Harry Fone is grassroots campaign manager for the TaxPayers’ Alliance.
The TaxPayers’ Alliance has long campaigned for greater accountability and transparency when it comes to public spending. Quite frankly, there’s not enough of it and nowhere is this more evident currently than at Northumberland County Council (NCC). You’ve likely read by now the worrying report from Max Caller MBE regarding the authority’s governance, off the back of a Section 114 notice issued in regards to unlawful payments made to the current chief executive, Daljit Lally.
The creation of an international healthcare consultancy business, Northumbria International Alliance (NIA), by the council was not necessarily a bad idea. But there has been a fundamental lack of documentation relating to the finances and profitability. As things stand, the company has never produced any public accounts and councillors are not aware of what staff are on the payroll.
This lack of transparency and openness (seemingly from council bosses) should serve as a valuable lesson to all councillors across the country. To try and shed more light on the matter I spoke to NCC councillor and audit committee member, Nick Oliver.
I began by asking if any financial records exist for NIA and whether a profit or loss has been made. Oliver says he has been asking for them since 2018 and, to date, nothing has materialised. He’s seen one report that suggests a profit of £300,000 but he believes that overheads were not taken into account. What I find shocking is that the business was not registered with Companies House nor can I find any mention of it in the registered parties section of NCC’s statement of accounts. One can only surmise that this has either been a deliberate attempt to avoid transparency or extreme negligence.
The payment of a £40,000 international allowance to Lally has piqued a lot of people’s interests. Why was it deemed a necessary addition to an already generous remuneration package and where did she travel to? According to Oliver, it didn’t go through the proper process and would be hard to justify even if it had. As the Section 114 notice makes clear, it was not correctly authorised. It is understood that Ms Lally (and other directors) travelled to destinations such as China, India, and Dubai. A return trip ticket to the latter is believed to have cost in the region of £3,700 which the council denies was a Business or First Class flight. I find it hard to believe it was for an economy class seat.
In the same vein, is there evidence of work completed for these international clients? Again, information is sparse with just one presentation made a year at informal cabinet meetings. These are described by Oliver as “light on financial information but comprehensive in terms of the nature of the work.” He points out that Northumbria was “ahead of the game” in its healthcare set up so there was some merit to the consultancy.
Which makes it all the more troubling that if the business had some viability why have financial records been so hard to get hold of? I ask Oliver if any internal or external audits have been done. In short, no. To date, no proper audit has been done, although a “summary of accounts from incomplete records” has been compiled by the Section 151 officer. It’s been said publicly that the external auditor has been frustrated in his efforts to get information. It’s not clear to the public what the staffing structure was or how many employees were on the payroll. Councillors found they got more helpful information from Google rather than internally because of so many “blockages”.
This tallies with Caller’s report which states that many people were unable to provide information as they were subject to non-disclosure agreements. With Caller himself saying:
“It is worth noting here that the number of such individuals subject to these agreements is significantly higher than our collective experience in other authorities.”
So where do we go from here? It’s important to note that NCC’s finances are still in good shape and many authorities can only wish their financial position was as healthy. It seems to clear to me though, that if taxpayers’ cash has been spent unlawfully that every effort should be made to reclaim it. Furthermore, those responsible for a lack of accountability and transparency must be held accountable and any unlawful payments repaid.
Councillors from every corner of Britain should take note of Northumberland and ensure such incidents aren’t repeated on their patch.