by business editor Trevor Sturgess

Kent County Council has been cleared of competing unfairly with business.

After a probe of KCC’s commercial activities, the Audit Commission says it has found “no evidence of any financial support or cross-subsidisation…that gives any competitive advantage.”

It concludes that “the council’s commercial operations are structured in accordance with statute. Commercial Services and the council’s subsidiaries understand the limits to their powers and act within them.”

KCC commissioned the report after private sector bosses complained bitterly about alleged unfair competition, especially in recruitment, transport and landscaping operations. Kent Top Temps and Kent Top Travel in particular have both been accused of winning contracts from private sector rivals with artificially low tenders and hidden subsidy.

Bosses also alleged the strategy conflicted with the council’s Backing Kent Business campaign designed to help firms through the recession.

Although the audit watchdogs cleared KCC, they recognised private sector concerns about an alleged lack of transparency.

They urged the council to disclose more information, prepare longer accounts and undertake “independent reviews” of council contracts won by its commercial arm “to ensure that tendering procedures are adhered to fully and that no subsidisation occurs or could be alleged.”

Roger Gough, KCC cabinet member for corporate services, welcomed the findings: “In terms of matters of substance, this report has given a clean bill of health. It is what we always said and believed was the case. It is gratifying to see it set out in this way. We hope we can now lay this issue to rest.”

He said the council accepted all the recommendations and promised more transparency in future. But there would be no change in strategy because profits from commercial activities - £6.4m last year - eased pressure on the council tax.

Jack Parkinson, chairman of recruitment group HR-GO, based in Ashford, said KCC’s commercial activity made a mockery of its Backing Kent Business campaign.

“We’re all playing this game and pretending that KCC is helping local business but they are certainly not helping ours – they are competing with us,” he said. He dismissed the audit exercise as “a waste of time.”

Desmond High, director of Maidstone-based EMC Finance, added: “KCC clearly has an obligation to drive prices down but at the same time it shouldn’t be doing it by shafting local businesses.”

• More in Kent Business, out this week with the Kent Messenger, Medway Messenger, Kentish Gazette and Kentish Express.