As reported last week, external auditors EY recently presented their draft report for the 2017-18 financial year to the council’s audit committee.
The report says that they ‘identified a number of significant risks around informed decision-making as part of our audit planning work’.
It adds that the council ‘has made a number of high-profile decisions’ which ‘have a significant impact on the operations of the council’.
These were the restructuring of the senior management team and agreeing an exit package for the former chief executive, the relocation of County Hall, the withdrawal of the Local Plan and the intention to wind up the Arch Group.
While EY did not intend to modify its conclusion over any of these, the report does set out some observations and recommendations.
And the Labour opposition, which has previously raised concerns about each of these matters, says the auditors’ view ‘is a vindication of questions and issues which have not been adequately addressed by the Tory administration and independent coalition members’.
A party spokesman said: “The decisions taken by this fragile coalition led by under-fire leader Peter Jackson have created significant risks that need to be managed very carefully, not in the gung-ho, party-political way that seems to be the signature tune for this administration.
“This could see the council taxpayer pick up even more unnecessary liabilities because if allegations of Tory maladministration are true, the council taxpayer would be the last backstop.”
Disputes continue over what the final cost will be of the renovation of County Hall in Morpeth and the cancellation of the new council HQ in Ashington, while it was previously revealed that the departure of the former chief executive Steve Mason cost the council Â£370,000.
The withdrawal of the Local Plan, while controversial in its own right, is also at the heart of serious allegations and threats of legal action made by developer Lugano over its Dissington Garden Village scheme.
This led to the council’s cabinet last month agreeing to provide legal indemnities to Coun Jackson, chief executive Daljit Lally and cabinet member for planning John Riddle, a decision which has been called in by Labour.
Finally, the replacement of Arch with a new company, Advance Northumberland, has been put forward as a way of moving on from the governance issues which arose while Labour was in power. However, the opposition claims that a witch-hunt has been taking place in relation to Arch and that reports on concerning spending are politically motivated.
Overall, for the second year running, EY plans to issue a modified value for money opinion, concluding that ‘the council had proper value for money arrangements in place except for in relation to governance and oversight at the Arch Group’.
Its report also warned that Manor Walks in Cramlington and the adjacent Westmorland retail park, controversially bought by Arch during Labour’s reign, represent an ongoing risk to the company and council.
Ben O'Connell, Local Democracy Reporting Service