Councillors are calling on Lancaster City Council officers to reveal “secret” documents relating to the Storey Creative Industries Centre.
Coun Roger Mace put forward questions to chief executive Mark Cullinan at a budget and performance panel meeting on September 25, specifically in relation to a £90,000 “urgent loan” made to the directors of the Storey Creative Industries Centre (SCIC) Ltd in December last year.
Documents obtained by the Lancaster Guardian show The Storey was £250,901 in debt, with £90,000 owed to the city council, and £118,790.55 owed to NPower for gas and electricity. Councillors have also asked the city council whether it paid an insurance and utility bill for SCIC, and if so why the company has not listed this as money owed.
Coun Mace has also called on the council to apply for a compulsory liquidation for SCIC, which a creditor can make if assets do not cover debts.
This would allow the company’s finances to be looked at in more detail.
It would also determine whether the directors of SCIC were liable for any of the debts.
SCIC Ltd applied for voluntary liquidation last month, meaning liquidators are working on behalf of the Storey.
Coun Mace said: “We want to be sure that the city council does not lose public money that it doesn’t need to lose, in relation specifically to the Storey.
“We haven’t seen evidence to show that this decision was urgent. We feel that decisions such as this should be in the hands of members, and this begs the question, why did the decision to lend the Storey £90,000 have to be made on December 20 2011?
“Did the company mention a deadline, if so what was it and why did that date make it urgent?
“We would argue that the council be under the control of its members, not of its officers, in order to increase democratic accountability.
“I’m trying to discover how much we can get back, and how we can prevent this decision, that was made in secret, from ever happening again.
“I’m appalled that this is taking so long to get out in the open.”
Coun Mace has asked for an exempt document to be made public adding: “I’ve seen this document, but I would like it to be made public.”
The council said it hadn’t yet decided whether to make the document public, but would present further information to council members at a budget and performance panel meeting on October 23.
*Minutes of a council meeting stated the decision was taken with democratic accountability and in accordance with the city council’s constitution. The decision was taken in consultation with the Leader of the Council and the Cabinet Portfolio holder. The Leader took the unusual step of discussing the matter informally with Cabinet members in advance of taking the decision. The urgent decision was then considered in terms of waiving the call in by the Chair of Overview and Scrutiny Committee and subsequently the urgent decision was reported to Full Council in the Leader’s report