Concerns about the local authority-owned regeneration company were referenced within Daljit Lally’s email to all county councillors about ‘serious whistle-blowing concerns’ which was sent as she was placed on ‘extended leave’ – but was understood to be suspended – in early August. She returned to her post in October.
In a sign of ongoing tensions, the Local Democracy Reporting Service understands that senior councillors were not aware of any report ahead of Mrs Lally’s comments at the Wednesday, November 25, meeting of the authority’s audit committee.
While not on the agenda for the meeting, Advance – which was meant to represent a fresh start after governance and spending concerns, including serious allegations of wrongdoing, at predecessor Arch – was raised during a discussion about the council’s borrowing and lending.
Referring to the company’s holdings in retail, Cllr David Towns said: “A lot of our risk, a lot of our loans to outside bodies are to Advance. With our new remit going forward (the audit committee is now responsible for Advance), this committee is going to be more able to look at what’s happening with Advance, so I wonder if we can get similar reports when we pick that function up.
“We’re talking about risk to the council and lending money to other local authorities, but we’ve also got tens if not hundreds of millions of exposure to our own development company, so surely we need to be getting a report on that now our remit has been extended.”
Cllr Nick Oliver, the cabinet member for corporate services, responded: “The whole retail scene is very uncertain at the moment, but we have an Advance shareholder group which meets monthly and includes senior officers and members.
“We do receive financial reports from Advance and they are being scrutinised probably at a level higher than has ever been done before, because of the situation we find ourselves in.
“I can’t pretend the situation is rosy, there are big retailers going bust and we need to keep a very close eye on it. Chris (Hand, section 151 officer) and his team are working with the financial team with Advance to get a clearer picture of how things may pan out.”
Mr Hand added that the councils which have been scuppered by their retail investments tend to be those who have relied on commercial income to support their day-to-day services, which is not the case in Northumberland.
Following this debate, Mrs Lally said: “As shareholder representative, I have expressed some fairly serious concerns about the issues relating to Advance currently.
“I have put onto the work programme a report, which is likely to come in February, about a number of those issues, so it was just to give the committee assurance that we are looking at these issues and will be reporting on them.
“It’s not actually just about retail, I think it’s a much wider issue around the loans etcetera, just for clarity.”