Scarborough Council has called in the police to investigate a leak of sensitive financial documents which revealed that the authority was planning to borrow £22 million to fund a town centre regeneration scheme.
The move was confirmed today by the council’s legal director Lisa Dixon who said the council had concluded that the breach could amount to misconduct in public office and had now handed the investigation over to North Yorkshire Police’s cybercrime unit.
The documents in question appeared online laying bare the confidential financial implications of a large regeneration project after the council approved the purchase and demolition of the former Argos building in Newborough to create accommodation for 200 university students and trainee nurses and doctors in partnership with the York Teaching Hospital NHS Foundation Trust.
The documents revealed the council would almost double its debt by borrowing £22m to fund the project in which it will also partner with developer Wrenbridge Land Ltd and CU Scarborough, the town’s university.
It also showed the developer would make more than double the profit of the council under the terms of the agreement.
At a meeting of Scarborough Council’s audit committee today Mrs Dixon confirmed that a criminal investigation was now underway.
She said: “Clearly any breach of confidentiality is serious but where it could cut off potential investment in the borough, where it could have potentially attract personal liability on the member or officer who has released that information, if a developer loses profit [on the back of that leak] they could go after that individual personally to seek recompense as well as against the council.
“There are also fines under GDPR (General Data Protection Regulation) and the reason we have gone to the police on this particular occasion is that after discussions we feel that the potential breach equates to potential misconduct in public office.”
Misconduct in public office is a criminal offence which in the most serious of cases can carry a prison term of life imprisonment.
The council is co-operating with the police and has handed over a number of documents to the force.
Mrs Dixon added that the council’s stance would “send a message” that it would take breaches seriously.
Coun Helen Mallory (Con) said she was “appalled” that any member of the council would release confidential information.
She added: “We do business with people and if we have a reputation as an organisation where our members deliberately release sensitive, confidential information then I hope the investigation finds out who has done this and only right that person is taken to task. It is the reputation of this borough that is being called into question.”
Labour councillor Carl Maw said it could have serious consequences for the council.
He said: “This could mean no contractors will work with us. It puts at risk every future project we could possibly have.”
The regeneration project was approved at a special full council meeting held on July 12.
Councillors were given the financial details before they voted to approve the project, though the figures were not made public.
The documents appeared online three days later, prompting the investigation.