'˜Failings' force Arch to disband

The decision was taken by board members on Friday following a ‘complex and comprehensive’ independent strategic review.

In an email to councillors, it was reported that the review had found ‘failings in relation to the operating principles and fundamental purpose of Arch’.

It was also outlined that ‘probity has not been at the level required’ and ‘decisions made did not always following appropriate procedures’.

The board will now establish a new company which will solely focus on Northumberland-based regeneration, job creation, affordable housing and economic growth.

The new company will still be closely aligned to Northumberland County Council and will still expected to operate as a commercial organisation and deliver profit-making schemes.

Richard Wearmouth, chairman of Arch, said: “We can confirm that the review into Arch has concluded and that the board agreed a range of actions that secures a bright future of a new organisation.

“This newly-formed organisation will focus on, and only on, driving the economic regeneration and development of Northumberland.

“This will ensure that we prioritise and support local communities, including residents and businesses.

“It is clear that significant improvements have been needed across working practices.

“Our focus must now be on the future which will be on securing long-term sustainable economic value across Northumberland.

“Tenants will not be affected adversely by these changes and all current programmes and projects will continue.”

He acknowledged there will still be a need for a construction arm to assist in the delivery of infrastructure and housing projects and a need to continue proactive management and potential growth of a portfolio of commercial and residential assets.

Last month, Northumbria Police confirmed an investigation was under way over financial and governance matters at the company, which will continue.

The strategic review focussed on leadership and governance, financial stewardship, people management, asset management, risk management (including health and safety), value for money, operating as a wholly owned public sector subsidiary and partnership working.

A spokesperson for Northumberland County Council added: “Supporting residents and businesses to thrive across Northumberland will always be a priority for Northumberland County Council and therefore we are pleased that the review into Arch has been concluded.

“We look forward to working closely with the team to drive through the ambitions of the new company.”