NORTH East Lincolnshire Council's finance controls remain 'a serious concern' according to an independent inspector.

Auditor Andy Marr was commissioned to report on the council's finances after it was branded "negligent" by an audit committee of inquiry into why £7-million of taxpayers' money was invested in the doomed Icelandic banks.

His report focuses on the implementation of measures to prevent public cash being put at risk – an area he claims NELC still needs to drastically improve.

Mr Marr said in his report: "We are reviewing your response to the failure of your control framework to prevent the risk of loss of public funds. The control defects identified by Internal Audit remain a serious concern."

Councillors sitting on NELC's audit committee have now called for "an end to complacency" from council chiefs – and agreed to send a strongly worded letter to chief executive Tony Hunter to express their "disappointment" at the authority's two star rating.

As reported, NELC is in the bottom 17 per cent in the league of authorities and progress is "slower than other authorities" according to independent inspector James Taylor.

He said progress had been made in several services, such as Children's Services and crime reduction, but more had to be done particularly with financial services.

Committee chairman Coun Daniel Khan said: "I find it disappointing. It is sad complacency has crept in. There has to be some significant changes with the use of resources and the value for money.

"Councillors might have to play a more significant part in the running of the council. There is going to be a blurring of roles between councillors and officers."

However, Mr Hunter has hit back, saying extra measures have already been put into place after undertaking an internal review and seeking external advice.

He also said recommendations made by Mr Marr would be put in to practice to further protect future public investments.

He said: "The council has shown its commitment to openness and transparency over mistakes made.

"It is good that it now seems likely that we will get back a good proportion of the money invested in the collapsed Icelandic banks. There will always be judgement calls to make in making investments which get the balance of risk right.

"However, it is, of course, essential that we learn the lessons of what went wrong, and the combination of internal and external support we have used to help put improved processes and systems in place reflects this intent.