Action plan to address issues raised by independent 'missing millions' report drawn up by Northampton Borough Council

A draft action plan has been drawn up by the council in response to an independent report into its £13.5 million loan to Northampton Town Football Club (NTFC).

Auditors KPMG branded several aspects of the 2013 deal unlawful and identified 'serious failings' by Northampton Borough Council (NBC) with a series of recommendations made.

The plan responds to those recommendations with the aim of improving the local authority's governance and avoiding the past mistakes which led to the 'missing millions' scandal.

But it is limited by NBC ceasing to exist from April 1, with West Northamptonshire Council (WNC) taking its place, so any actions will be down to the new authority.

A report to cabinet ahead of its meeting next week reads: "NBC fully recognises the serious nature of the report issued.

"It accepts the findings, conclusions and recommendations of the external auditor’s report into the governance arrangements in respect of the loan to NTFC.

"The council is required under section 24 and schedule seven of the Local Audit and Accountability Act 2014 to consider the recommendations of the report and decide what action to take in response.

"It is also essential that all decisions made by the council with regard to its governance arrangements are taken in full cognisance of the report’s findings and recommendations."

Councillors agreed to lend the cash to fund ambitious development plans for a hotel, conference centre and shops at Cobblers' Sixfields ground in 2013.

But work started to the East Stand was never finished after contractors pulled out, claiming they had not been paid, while more than £10 million has 'gone missing' and not been repaid to the council.

Northamptonshire Police is investigating claims of bribery, misconduct in public office, fraud and money laundering since 2015, with files sent to the Crown Prosecution Service last year.

KPMG's public interest report, published last month, said the loan 'demonstrated poor decision making' from the council and had a 'near complete lack of an approved business case'.

Other issues included the inclusion of land sales to offset debt, which ran a risk of being unlawful state aid to NTFC, insufficient time made available to address material matters, and inappropriate use of officer delegations to increase the loan value, without reference back to cabinet.

Furthermore there was a lack of competitive process in respect of proposed land/asset disposals to the developer and a failure to fully comply with the conditions associated with exercising the delegations, the report states.

Ten recommendations were made by the auditors as a result, including cabinet taking more decisions, better due diligence, less pressure to sign-off decisions, and more.

Officers have now come up with numerous actions to take to address each recommendation, which will be passed onto WNC when NBC is abolished on March 31.

Cabinet members are expected to accept the report and draft action plan during the meeting on Monday (February 22)