not admitted liability and had the matter gone to court we believe our case had a good prospect of success. But when faced with expensive courts costs and the risk of an outcome that could have seen the council having to pay out up to £4million in compensation, we felt a £600,000 settlement was the only responsible course of action to take.”