Residents of Pendle have had suspicions all along. Now Pendle Council's auditors are raising concerns regarding the legitimacy and transparency of the Council's joint ventures with companies like Barnfield and Brookhouse.
In the 2026 Auditor's Annual Report, it states:
"Within our previous AAR we identified Significant Weaknesses with the Council arrangements and raised five associated Key Recommendations. We have reviewed progress against these recommendations and note that, although some improvements have been made, three recommendations remain in place.
Joint Ventures – We have concluded that the Council should commission independent legal advice on its relationships with joint venture companies to ensure appropriateness of the governance arrangements. As the Council’s work to address this is incomplete the Significant Weakness and Key Recommendation remain."
They go on to be explicit in their concerns about Councillors' relationships with the companies and how conflicts of interest are not always declared. Exactly the sort of thing that raises questions about corruption.
It says:
"Significant weakness identified in relation to governance
Key finding: Within our previous AARs we identified that there was a Significant Weaknesses in the governance arrangements underpinning the Council's relationships with its joint venture companies because members who are also directors of the companies do not always declare conflicts of interest. We raised a Key Recommendation that the Council should commission independent legal advice on its relationships with and governance of its joint venture companies.
Management appointed an independent legal advisor to undertake a review of the relationships and governance, including a review of potential conflicts of interest..
Evidence: We have observed that risks identified relating to the joint venture companies now appear in the Strategic Risk Register and that these will be managed in the same way as those relating to the Council's financial plans, other strategies, and operational activity. However, the report on the arrangements has not yet been fully actioned to date, the report and suggested improvement being presented to Council during 2025-26.
Impact: It is not clear that the Council has not identified actions to address and manage the risks related to its joint ventures and is managing and mitigating these. Full implementation will ensure that all aspects of the governance of the companies are sufficiently robust and compliant with the law relating to local government and companies. We have concluded that this remains an area of Significant Weakness and have restated our Key Recommendation.
Key Recommendation 2: The Council should ensure implementation of the independent legal advice on its relationships with and governance of its joint venture companies to ensure that all aspects of the governance of the companies are sufficiently robust and compliant with the law relating to local government and companies. The Council should also implement any recommended changes to governance arrangements in relation to the companies."
Pendle Insider wrote to Pendle Council regarding the recommendations from the auditors and said that they had already implemented the recommendation and were able to because the auditors had made the same recommendations in previous years - see below:
"RESOLVED
That it be agreed that –
(1) the Executive will exercise the shareholder function in relation to the Council’s joint venture companies;
(2) all councillors who are directors of the Council’s joint venture companies, register their directorship as other registrable interests under provisions of the Council’s model Councillor’s Code of Conduct;
(3) all councillors who are directors of the Council’s joint venture companies appropriately declare their interests at all relevant council meetings and comply with the Code as regards their not participating in discussions and voting on matters in which they have declared an interest."
Take note of part (3) above, as we will come to that in another article soon. Councillors agreed 'not to take part in discussions on matters they have an interest in...'
So it seems there is an overlap with the timing the audit was conducted and the implementation of action by the Council. For now, the Council says it has implemented all recommendations. We will find out if that is the case at next year's audit.