Councillors have been warned about ‘significant weaknesses’ in financial arrangements due to legal proceedings which have left the former Scarborough Borough Council’s accounts outstanding dating to 2015/16.
North Yorkshire councillors have expressed disappointment at the impact of ongoing legal proceedings relating to Whitby Harbour which have led auditors to issue a warning about “significant weaknesses” in the now-amalgamated Scarborough Borough Council’s financial sustainability.
The legal case centres on an objection made by the Fight4Whitby pressure group, which argues that more income has been taken out of the harbour by the council than has been spent on it.
In March this year, Mr Justice Sweeting presided over a two-day hearing at the Royal Courts of Justice in London.
However, some councillors said they did not expect a decision to be handed down imminently, with Coun David Chance telling a council meeting on Monday, December 9:
“I don’t envisage a ruling too soon because I’m told the judge in question is known for taking a long time to deliberate.”
The long-running legal proceedings have led auditors Forvis Mazars to “disclaim with [an] issue of concern” the now-defunct Scarborough Borough Council’s accounts between 2015/16 and 2022/23.
Presented at a meeting of NYC’s Audit Committee on December 9, the auditor’s report stated that the legal cases regarding the former SBC’s compliance with the Whitby Urban District Council Act 1905 and the Scarborough Corporation Act 1925 were evidence of
“significant weaknesses in the council’s arrangements for financial sustainability and for governance”.
However, officers said that the scale of NYC’s balance sheet meant that whilst currently unknown, the court’s ruling was
“not expected to be of such magnitude that it destabilises the new council”.
Councillor Neil Swannick, who represents Whitby Streonshalh, said there was
“considerable disappointment that so many legacy accounts were disclaimed by the auditors”.
“It’s currently being decided upon by a judge, and as a decision has not been made, that obviously is a concern because we don’t know the outcome, it’s an unknown.”
Vice-chair of the committee, Councillor George Jabbour, said:
“I attended part of the hearing which took place in London and it is a complex case which I found very interesting and informative.
“Personally I’m looking forward to finding out the outcome because it has implications for the accounts.”
Councillor David Chance highlighted the complexity of the issue, stating:
“[The case] also relates to what constitutes harbour land and that’s the difficult bit for the judgement because the complainant is contesting our view of what is harbour land.”
Whitby resident Sue Boyce, who has led the legal effort from its inception and has put tens of thousands of pounds of her savings into funding the proceedings, previously told the LDRS:
“We wouldn’t have fought for so long or so hard if we didn’t think we were right.”
Freedom of Information requests have revealed that the former SBC and new North Yorkshire Council have spent more than a hundred thousand pounds on legal fees.
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