POLICE have confirmed they are investigating issues with Northumberland County Council's development company, Arch, uncovered during an ongoing review.

The organisation has been subject to an internal strategic review for the last five months, which was ordered when Northumberland Conservatives became the largest party on the council following the local elections in May.

Leader, Belsay's Coun. Peter Jackson, made scrapping the company a key priority in the party's manifesto and has previously branded Arch "a highly dubious operation".

But Coun. Jackson, who is also now an Arch board member due to his position on the council, said the firm's core business operations would continue while the review took place.

This week Northumbria Police confirmed that officers had been called in to investigate "finance and governance issues".

It follows speculation in August that two senior employees at Arch has been suspended amid the ongoing council probe.

Arch was established by the council in 2012 and manages a £300m portfolio of commercial and residential properties, including the Tyne Valley Retail Park, in Hexham.

The company said it has supported the creation of more than 500 jobs and attracted more than £90m of private sector investment across the county.

A spokeswoman for Northumbria Police said: "Police are working with Northumberland County Council concerning a number of matters relating to Arch. Inquiries are in their early stages. The matters relate to finance and governance issues."

A council spokeswoman added: "Northumberland County Council has passed information to the police but is unable to comment further."