The Government originally believed Peterborough City Council had breached spending laws to balance its books - before deciding to take no action against the authority.
A fortnight ago the Ministry of Housing, Communities and Local Government said it was ‘not taking any action’ against the council after investigating its sale of assets to balance its budget, although it did not state that the practice was legal.
The council claimed it was using the money it made from the sales to pay off borrowing costs, which is legal, and not to plug its multi-million pound deficit, which is not.
However, an email sent in March from the MHCLG to the council, which has been uncovered by the Bureau of Investigative Journalism, states that the council’s budget plans “seem to suggest” it had illegally used asset sales to plug its deficit. This prompted a response from the council which questioned why the Government “believes the council has acted inappropriately”.
Asked why the MHCLH decided to take no action against the council when it originally believed it had acted unlawfully, a spokesperson re-issued an earlier statement which did not address the question. The council said it was “unsurprised” that the MHCLG was not taking any action. The allegations had been called “fake news” by the cabinet member responsible for the council’s finances, Cllr David Seaton.