The section 151 officer for Northumberland County Council (NCC) has issued a section 114 notice for unlawful expenditure, including an annual allowance paid to the chief executive.
Jan Willis, interim executive director of finance for NCC, highlighted two areas of unlawful expenditure in her report: the authority’s participation in the Northumbria International Alliance (NIA) and the additional “international allowance” paid to chief executive Daljit Lally since 2017.
Willis’s report stated: “NIA traded commercially from at least 2018 to 2021 and did so otherwise than through a company with all of the related income and expenditure being recorded in the council’s accounts. This is a breach of section 4(2) of the Localism Act 2011.”
The NIA was established in 2018 as an unincorporated partnership with Northumbria Healthcare NHS Foundation Trust to provide international healthcare consultancy services for commercial purposes.
The report also revealed that the £40,000 annual allowance paid to Lally “does not have proper authorisation and is in contravention of the council’s pay policy statements”.
NCC said the contents of the report would be discussed at a council meeting on 8 June 2022 and a course of action would be agreed.
Council leader Cllr Glen Sanderson said: “When the council meets to consider the contents of this report, together with the corporate governance review we commissioned from Max Caller CBE, I will ensure that the administration takes all appropriate steps to ensure that there is a new culture of openness, trust and accountability, in all that we do.
“We will continue to deliver high-performing services across neighbourhoods, schools, investment and jobs and in our key statutory services, thanks to our excellent staff.”
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