Damning report finds Northumberland County Council 'operating in a dysfunctional way'

A meeting is taking place on the day a report into Northumberland County Council's governance arrangements is published. Credit: ITV News Tyne Tees

An extraordinary meeting is taking place in Northumberland as an independent report into the county council's governance arrangements is published.

The report by local government expert Max Caller was commissioned by Northumberland County Council in February and was published on Wednesday 8 June.

Mr Caller has previously investigated failings following the financial collapse of Northamptonshire County Council and allegations of wrongdoing at Liverpool City Council.

His report comes after more than 18 months of tensions at Northumberland County Council.

Max Caller said more than 100 people have been interviewed, thousands of pages of documents have been read and hours of council meeting videos have been watched.

He said watching council proceedings "has not been very edifying" because so much focus was on minutiae and internal battles.

According to his report, "services ... are starting to deteriorate due to the lack of direction and focus at the top of the organisation".

Mr Caller also suggests a new chief executive is now needed, adding: "The position of the current chief executive needs to be resolved.

"It is common ground between the chief executive and the leaders of the political parties that this improvement journey is not something she can lead on."

Councillors debate at a meeting following the publication of the report into the council's governance. Credit: ITV News Tyne Tees

He also criticised the culture at the authority, describing it as "promoting suspicion and mistrust", adding there was a "fear of consequences and the working environment was described as harmful".

"Colleagues state that there is a difference between what is said, 'the values on the wall', and what is done," he added.At the extraordinary meeting, council leader, Conservative Glen Sanderson, said: "It's a great pity you are unable to look at how things are today .. the atmosphere here is completely different."I hope we can all work together in future."

Labour leader Scott Dickinson said: "We can't pretend this hasn't happened. We can't just take the bits we like, and ignore the bits we don't like."

Independent group leader Derek Kennedy, putting it all on the Conservatives, who have run the council for six years, said: "The baseline for this is 2017 when there was a new administration elected."

What tensions have there been within the council?

The council’s chief executive, Daljit Lally was placed on a period of “extended leave” in August 2020 after sending what she called a “whistle blowing” email to all Northumberland councillors, raising concerns about a council-owned group of companies called Advance Northumberland.

The disciplinary process against Mrs Lally was later described as “‘irredeemably flawed’ and “unlawful” in an internal report leaked to ITV News.

A month later, on 2 September, the Conservative council’s leader, Peter Jackson, was removed after losing a vote of no confidence. He was replaced by fellow Conservative Glen Sanderson.

In May 2021 the Conservatives took overall control of the council, winning 34 of 67 seats in local elections.

But after Tory councillor Cath Homer stood down, citing “decisions being made and action being taken at the county council that I have struggled to accept”, the party lost its majority with the Liberal Democrats winning her Hexham East seat in a byelection.

In May 2022 a rare Section 114 report was issued by the council’s Finance Officer, raising the alarm over what were described as "unlawful payments", including an annual allowance of £40,000 paid to the chief executive, Mrs Lally, on top of her salary.

The report made clear that it did not seek to attribute any individual blame or responsibility for actions or omissions that may have led to the unlawful expenditure.

However, the senior lawyer, Nigel Giffin QC, who provided advice for the report said “there is no evidence that I have so far seen of the allowance being decided upon or approved by anybody or person who might even arguably have had the power to do so.”

The report also raised concerns about a consultancy business, Northumbria International Alliance, which was operated by the council. The business was not set up as a separate legal entity, something the report says breached the Localism Act 2011.

Daljit Lally has been approached for comment.