Call for investigation over Arch '˜breach'

At last month’s full council meeting, Coun Anne Dale, referring to the revelations about Arch’s lavish spending at real-estate conferences which were discussed openly at March’s audit committee meeting, said she was uneasy about these issues being brought to the public domain, referring to ‘fairness in the Companies Act’.

She went on to mention an investigation over a breach of the act by Conservative leader Peter Jackson in his role as a director when he ‘decried Arch in his manifesto’, but was stopped from discussing it further at that meeting following legal advice from the council’s solicitor.

Documents suggest that following the publication of the Tory manifesto for last May’s elections, which pledged to scrap Arch, legal advice was sought by the Arch board about a possible breach of the Companies Act and potentially removing Coun Jackson from the board.

A Northumberland County Council spokesman said: “Legal advice was sought under legal privilege. There has been no formal complaint made to audit committee.”

But the Labour group, which has criticised the ‘witch-hunt’ over Arch and the fact that the audit committee ‘has been taken over to discuss the matters of a company’, has now called for this aspect to be included in the investigation ‘in the interests of openness and transparency’.

A spokesman added: “How can we have confidence in the so-called independent investigation into Arch governance when this has not been examined?”

But Coun Nick Oliver, the Conservative cabinet member for corporate resources, said: “I understand the Labour administration attempted to remove Peter Jackson from the board before the last election, but Peter remained on the board as a thorn in their side raising issues of governance and highlighting risks being taken with public money at Arch.

“There is no need to revisit this – the result would be the same. Coun Dale was chairman of the audit committee for the previous administration so she should be better informed than most on these matters. Unfortunately on her watch the audit committee was kept away from Arch and that’s why we have had to unravel such a mess.

“A new company will soon be created which will operate with a clear purpose to regenerate our county and do so with stringent standards of governance and scrutiny and Peter Jackson will be on the board.”

Coun Georgina Hill, the current chairman of the audit committee, added: “I have serious concerns regarding the actions of the directors of Arch breaching the Companies Act during the Labour administration on a number of grounds.

“The actions of the Labour directors are still under police investigation and it would be odd to criticise Coun Jackson for publicly raising concerns that have been subsequently vindicated.”

However, while Northumbria Police has said that while it is working with the council on matters ‘relating to finance and governance issues at Arch’, there is ‘currently no ongoing criminal police investigation’.

Further concerns about spending at Arch were aired at the May meeting of the audit committee, which heard that £246,000 was spent on several company credit cards between January 2013 and June 2017 with ‘work continuing to isolate the proportion of this spend which relates to hospitality’.

A report to councillors also explained that Arch’s assets have now been valued at £9million less than previously estimated (the total portfolio is around £300 million), and that a further formal referral has been made to Northumbria Police, the details of which were not revealed, but it relates to ‘the potential misuse of public funds’.

The Labour group raised concerns about the legal implications of some of the information in this report being made public, with a spokesman adding: “We must be assured that council taxpayers’ interests are being protected.”

Ben O'Connell, Local Democracy Reporting Service