Whitby Town Council borrowed from charity when money ran out

Summarised from 2 outlets · Updated 13 Oct, 17:03 · Archive

Whitby Town Council borrowed £70,000 from charity reserves without approval when it ran out of money in 2023 and 2024.

Whitby Town Council ran out of money to pay its bills and borrowed £30,000 from the Pannett Art Gallery Charity in 2023 and a further £40,000 in 2024. An independent investigation commissioned by the council found that the transfers were made without public notice, member approval or trustee approval, and without public explanation of the council's true financial situation. The money was repaid after annual precept payments were received.

The report identified long-running weaknesses in financial management, governance and budget monitoring. Council reserves had been declining since at least 2018 before being further depleted by the Covid-19 pandemic and increasing costs. An independent specialist auditor concluded: 'By 2024 it had physically run out of money to pay bills.'

Whitby's mayor Sandra Turner said the council had commissioned the review itself after concerns were raised by its new town clerk and responsible financial officer following his appointment in January. Ms Turner stated: 'I fully understand why the findings of this report will be of concern to residents, and I appreciate that people will want answers.' She stressed that the council had not sought to hide the matters and that the report's findings would now be discussed openly by councillors.

How it is being reported

• Council ‘physically ran out of money’ and borrowed charity cash, report findsWhitby Town Council ‘physically ran out of money’ to pay its bills and borrowed tens of thousands of pounds from charity reserves without formal approval or public explanation, an independent investigation has concluded.The Press (York) · 13 Oct, 16:31
• Council ‘physically ran out of money’ and borrowed charity cash, report findsWhitby Town Council ‘physically ran out of money’ to pay its bills and borrowed tens of thousands of pounds from charity reserves without formal approval or public explanation, an independent investigation has concluded.Gazette & Herald (Malton) · 13 Oct, 16:31

In this story: Whitby Town Council · Pannett Art Gallery Charity · Whitby · Sandra Turner

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