Delay in move to officially rid Northumberland County Council of Arch

Northumberland County Council’s bid to get rid of its troubled former company Arch once and for all has been held up.

By Ben O'Connell
Wednesday, 19th February 2020, 6:49 pm
Updated Monday, 24th February 2020, 1:34 pm
Northumberland County Council's County Hall
Northumberland County Council's County Hall

The authority’s controversial development and regeneration vehicle was replaced by Advance Northumberland in 2018, with the official transfer to the new holding company taking place on November 13.

However, as previously reported, Arch has remained an entity on the books of Companies House until recently, when an application to strike off the company was lodged.

A notice of this intention appeared in the London Gazette, the official journal of record, last month, sparking a countdown of two months until the company would be dissolved.

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However, this is subject to nobody raising a justified objection and a Companies House filing this week reveals that the striking-off and dissolution has been suspended as an objection has been received.

The details are not known, but objections in these cases can include the likes of failing to inform all the necessary parties; an employee wishing to take legal action or a creditor beginning legal action to wind up the company; or a part of the closure process not being followed.

The county council’s former external auditors raised questions about the merits of replacing Arch with Advance in their report on the authority’s 2018-19 accounts, given that all of Arch’s subsidiaries were transferred to the new company.

They stated: ‘It is our view that the same outcome could have been achieved by changing the name of Arch Corporate Holdings to Advance Northumberland at a significantly lower cost to the council, but this was not an option considered by cabinet.’

However, at the audit committee meeting in November, Coun Nick Oliver, the cabinet member for corporate services, said it wasn’t a ‘pointless exercise’, as suggested by one councillor, but had to take place because of the ‘serious reputational damage’, following a series of alarming allegations about Arch.

Plus, this was the meeting where the breakdown in relationship between the authority and its auditors, Ernst and Young (EY), became apparent, with EY resigning, just as the council was making moves to remove them anyway. EY has also resigned as auditors for Advance Northumberland.