Broke Staveley Town Council seeks bail out to prevent tax hike and job losses

Chesterfield Borough Council (CBC) is considering loaning the bankrupt authority the cash it needs to keep going, after it admitted being in the red by more than £400k and unable to pay its own staff.

In a statement released by CBC, Labour leader Councillor Tricia Gilby was scathing of the Independent-run town council, commenting: “It is totally unacceptable that at a time when the residents and businesses of Staveley need the support of their local councils more than ever that Staveley Town Council is financially broke.

“Staveley households pay their hard-earned money in good faith to fund Staveley Town Council (through their Council Tax) and have a right to expect their council to prudently spend that money on facilities and services from which they can benefit.

“The current administration has been in place for four years and there is clear independent evidence for all to see of failures in internal systems of financial management and control during this time.”

Independent STC Leader Councillor Paul Mann commented: “Staveley Town Council technically has been on the brink of bankruptcy for a decade.”

He explained that he had been leader of the council in 2010/11 for the Liberal Democrats, when they had decided to launch the Heart of Staveley project to regenerate the Grade II listed Staveley Hall, which was in a dilapidated state.

Coun Mann said it ran into some difficulties at that point, and claimed in the years after he left the authority the project went over budget by £1million.

Councillor Paul Jacobs, who leads the Lib Dem group at STC, said in both in 2011 and 2015 Labour won 17 out of 17 seats at the authority.

He commented: “The council between 2011-2019 borrowed £1million, spent nearly half a million pounds on legal fees and costs, started two loss-making businesses and failed to create any reserves, despite repeated annual auditor’s reports pointing out that this was an urgent problem.

“By Jan-March 2019 the council had no money and was unable to pay all its bills, including some staff costs, just as is the case now.”

However Labour member Councillor Christine Ludlow, who was STC leader in 2019, described the statements as ‘smoke and mirrors’ on the part of the opposition.

She said the Labour group inherited the Heart of Staveley project when it took over from the Liberal Democrats 2011, which had already hit problems because no separate bank account had been set up for it, meaning all grant funding for the regeneration was being mixed up with the regular STC accounts.

“It was just absolutely chaotic when we came into control in 2011,” Coun Ludlow stated.

“We tried to stop the project, we knew Staveley couldn’t afford it, but it was too late, we couldn’t pull out of it.

“We had to try and work it as best we could and we opened a separate bank account.”

She argued the project did not go over budget by £1million, as claimed by her opponents, as a public works loan had always been factored into the restoration plan, although she admitted this increased from around £500k to £900k to make up, in part, for some EU funding that fell through.

When the Independent group came into power in 2019 the council had no reserves, which Coun Ludlow explained had been spent on legal fees over separate staffing matters.

Despite this, she claimed the budget was balanced and even though things were ‘tight’ they were still managing to pay their bills and staff wages.

To the contrary, Coun Mann said after he took over unpaid bills kept coming to light and the authority’s deficit kept increasing, with no money in its reserves to ease the pressure.

The council came up with a plan of action to get it back on track and create a reserve of £45k, but when Covid hit that went out the window.

“We lost £100k in uncontrollable income, we had to give deposits back for weddings, we were losing money hand over feet, but no support and no reserves,” Coun Mann said.

While county, district and borough councils received money from the Government to cope with the financial hardship caused by the pandemic, parish and town councils got nothing.

He said he appealed to CBC for funding, but the neighbouring authority declined at the time.

After that, STC came up with a financial plan that it hoped would pull it out of debt, however its recovery from Covid was slower than anticipated and the plan proved insufficient to make a dent in the problem.

Coun Jacobs commented: “In February 2022 budget papers showed the council would be in financial balance by March 2023 with a small reserve of £15k.

“A new town clerk from Autumn 2022 however quickly presented councillors with financial reports that showed that this was inaccurate.

“There were no reserves, the café, wedding venue and the Speedwell Rooms continued to make large losses, staff costs had increased not decreased and the financial gap was bigger than ever rather than reducing.”

Coun Mann stated that without financial intervention from CBC now, STC will have to make 15 or more people redundant and raise its Council Tax precept by at least 39 per cent, which he would be loath to do.

Coun Jacobs stated the Lib Dems will not support a ‘huge increase’ in Council Tax however, commenting: “The council has to live within its means and cut back its loss-making ventures.

“Not take yet more money from Staveley residents.”

Coun Ludlow commented: “For the leadership of Staveley Town Council, to blame a previous administration, who left office almost four years ago, is an abject denial of their own responsibility.

“And their suggestion that the current Independent/ Lib Dem administration is not only blameless but is actually a part of the solution to this crisis is an insult to the people whose jobs are under threat and the thousands of Staveley people who will fear a big Council Tax increase to clear up this mess.”

CBC stressed it has no legal responsibility for STC and it is already among the town council’s creditors. While it has no powers to directly intervene in its finances, is willing to help out under strict conditions.

“We will need to set out clear and robust rules of engagement to ensure that any taxpayers’ money we choose to make available is directed in an appropriate and financially responsible way,” Coun Gilby outlined.

Both Coun Mann and Coun Ludlow are calling for a full independent investigation into the town council’s finances.