Arch-owned football club '˜overvalued by Â£1.5m'
'˜A massive Â£1.5million was wiped off the council's assets' after auditors said property owned by development company Arch was overvalued.
According to auditors EY, land and buildings leased to Ashington Community Football Club, owned by Arch, had been valued at around £1.9 million, ‘on a depreciated replacement cost basis’, but using a ‘more appropriate basis’ of market value would be between £0.25million and £0.5million.
The issue reared its head at last week’s full meeting of Northumberland County Council. During members’ questions, Coun Dave Ledger asked the council leader, Coun Peter Jackson, why the authority’s accounts had not yet been signed off.
Coun Jackson responded to assure councillors that the accounts were signed off by the audit committee at its meeting on November 22, and have now been filed.
But he continued: “The reason for the delay and this is the first time ever that we’ve had to file the account with a qualifying statement in the year ending March 31, 2017.
“In a highly unusual step, the council’s auditors, EY, refused to sign off the accounts without a qualification because according to them there was some significant weaknesses in proper arrangements for acting in the public interest and evidence of the principles and values of sound governance were not appropriately applied to decisions taken for the year ending March 31, 2017.
“This qualification actually relates to the council’s development subsidiary Arch, of which you were then chairman, Coun Ledger.
“Another reason for the delay was that an Arch asset had to be revalued on the instruction of EY. The previous administration through Arch had invested around £1.5million in Ashington Football Club, which is chaired by the Labour Party national chairman Ian Lavery MP.
“The auditors insisted that the £1.9million valuation of this asset, that was in Arch’s books at that time, had to be revalued and that revalution reduced that by a massive £1.5million to just £400,000, wiping £1.5million off the council’s assets.
“I think once again this piece of information and proof reasserts the fact that actually Arch has not been adding any real value to the council over the period so far and still is a source of extreme concern to all of us in the administration.”
The county council trialled the live streaming of its full meeting last week – and it could become a regular feature. To watch it, visit www.youtube.com/user/NorthumberlandTV