End in sight for Whitby Harbour accounts row as Scarborough Council 'file claim in court'

The end of the Whitby Harbour legal dispute may finally be in sight as Scarborough Council has now “filed a claim in the court” according to the authority’s auditor, Mazars.

The long-running dispute centres on an objection made by the Fight4Whitby pressure group which argues that more income has been taken out of the harbour by the council than has been spent on it.

In 2021, members of Scarborough Council voted to take proceedings to court over the objection which has meant the authority’s financial accounts have not been signed off since 2015.

The group launched a legal challenge in 2016 based on the 1905 Whitby Urban District Council Act. The local legislation states that income from Whitby harbour should be ringfenced for use within the harbour.

In January this year, the authority’s audit committee heard that the council was in the process of finalising its evidence in preparation for submitting it and councillors were told that a three-day hearing was likely later this year.

A new report prepared by the external auditor said: “The council has now filed a claim in the court in response to our statutory recommendation. When the court issues its declarations the council can assess the impact on the accounts for 2015/16 onwards.”

The report, prepared for an upcoming meeting of the audit committee on Thursday March 23, adds: “We issued a statement of reasons and our conclusions for objections for 2017/18 onwards on 5th May 2022. There are no open statutory objections on this matter.”

In January, the council’s head of legal and governance, Carol Rehill confirmed that the scope of the dispute extends “to not just the car parks but to include the entire extent of the Whitby Harbour undertaking.”

Depending on the outcome of the hearing, millions of pounds might have to be redirected to the harbour.

A council report from July 2021 said that “the position is uncertain and the court’s decision could be very unfavourable to the council” while also noting that the court may “determine that the council has acted reasonably and determine that the current treatment is lawful and appropriate.”

The report added: “The maximum income that the court could determine has not been allocated correctly would be £4.36m with the minimum being nil.”

The audit report states that there are “a series of outstanding objections” in addition to the Whitby Harbour dispute.

These include “an objection in relation to the operating agreement with the Yorkshire Coast BID Ltd” and an objection in relation to the “application of income from the [Scarborough] Harbour Undertaking”.

The harbour cases are set to continue after Scarborough Council is abolished on April 1, which will see the creation of a new unitary North Yorkshire Council.