Speaking at Tuesday’s meeting of the council’s cabinet, Cllr Glen Sanderson said he was ‘embarrassed’ at the contents of a section 114 notice issued by the authority’s director of finance, Jan Willis.
The report uncovered potential unlawful expenditure by the council relating to its international health consultancy business, which began on an informal basis under the previous Labour administration.
Cllr Sanderson also pledged that action would be taken following an independent investigation.
He said: “I am hugely dismayed and embarrassed. Nevertheless I am very grateful that (the director of finance) has perceived to get to the bottom of what, to be honest, members have been trying to get to the bottom of for a very long time.
“To be honest, I feel really embarrassed for the sakes of the people in this room, these senior officers who do very good work for the council, and I feel very embarrassed for the people out there right now working on our roads, emptying our bins and teaching our children.
“All of those people I apologise to for the fact that we have this report. We will take appropriate action very soon and we will carry out a full, independent investigation so we get to the bottom of this once and for all.”
The report identified an issue with the international business, and said it should have been registered as a separate company under the Localism Act 2011. Further concerns were also raised about a £40,000 annual payment to council CEO Daljit Lally as an “international allowance” on top of her salary.
But at the meeting, Ms Willis said it was likely the work had brought in money to the council – although there were a number of issues that meant it was difficult to say how much. A “summary of financial performance” was carried out which suggested that the council had made a profit of around £800,000 up to the end of 2021.
However, Ms Willis added: “That represents the best-case scenario because there could have been other costs. My personal view is that the council probably made a profit and it is somewhere between nought and £800,000.”
Other members of the cabinet praised officers for the report and said they had been trying to get information for some time. Deputy leader Coun Richard Wearmouth revealed he had been accused of “bullying” when trying to find out more details
He said: “When we have asked questions about this as a cabinet, and the old cabinet it hasn’t been easy getting answers about basic things. What you get accused of is bullying and putting inappropriate pressure on staff by asking questions.”
He added that he and other members had been told to “keep their noses out” when asking questions.
The report will be presented to all members at the extraordinary meeting of the full council tomorrow.