Staff at the Independent Group for Change, the disbanded party established by centrist MPs in 2019, “inappropriately destroyed” financial records, a report by its auditors has found. According to the auditors, documents including bank statements and files recording details of donations to the party were destroyed by former members of staff. None of the documents, auditors said, could be “satisfactorily reconstructed”. The report, contained in accounts filed at Companies House on Friday, said the loss of the documents had limited the scope of the auditor’s review of the party’s finances.
Neil Davidson, the party’s treasurer, disputed aspects of the auditor’s characterisation of the party’s record keeping and insisted there was no impropriety in the destruction of documents. He told the Guardian the party has “absolutely nothing to hide”. Davidson, a prominent businessman and partner of the party’s leader, Anna Soubry, said the party retained “a full list of donors” and had been “fully compliant” with the Electoral Commission’s rules on vetting and recording donations. The Independent Group for Change, established as a limited company by Labour MPs in 2019, is being wound up after a turbulent year that concluded with the loss of all its remaining MPs at the general election in December. Accounts show the party received £1.6m in donations during its brief existence. The majority of the donations fell below the reportable threshold of £7,500, meaning the party was not required to disclose the donations to the Electoral Commission. The party, which underwent multiple changes to its name and logo throughout 2019, spent £780,000, almost half of its money, on campaign advertising, according to the accounts. The party’s auditors, Cox Costello & Horne, signed off on the accounts earlier this month with a qualified opinion, an option available to auditors when they are unable to obtain sufficient audit evidence. The auditors said nothing had come to their attention that suggested there were any “material errors in the financial statements”. However, as a result of the destruction of documents, the auditors were “unable to determine” whether any adjustments to financial statements “might have been found to be necessary had the scope of our work not been limited”. According to the report, the documents were destroyed “during the winding down of operations”, but Davidson said this related to actions taken by former members of staff between June and July last year. Party staff, he said, “deleted certain email accounts which contained information on donors”. He said he believed they destroyed the information for data protection reasons. Asked about the loss of bank statements, Davidson said the party “was able to produce all the downloads of the transactions” to the auditors. The former Labour MP Mike Gapes, a co-director of the company, said he had “no knowledge” of the destruction of the documents. “Everything was done appropriately,” he added, “but it’s unfortunate that things could not be found.”