Liberal Democrat statement on Spelthorne commercial investments

There has been comment in the media recently that some of the commercial property investments undertaken by Spelthorne Borough Council during 2017/18 may be unlawful.

The articles do not present a balanced view of the situation and appear to be designed for journalistic impact rather than to assist in reaching a resolution.

The articles indicate that sensitive letters have been leaked to journalists and these have been selectively used to create an impression negative to the Council. Liberal Democrat councillors deplore the leaking of any confidential documents.

The situation has arisen from concerns raised by the Council's external auditors, KPMG, about the 2017/18 transactions and their obligations to produce a Value for Money statement. As part of their duties under the Local Audit and Accountability Act 2014 KPMG have asked questions about aspects of the acquisitions. The issues are complex and involve areas of law and governmental guidance that are untested in court.

A recent report by the House of Commons Public Accounts Committee said "According to the Chartered Institute of Public Finance and Accountancy (CIPFA) borrowing purely to invest for yield has traditionally been presumed to be unlawful". Spelthorne BC has legal advice that supports its view that its actions do comply with all relevant legislation and guidance.

In May 2020 Liberal Democrat councillor Lawrence Nichols was elected as the first non-Conservative Chair of Spelthorne's Audit Committee. He was very concerned about the delays in finalising the accounts for 2017/18 and has worked with the Leader of the Council and officers to push KPMG for a resolution to this issue.

Cllr Lawrence Nichols said "I want to see this issue resolved as quickly as possible. The inability to finalise the 2017/18 accounts is unsatisfactory and the inevitable negative speculation is not helpful. Although I am an opposition councillor, I have no interest in anything other than seeing KPMG give the commercial property investments a clean bill of health. Failure to do could plunge Spelthorne into a totally unnecessary financial crisis."

Liberal Democrat councillors have concerns about how the Council got into this current situation and these which will need to be investigated after KPMG's issues have been resolved. We will monitor the issue, we will take action where necessary and provide residents with the accountability they deserve.

Articles have been published by The Bureau of Investigative Journalism, Surrey Live and The Times (behind paywall).

Spelthorne Borough Council has issued a response which is available here.

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