No criminal investigation into audit report on council's development company

Confusion has surrounded the status of the KPMG audit report into Advance Northumberland since January, when the council’s executive director of finance, Jan Willis, said it was the subject of a long-term, ongoing police investigation – something Northumbria Police denied.

Ms Willis later admitted this was not the case and said the report would be shared with police before being released to the audit committee.

The council has now confirmed the report will not be released to the public as it contains sensitive information – and insisted there was no attempt to mislead the audit committee.

A spokesman for the council said: “This is a forensic audit report into Advance and legacy issues that pre-dated the creation of Advance and was commissioned from KPMG.There was never any attempt to mislead audit committee – it was a genuine misunderstanding that it had been shared with the police and could not be made public without their agreement.

“As Northumbria Police has confirmed they have not identified anything contained within the report which would warrant a criminal investigation the report has now be shared with the Audit Committee.”

Advance Northumberland was set up to replace its predecessor Arch, following concerns around governance and spending.

However in June 2021, the council’s chief executive Daljit Lally raised further concerns about Advance in a report at the audit committee, warning it had inherited some of its problems from Arch.

Ms Lally warned of “continuing weaknesses in governance” at Advance and issues in communication and “trust” between the company and the council – although at the time the company insisted improvements had been made and council leader Glen Sanderson – speaking in a political capacity rather than on behalf of the authority – defended the company.

It is understood the audit committee were presented with the report in a private session during last week’s meeting. Police have since confirmed the report was shared with them last month and that it was shared in full with councillors.

Northumbria Police have confirmed that an external audit report into Northumberland County Council’s development company did not contain anything worthy of a criminal investigation.

A spokesman for the force said: “We can confirm Northumberland County Council shared a report from KPMG with us on February 14 and that subsequently we have not identified anything contained within which would warrant a criminal investigation.

“We have not requested for any part of the report to be withheld.”