Where did the missing million go?
PUBLISHED: 18:11 18 June 2019 | UPDATED: 18:31 18 June 2019
© ARCHANT NORFOLK 2016
An independent investigation into how a council lost £1m in a deal to build a new enterprise centre should find out where the money went and who was responsible.
That was the call tonight, as West Norfolk councillors met to agree how the inquiry into the council's relationship with Norfolk and Waveney Enterprise Services (NWES) should be conducted.
Between 2012 and 2016, the council agreed to lend the enterprise agency £2.75m towards the cost of building the King's Lynn Innovation Centre.
But when NWES defaulted on the loan last October it emerged the building was worth £1.87m, leaving the council out of pocket by more than £1m on the loan, interest and legal costs.
Addressing the Conservative-run council's ruling cabinet tonight, Labour councillor Charles Joyce said: "When I look at this I see something like the burglar asking police to investigate the crimes he's just committed.
"This is such a big gap, where did the money go and who was responsible for it?"
Mr Joyce said the council should not set terms of reference for the inquiry as the Local Government Association (LGA) would know where to look and what to look for.
But councillors agreed a brief stating the investigation would focus on the relationship between the council and NWES.
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They also agreed it would look into the extent to which the "partnership" extended to other companies within the NWES group and whether these involved common directors or shareholders.
They agreed the investigation should look at what checks were carried out before the granting of loans and what they were secured on, along with lessons learned.
And they agreed to consider "the arrangements for the development, management and monitoring of large scale capital projects" in future.
A report to councillors said the investigation would cost £1,000 a day, which meant the final figure could be £40,000.
It will be led by an independent chair chosen by councillors from a shortlist proposed by the Local Government Association (LGA).
An investigation earlier this year found the council carried out no checks on NWES.
It also discovered legal agreements between the council and NWES were "inappropriate", heavily favoured NWES and were not signed by the council.
At tonight's meeting, councillors also agreed to set up a special board to oversee major developments such as the KLIC, to ensure due diligence was carried out.
The cabinet was also expected to discuss proposals to convert an under-used area of King's Lynn Corn Exchange into a cinema after it went into closed session.