(Inset): Brian McRandal Chair of the Business Forum
Larne Business Forum has confirmed key details of its letter to Gordon Lyons MLA Minister for Communities requesting an extraordinary audit of Mid and East Antrim Borough Council (MEABC).
The letter details historic failings not adequately explained, ongoing failings not adequately explained, and future risks in respect of financial management and the delivery of value for money at MEABC.
Commenting on the historical failings Brian McRandal Chair of the Business Forum said:
“It is really concerning that there has been no explanation as to how these serious failings were ever allowed to occur, what the recommendations from the local government auditor were and what progress has been made in implementing them.”
Turning to the current failings Brian noted:
“How can it be that notwithstanding the errors of the recent past and the recommendations from the local government auditor that two years later MEABC can find itself with an in-year deficit in excess of £7 million. No competent business would survive such chaotic financial management.
“This is a council that has ensured businesses in Larne are paying historically the highest business rates in the UK and still it cannot manage its finances.”
On the planned massive increase in borrowing by MEABC, Brian stated.
“MEABC is a council with one of the lowest levels of usable reserves and with one of the highest percentages of its spending already devoted to debt and interest repayments.
“So massively increasing the borrowing by a council with the track record of MEABC in financial management is seriously worrying for the local business community.
“At virtually 12% we already have ruinous business rate increases planned for Larne which leaves us 49% more expensive that the least expensive council in Northern Ireland and that is before the extra borrowing is factored in.”
Asked if he was optimistic that the Minister would act on the call for an extraordinary audit, Brian said:
“We have made a series of compelling arguments, and we note that the Minister’s predecessor stepped in to order an audit of Causeway Coast and Glens council to protect ratepayers’ interests. I see no reason why our current Minister would not step in to protect ratepayers in Larne from the financial mismanagement at MEABC.”
Larne Business Forum has outlined the group's concerns below in regards to Mid and East Antrim Borough Council, under (i) historical failings, (ii) ongoing failings, and (iii) future risks.
Background Note on Historical Failings
LBF advised the Minister that we were concerned to note in the Local Government Auditors’ report in respect of the MEABC 2021/22 financial years weaknesses in procurement and contract management including the excessive use of Direct Award Contracts.
LBF also made reference to a failure by MEABC to ensure the proper use of Business Cases which can lead to an inability to ensure value for money and weaknesses in completing the Councils contract database – a key tool in facilitating timely re-procurements.
The local government auditor noted in her report that she “had made a number of recommendations which are being addressed by the Council and I would hope to see measurable improvements during the audit of the 2022-23 financial statements”.
LBF reminded the Minister that the hard pressed ratepayers in MEABC still have had little or no clarity regarding how these transgressions were ever allowed to occur, the nature and extent of the recommendations made by the local government auditor and the extent to which the recommendations have or have not been effectively implemented.
LBF believe that MEABC ratepayers are entitled to much greater clarity on these matters, and it is for that reason that we believe that the above facts support our call for an Article 22 direction for an extraordinary audit in relation to all factors which contributed to the 21-22 in-year deficit.
Background Note on Ongoing Failings
LBF further advised the Minister they were shocked to learn that notwithstanding previous failing and recommendations issued by the Local Government Auditor that on 24 October 2023 MEABC announced that it had discovered it was running an in-year deficit of some £7.2 million.
Additionally, aside from the fact that the council was in receipt of publicly funded reports by consultants PwC regarding the state of its finances, LBF noted that no suitable explanation has ever been provided to ratepayers as to how such an extraordinary shortfall was allowed to happen, and whether the shortfall related wholly and exclusively to factors occurring in that financial year or indeed flowed from issues in prior financial years which had either not been identified or remedied.
LBF argued that the above facts again support their call for an Article22 direction for an extraordinary audit in relation to all factors which contributed to the 22-23 in-year deficit.
LBF believe such an audit would meet the calls by two former Mayors who demanded greater clarity on “….why the council has got into such financial dire straits that they need to raise service charges left, right and centre.”
Background Note on Future Risks
LBF drew the Minister’s attention to the fact that although not the subject of any formal statement by the council they also understand (from comments made in the council chamber) that MEABC intends over the next few years to substantially ramp up its borrowing from a current level of some 54 million to approximately 93 million. LBF indicated that MEABC already has one of the lowest levels of useable reserves and at 10% one of the highest percentages of its expenditure already committed to capital and interest payments.
LBF believe such an extraordinary rise in borrowing built on an already unsustainable non-domestic rate rise is a recipe for ongoing financial instability. It is for that reason also that LBF believe this borrowing decision provides further support to their request for an Article 22 direction in respect of an extraordinary audit of MEABC.