Legal advice was sought from Peterborough City Council just hours ahead of an important vote on its budget after allegations its spending plans may be unlawful.
The council spent £940 to receive assurances its cost-cutting proposals were compliant with legislation after it was revealed the Government was investigating the sale of the city’s public assets to balance the books.
Earlier this month councillors voted through the authority’s budget after being assured by the man responsible for the city’s finances Cllr David Seaton (pictured) that the allegations were “fake news”.
However, Cllr Seaton’s remarks came on the same day that the council had sought last minute legal advice from Peter Oldham QC of 11 King’s Bench Walk, based in London.
The advice was sought after The Bureau of Investigative Journalism (TBIJ) had revealed the Government’s investigation, which remains ongoing.
The Ministry of Housing, Communities and Local Government was reacting to the TBIJ’s findings that in the past four years the council appeared to have used nearly £23 million from selling property (capital receipts) to help balance its books.
While councils are allowed to use money from selling properties for certain purposes, they are not allowed to use it simply to plug holes in their budgets. The cash-strapped Conservative-run council has strongly denied any wrongdoing on multiple occasions and insists it has used the sales to pay off debt, which is legal.
A council spokeswoman said: “On the day we sought advice from a leading QC - Peter Oldham, who is a specialist in local government - there was a meeting of Full Council where members were asked to agree the 2019/20 budget which included proposals to use capital receipts to repay borrowing.
“At this time there was uncertainty about a potential challenge from government and we did not have a final statement from auditors confirming the legality of these future proposals. We would not receive a final statement from auditors until the new financial year when our accounts are audited.
“We could not have gone into that council meeting to set our budget for the year ahead, including council tax rates, without complete assurance for councillors that we were acting lawfully.
“If we had done so and then been subject to any type of legal challenge, there may have been a need to reset the budget and potentially reissue council tax bills to all our residents which would have been a significantly higher cost.”
A TBIJ spokesperson said: “The council’s decisions could have serious consequences for Peterborough and it is vital this is reported. It is very concerning that a councillor called this “fake news”.
The Government confirmed they are investigating and the Bureau Local stands by our reporting.”