An interesting question. What does your councils standing orders and financial regs say about large projects. Our council requires 3 quotations or goes through a tendering process depending on the project.
The idea of some sort of project management is a good idea for large projects. In the distant past our council built a community hall with a loan from the Public Works Loan Board. We even employed a professional project manager. However, this turned to tears, as they made a hash of it - and only thanks to the builder, who was absolutely brilliant at sorting out the cockups, that the project came in on time, if not quite on budget. Was it value for money - absolutely, but hiring professionals is not withouts its risks as well. I have seen something similar in another council too.
As to oversight, there is the annual audit process that every council has to submit too. Our auditor is very hot on the processes and record keeping, and makes specific recommendations on how we prepare to spend money on any given project.
I am also tempted to ask - if your are so concerned with your council - did you not consider standing at the recent election? Of course you may have valid reasons for not doing so - but it is often the best way of trying to have some small influence on the process, imho.