Hospitality bills of crisis-hit council
POLITICS: Northamptonshire County Council spent huge sums on corporate hospitality, string quartets and lavish events in 2015, including £2,700 on a heritage dinner, as it was heading towards its financial crisis, it has been revealed.
NORTHAMPTONSHIRE COUNTY Council spent huge sums on corporate hospitality, string quartets and lavish events as it was heading towards its financial crisis, it has been revealed.
During 2015 when the state of the finances was becoming serious, the authority paid for a number of luxuries including £2,700 on a heritage dinner at Rushton Hall, £3,624 on a flypast at a memorial event and £4,500 on a marquee for an event at Boughton House in Kettering.
It also spent £80,000 with Northampton Saints rugby union club, which included the cost of a stadium hospitality box. The payments were made through the council-owned company NEA Properties, which an internal council investigation has found had ‘minimal’ governance and documentation.
The extravagances were funded from the proceeds of a sale in September 2014 of a number of units in Northampton to tenants, The University of Northampton.
The sale had been approved that same month by the authority’s cabinet, however £700,000 of the £820,000 sale value went back into county council funds and the remainder stayed with NEA properties, some of which was spent on luxury hospitality.
The limited company, which was first incorporated in 1983 under the name Northamptonshire Enterprise Agency, came under scrutiny in January 2017 after UKIP County Councillor Michael Brown blew the whistle over concerns about the expenditure of the company.
The councillor who lost his seat in May last year, and who is an independent financial advisor, said: “At the outset as a public organisation they were keeping secret the accounts of a limited company it owns under the small companies exception. This should not happen as it leaves itself open to abuse of public funds.”
A resulting internal audit gave a limited assurance rating. The report was marked as confidential and circulated to the council’s interim finance director Damon Lawrenson and monitoring officer Susan Zeiss as well as the then chair of the audit committee David Watson.
The report found: “There is no evidence of improper spend or improper management of the company but in the absence of various records only Limited Assurance can be provided.”
Labour Councillor Gareth Eales, who represents the Dallington Spencer Ward, said: “There needs to be a full and thorough investigation to get to the bottom of this.
A spokesman for the council said: “An Audit Committee report in November 16, 2017, reviewed concerns about NEA Properties Ltd, a wholly owned county council company.
“The governance of the company was reviewed including its finances. The conclusion was that while only limited assurance could be provided over the governance of the company, the organisational impact was minor.
“The report also found that expenditure and financial transactions were transparent. However the committee did draw up a number of recommendations and work on addressing these will be done as soon as possible.
“A resolution to dissolve NEA Properties Ltd was signed by the company directors on September 12, 2017.”
It follows news that local authorities in Northamptonshire have set out plans for a re-structuring after the county council was left facing a £70m budget shortfall. The move comes after a Government inspector warned earlier this year that the problems facing the county council were “deep and ingrained”.