A public meeting to discuss the future of a heavily indebted, publicly-funded company set up to boost businesses in Leytonstone was suddenly closed to the public and press last night.
The E11 Business Improvement District (BID) Company has fallen into almost £87,000 of debt, prompting a police investigation and questions over its future.
A large slice of the debt is owed on unpaid tax regarding BID employees' income.
The organisation, set up in 2007 to promote the interests of businesses in Leytonstone, collects a levy from businesses and has received more than £150,000 of public funding.
Councillors, including deputy leader of the council, Clyde Loakes, have been members of the company's board while financial mismanagement was taking place.
A block of Conservative councillors called in several decisions made last month for scrutiny, including the resumption of levy collection backdated to the beginning of the year and the waiving of the levy collection charge until March 2015.
At the meeting, chairman of the Overview and Scrutiny Committee, councillor Peter Herrington, said it would be inappropriate to make public a restricted document entitled Litigation and Advice.
“I’m sure it is of interest to the people outside. However, I have to state that the legal advice is to discuss it in full, not to dip our toes,” he said.
“To discuss it in full we go in to a private and confidential session.”
In requesting the meeting the Tory councillors, including group leader Matt Davis, said in December independent auditors and council officers agreed that the company would be unable to pay its debts, raising serious concerns about its financial viability.
But they claimed the cabinet arrived at the opposite conclusion last month, despite little evidence.
“No evidence is presented in the report or in the decision to suggest why officers have performed a volte face and now, given the decision, must believe that the BID will have sufficient funds to pay off its liabilities,” they said.
“The E11 BID has a record of financial mismanagement and poor record keeping, it is therefore surprising the decision was also taken to ‘waive up until end March 2015 the charge to the E11 BID company for the collection of the levy by the council’.”
“Why does it appear that we are rewarding the BID company with taxpayer’s money for their poor performance?”