Committee to review probe into former South Tyneside Council Leader's credit card use

South Tyneside Council has confirmed that its Audit Committee will consider the outcome of an investigation into a former Council Leader's credit card use.

The investigation, which dates back to 2020, relates to credit card use by former Leader Iain Malcolm, who left the local authority in November 2020.

Following concerns raised by three Statutory Officers, Internal Audit reviewed all credit card transactions and associated documentation for the initial period of April 2011 to March 2016 relating to Malcolm's Council credit card.

Internal Audit carried out its review to reconcile the amounts identified as personal use against the cheques that were paid in by him to cover these amounts.

It was reported that the total credit card spend amounted to £23,272.11, of which, 46% (£10,797.55) was identified by Malcolm as personal use.

The value of the cheques reimbursed was £5,807.88 less than the declared personal spend for the period between April 2011 and March 2016.

There were also transactions totalling £3,023 identified on the credit card for those months where a Schedule of Expenditure document was not completed - some of which the Council say could be related to personal expenditure.

Examples of this include spending at Seaham Hall, on clothing and petrol.

In May 2020, Malcolm requested an update on how much was owed for personal use on the credit card, with the outstanding amount calculated to be £18,909.86 - this was settled by Malcolm.

South Tyneside Council referred the matter to Northumbria Police in 2020, with the Force determining earlier this week that there was insufficient evidence to proceed with a criminal investigation.

This means that the Council can now move forward on several connected issues, the outcomes of which it says will "drive continuous improvement at the authority".

The Audit Committee will now review the effectiveness of governance, risk management and control matters in this area.

Cllr Ken Dawes, Chair of Audit Committee, said: “The public can be confident that we have absolutely tightened all protocols and process to avoid there being any opportunities for this to happen again.

“This includes limiting the use of cards to incur expenditure where there is a necessary business need and a process of independent checks where expenditure has arisen.

“Further checks around the use of electronic cards to incur Council expenditure indicated no issues of concern and that these historic problems arose principally from the actions of one individual.”

Councillor Tracey Dixon, Leader of South Tyneside Council, has highlighted that progress has been made at the local authority since she took over as leader.

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Cllr Dixon commented: “When I became Leader back in 2020, I was determined that this council would work with the people of South Tyneside to bring about real and lasting positive change for the borough.

"Since that moment I have been relentless in that pursuit, and I am satisfied by the progress made.

“I never said we would change overnight but in the last few years we have worked at pace, reshaping South Tyneside Council to be a proud organisation that listens to its residents and businesses and acts upon evidence and insight to make the borough a better place.

“We continue to engage with the workforce and make necessary and additional commitments to deliver on our commitments and address any concerns, where required.

“We have strengthened our engagement with residents, businesses, and partners as well as increased employee satisfaction year on year.

"Furthermore, we have brought millions of pounds in funding to South Tyneside and are in strong shape to move forward with significant transformation projects across all three towns.

“Change is never easy, but we have set out to create the right foundations for the Council and our communities to thrive.

"This has been a challenging period for the Council, but we have faced those challenges head on and will continue to do so. I am excited about where we are now and for the future of South Tyneside.”