Report includes “Alice in Wonderland accounting” claims councillor
11 February 2020
There were "many weaknesses" in the Borough’s Council’s handling of KLIC says all-party report.
On a miserable February Monday night in the council chamber the Borough Council's audit committee met to discuss the Council's own internal working party's report on the KLIC fiasco. Initially chaired by Angie Dickinson (the Gaywood councillor not the star of the 1970s Police Woman TV series) she stood down while she presented the working party's report.
In the absence of Labour leader and committee vice chair, John Collop, Cllr Tom Ryves took the chair. Heacham councillor, Stuart Dark and Dersingham councillor, Judith Collingham both sent their apologies for not being able to attend the meeting. In presenting the report Cllr Dickinson suggested that it happens that not all projects brought forward by the public sector will produce a positive financial return. After Cllr Dickinson had presented the working party's report Cllr Ryves asked for comments. South Lynn councillor Alex Kemp, a member of the working party herself, commented that her "Chief concern is the lessons learned have not yet been implemented."
Invited as a guest under the council's standing orders Cllr Charles Joyce, a long-time critic of the Borough Council's handling of the King's Lynn Innovation Centre addressed the committee. The first to call for an external inquiry into the KLIC, he acknowledged that the benefit to the public from schools or hospitals does not come in monetary terms. He claimed the "Alice in Wonderland accounting" in the report did not reflect the reality of the situation. He said initially there was a £4 million cap on the cost of design and build of the KLIC, but the working party's report showed over £6 million had gone into the project. Pointing out that to get the building to a value of £2.38 million identified in the report, it was necessary to include the value of the land it stood on, but that this had not previously been included in the value. Questioning the return of over 6% on the money spent and the net annual return of £150,000, claimed in the report, he said this falls well short of 6% of £6 million. But that overriding everything else that the working party had still not identified where the £6 million was spent, suggesting that a forensic accountant should be tasked with looking at the issue.
The working party's report was critical of the lack of due diligence carried out by the Borough Council before handing over money to the company. The issue of the default was highlighted, when Cllr Joyce explained that following the opening of the building the company came back to the Borough Council for a further £250,000 loan in September 2016. It was this that alerted the then chairman of the council's audit committee to the very real possibility that repayment of the original £2.5 million was at serious risk of default. The then audit chairman attended the Cabinet meeting where he expressed those concerns, but the council's Cabinet still passed the extra money over to the company.
Council leader, Cllr Brian Long, spoke to the committee acknowledging that the procedures followed by the council were not as robust as they should have been, but that in his opinion this was outweighed by the benefits the council now had from the building. Responding Cllr Joyce pointed out that greater direct involvement by the council was ruled out at the beginning of the venture, and the present situation was forced on the Borough Council following the company defaulting on, 30 November 2018, on its previous commitment to repay monies liable to the council. Borough Council Cabinet member for Business Development, Cllr Graham Middleton, suggested that the wounds will not heal while they are still being picked at.
The committee agreed the recommendations set out in the working party's report. These will now go to the council's Cabinet, and the report will be made available to the independent external investigation which is led by Alison Lowton.
Article by Town and Around's Special Investigator