Northampton councillors given legal warning ahead of debate over damning auditors' report into Sixfields loan deal

Councillors on the crucial audit committee discussing Northampton Borough Council's role in the failed Sixfields loan fiasco were warned about avoiding any potential legal action ahead of the debate.

Thursday, 8th December 2016, 8:30 am
Updated Wednesday, 14th December 2016, 2:08 pm
Mr Kennedy, middle, flanked by chief finance officer Glenn Hammons, left, and borough secretary Frances Fernandes, right, at the Guildhall

The PricewaterhouseCooper report released last week, revealed the council entered into a loan agreement of up to o£12 million with the Cobblers before producing a full business plan.

Among a list of failings it said officers were pressured into rushing through a deal by “management and politicians” and that the loan went ahead even when financial advisors said it was risky. Council chief executive David Kennedy issued an “unreserved apology” for his part in the affair, see page 10 and 11.

During the two-and-a half-hour meeting not one of the seven-member committee was personally critical of any individual council officer involved.

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It has emerged the councillors were given a legal advisory in a briefing beforehand.

A council spokeswoman, said: “They were reminded that as members of the audit committee, they were obliged to be challenging and they were also reminded to be conscious of the need to avoid defamation, and of their obligations to staff as an employer.

“They were told that this should not undermine their democratic role to challenge, and that they should be mindful of not putting the council at risk of any legal action, that may be expensive to the local taxpayer.”

But it left some on the committee wishing they could have been given more of a free reign.

Councillor James Hill (Con, Rectory Farm), said: “I am disappointed that it seems to me the that the report says the issues were down to the council procedures. I was personally somewhat frustrated that I wasn’t able to ask some of the tougher questions.

“Hopefully when the KPMG report finished those questions can be asked.”

The upcoming report by external auditors KPMG is likely to go into much further depth, though its completion date is not known.