Eleventh-hour Chesterfield cash bail out saves Staveley Town Council from bankrupcy
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In a heated meeting, Chesterfield Borough Council (CBC) begrudgingly agreed to help pull the authority from the brink of bankruptcy by loaning it £400,000, which will be secured against one or more of its assets.
The Local Democracy Reporting Service (LDRS) previously reported Independent Staveley Town Council (STC) Leader Councillor Paul Mann’s claim that CBC was interested in acquiring the Speedwell Rooms for housing, however the borough council would not confirm this when asked.
Speaking in the full council meeting, CBC Leader Councillor Tricia Gilby questioned why STC, unlike neighbouring councils, had not applied for Government grant funding, which she claimed could have been worth up to £144k for the cash-strapped authority.
“Some would say it’s because you’re incompetent,” the Labour leader commented, adding that she would personally look into whether the funding was still accessible.
Coun Mann responded by outlining the financial position he had inherited from the previous Labour leaders of STC when he took over 2019, stating there were no reserves and extensive debts already. “If I’m incompetent leader, so is your party,” he concluded.
Two weeks ago STC members outvoted the leader and deputy leader and agreed to close the coffee shop at Staveley Hall, and the LDRS was on the scene when workers found out they were being made redundant, some of whom still hadn’t been paid in full.
In the meeting last night it was revealed STC had been taking tax and pension payments from wages, but failing to pass them over to HMRC and the Derbyshire Pension Fund in due course.
Councillor Ian Callan, a retired HMRC officer, said: “In a nutshell it seems that the employees have had taxes deducted which have not been paid to HMRC, as well as affecting their pensions etc.”
He commented that if he had still worked for the tax office he believed the town council would have warranted a serious review.
Coun Gilby commented that the total owed to staff, HMRC, Derbyshire Pension Fund, the Government, CBC and multiple other creditors was £570k.
She said 80 per cent of Staveley communities fall within the most deprived in England and it was ‘deeply concerning’ that the town council had gone bust at a time when households needed it most.
“If STC staff are to be paid and the unlawful deductions taken from their wages forwarded to HMRC and Derbyshire Pension Fund, if local companies employing local people are to be paid for the services and the supplies they have provided in good faith to STC, and if STC business tenants are to remain at Staveley Hall and if Staveley households are to receive any level of service from STC then the only real option is the financial package set out in this report before you,” she stated.
Members approved the financial rescue package subject to strict conditions to ensure the long term viability of the council.
CBC plans to work with STC to appoint external independent associates to investigate the causes of its financial difficulties and help develop an improvement programme.