Whitby Town Council has promised to make lasting improvements after an independent review revealed it borrowed £70,000 from the Pannett Art Gallery's reserves during a recent cash flow crisis.
Whitby Town Council has vowed to learn from “historic mistakes” after an investigation found the authority borrowed £70,000 from reserves linked to the Pannett Art Gallery during a cash flow crisis.
Town councillors have said they are determined to make “meaningful and lasting improvements” after an independent review revealed the authority ran out of cash and was forced to dip into charity reserves to keep the bills paid.
A watchdog report found Whitby Town Council had “physically run out of money to pay bills” by 2024, leading to £30,000 being borrowed from art gallery reserves in 2023 and a further £40,000 the following year before the money was repaid.
But at a meeting on Tuesday, town councillors insisted they had taken deliberate and proactive steps to get to the bottom of what happened, commissioning an investigation to ensure historic financial arrangements and governance shortcomings were “examined thoroughly and independently”.
Councillors were given fresh details about the borrowing arrangements and heard the money came from a reserve maintained for the Pannett Art Gallery, which had been kept separate from the council’s main current and savings accounts for several years.
The authority acknowledged shortcomings identified by the investigation, including weaknesses in financial management, oversight and budget monitoring.
Speaking before the meeting, Mayor Sandra Turner said:
“I think it’s important to emphasise that the council has not sought to brush these matters under the carpet. Quite the opposite.
“We commissioned an independent review, we have published the report in full, and its findings will now be discussed openly.”
Councillors said it was important to acknowledge and learn from “historic mistakes” and ensure the findings were translated into “meaningful and lasting improvements”.
The discussion came as councillors were told the authority’s finances had improved significantly, with stronger budget monitoring, tighter expenditure controls and better income recovery helping put the council on course for a better-than-expected financial position this year.
The review and its recommendations will now be considered by the full council later this month.
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