Latest on probe into Plymouth City Council's £72m share deal

Plymouth City Council is continuing to wait to find out if an investigation will be held into its controversial £72m shares and pension deal.

The council is also waiting to learn if it will receive a capitalisation direction from the Government, allowing its accounts from 2019/20 to 2022/23 to be signed off. In September, PlymouthLive revealed the authority has had the cut-off date for these accounts to be approved moved back to December 13.

At that month’s audit and governance committee meeting, the council’s finance chief David Northey said the council had asked the new Labour Government if it still intended to carry out an in-depth investigation into the shares and pension deal, but had not yet had a response.

Seven weeks later, a Plymouth City Council spokesperson today said: “We have no update on this.”

Mr Northey, the council’s section 151 finance officer, has told councillors that the Government is “minded” to grant the capitalisation direction.

A requirement of all the local authorities who are receiving capitalisation directions is that the Ministry of Housing, Communities and Local Government (MHCLG )commission a financial sustainability review. This look at the council’s budget and financial forecasts was carried out in the summer but did not probe the 2019 transaction itself. The results have yet to be made public and had not been told to the council in September.

PlymouthLive has contacted the MHCLG to ask what is happening with the more in-depth investigation and the capitalisation direction, but has yet to receive an answer.

The thorough investigation was ordered by the previous Tory Government into the council’s decision to use money borrowed from the Government's Public Works Loan Board to buy shares in London-based company Miel Solutions Ltd, in 2019, which then transferred the cash into the authority’s pension scheme wiping out a deficit.

The council has repeatedly stressed that the deal made financial sense and has saved it more than £9m in public money. But earlier this year, before the general election, local government minister Simon Hoare told the council he had “significant concerns” about the deal, which led to auditors being unable to approve accounts since 2019, and ordered the investigation.

It is understood the investigation was likely to ask about why a sum of £1.5m was paid to cover what the council described as “governance arrangements, filing fees and tax expertise and legal advice” as part of the transaction.

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