MP calls for answers as council fails to published accounts

Simon Clarke, Conservative MP for Middlesbrough South and East Cleveland, has written to the chief executive of Middlesbrough Council to ask why the council has not published its draft accounts for the last financial year. The 2022-23 draft accounts were due at the end of May.

The council has said it is a national issue faced by many authorities and “a common picture across the country”. Councillors are to hear an update on the situation at the end of this week.

The council website says “the delay is due to awaiting the resolution of audit work on the 2021-22 accounts”, which itself was delayed because of a “complex set of factors contributing to audit delays across the sector”.

Mr Clarke said every other council on Teesside, and the Tees Valley Combined Authority, had published its draft accounts, and he understood an issue with pension fund valuation which held things up was resolved weeks ago.

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The former local government minister said: “For any public body, or indeed any business, the timely publication of accounts is a key duty and vital to maintaining public confidence. For Middlesbrough Council to be four months late in publishing its draft accounts raises serious questions about what exactly is going on.

“We know all the other councils in our region have published theirs, despite facing the same issue with pension valuations, so it begs the question – what is going on with Middlesbrough Council? What are they not telling us?

“Middlesbrough Council is on the brink of having commissioners sent in by the government to take over the council. We cannot be in a situation where a lack of transparency worsens the already serious governance concerns that exist, and I hope my letter will get us clear answers and secure the prompt publication of our council’s draft accounts.

“Everyone in Middlesbrough deserves to know where we stand.”

A Middlesbrough Council spokesman responded: “The publication of accurate and timely financial statements is a critical statutory duty for any public body and we are working hard with our external auditors to address current delays.

“The reasons behind the delays in publication of the draft accounts have been considered transparently by a politically balanced committee of councillors, on several occasions over the past two years. A further detailed update is included in a public report to be considered by the audit committee on Friday, October 6.

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“The issue of local authority statutory audits over-running and being significantly behind statutory deadlines is not just an issue affecting this council, but is a national one faced by many local authorities. Indeed, no Teesside authority was able to submit audited statutory accounts by the September 30, 2023 deadline and this is a common picture across the country.

“The Department for Levelling Up Homes and Communities has set out proposals to address the audit backlog for consultation. Potential changes could have significant implications for current and future audits of statutory accounts.”

The council’s latest report says the draft statement of accounts for 2022-3 has not yet been published because of adjustments to the previous year’s audit. It says the main reasons are “onerous regulatory requirements for external auditors” and extra work and evidence needed on areas like value for money and the council’s governance issues, with just 12 per cent of 2021-22 audits completed in time.

It anticipates the draft accounts will be signed and issued “before the end of this calendar year”.

In Stockton, accounting issues had a knock-on effect earlier this year as a company responsible for the finances of a publicly-owned hotel faced the threat of dissolution with a strike-off notice, which was later stopped. A Stockton Council report referred to delays with the 2021 to 2023 accounts, with a national backlog of council audits: “Many local authorities are affected by the issues outlined… causing the majority of authorities to be delayed in finalising their accounts. This is an incredibly frustrating situation.”