DIXON Ducks ‘n’ Dives in Whitby Harbour Storm
- – an “In My View” article by NIGEL WARD, offering a tentative interpretation of events at a recent Council meeting – and subsequent correspondence.
Last year, Scarborough Borough Council’s External Auditor – MAZARS LLP – made a Statutory Recommendation to the Council informing them of the necessity to make an Application to the Courts not later than 26th March 2021.
One way and another, this has yet to come to pass.
Reminder (Skip this section if you are already familar with the background)
Before proceeding with a brief up-date on the interminable saga of the Whitby Harbour Undertaking, readers may wish to revisit my article “Whitby Harbour: Payback Time?”, published on 25th July 2021:
The following backgound introduction to that article sets the scene:
Readers may be aware that, following a Formal Objection to the Accounts of SBC for 2015/16 (and subsequent years) – on the grounds that revenues from Whitby Harbour and its adjacent ‘lands’ have, contrary to legal requirements, been directed to the General Reserve Funds (and NOT ring-fenced for the maintenance and development of the Harbour) – the Council’s External Auditors (MAZARS) have served a Statutory Recommendation calling on the Council to make an Application to the Court to rule on the extent of the ‘lands’, the volume of revenue concerned and the Council’s accountancy methodology over a considerable number of years.
For the avoidance of doubt, the accountancy aspects of the Objection fall within the remit and professional responsibility of SBC s.151 Officer and Financial Director Mr Nick EDWARDS.
The responsibility to ensure that the Council acts within statutory requirements resides with the Monitoring Officer and Director of Legal Services, Mrs Lisa DIXON.
See also my article entitled “SBC Rogue Officers Wagging The Dog – Again”, (published 1st October 2021). This article covers Conservative Councillor David CHANCE’s efforts to challenge the senior Officers’ action:
Taken together, these two articles plot the course of senior Officers seemingly taking it upon themselves to handle the Council’s accountancy/legality problems associated with Whitby Harbour (and the External Auditors unwillingness to sign off the Council’s accounts since 2015/16) – in direct contravention to the Resolution of Full Council on 27th July 2021.
Finally, I draw readers’ attention to my article “Officers’ Silence is Golden”, published on Tuesday 26th October 2021. This article covers Councillor David CHANCE’s sterling efforts to challenge the senior Officers actions:
It is surely a matter of Public Interest to bring residents of the Borough up-to-speed on legal developments that are likely to have a massive negative impact on the public purse, especially in the light of recent revelations regarding the s.151 Finance Director’s handling of the Council’s Minimum Revenue Provision (MRP) difficulties.
Moving On . . .
Having received a formal Statutory Recommendation from MAZARS directing the Council to apply to the Court for a ruling on the extent of the Whitby Harbour Undertaking, the total extent of the Harbour Lands, and the period of time over which ‘adjustments’ to the Council’s accounts may be necessary, Councillors appear to have been thwarted in their attempts to resolve the crisis. Their Resolution of 6th September 2021, seeking to move the Officers along, has yet to be implemented. Unfortunately, the senior Officers seem to have (perhaps conveniently, for them) ‘misunderstood’ what was required of them.
Personally, I do not believe that.
The matter came before the Audit Committee, Chaired by Councillor Andrew BACKHOUSE [Unaff.], on Thursday 28th October 2021. I had a special interest in Item 4 on the Agenda:
To consider the report of the External Auditors, attached.
Readers are invited to watch the Council’s video recording of the debate:
Some of these exchanges are deeply nuanced. Participants were obviously acutely aware that this was not an occasion on which to put a single word out of place. But the tensions were close to the surface.
Before offering my interpretation, I would like to place in the public eye a sequence of documents that spell out the relevant significance, in date order, beginning with a letter from MAZARS addressed (specifically) to Councillors (not Officers of Paid Service), dated Wednesday 27th October 2021 – see below, or download here):
Next, a letter from the Council’s Monitoring Officer (a Statutory position) and Director of Legal & Democratic Services, Mrs Lisa DIXON, to Mr Cameron WADDELL, a Partner at MAZARS, dated Friday 29th October 2021 (see below, or download, here):
And, finally, a late Supplementary Report sent to all Councillors by Mr StJohn HARRIS, clerk to the meeting, (no doubt on the Monitoring Officer’s instruction), out of hours on Saturday 30th October 2021 (see below, or download, here):
Rather a lot to read, I know. But it is as well to secure it here on the Enquirer, for ease of future reference.
What this present article demonstrates, in my view, is what is known in military terms as a ‘rearguard action’. A retreat.
It is clear that MAZARS LLP has exhausted its patience with the prevarications and procrastinations raised by Scarborough Borough Council (SBC) senior Officers, who look to be ducking ‘n’ diving in an attempt to kick this whole shabby mess (“Negligence or Incompetence?”, to borrow Mr CORRIGAN’s phraseology) into the longest possible grass – ideally, beyond the termination of the Council’s existence.
SBC’s value to MAZARS, as a client, is approaching the end of its lucrative life.
MAZARS is (I quote from its website) “a global audit, accounting and consulting group employing more than 42,000 professionals in more than 90 countries through member firms”.
If I were MAZARS, I would not entertain for one moment the potential risk of placing my world-renowned company’s exemplary reputation in jeopardy merely to go along with the personal/professional needs of SBC Statutory Officers whose actions have left the Council exposed to the risk of budgetary imbalances that run into millions of pounds – and themselves in a state of considerable professional embarrassment.
In my opinion, MAZARS have pulled the rug. The Officers are on their own now. And Councillor BACKHOUSE understands the situation better than most. I believe we can rely on his diligence . . .
Meanwhile, I invite Mr EDWARDS and Mrs DIXON to join in with us on the chorus.