A high-profile councillor has explained how a Derbyshire parish council has ended-up facing possible bankruptcy after it struggled to keep a leisure centre scheme afloat during the Covid-19 crisis which saw a contractor go bust and costs triple.
Elmton-with-Creswell Parish Council has recently shared an expert Locum’s damning interim report on its website into the authority’s serious financial situation and statutory non-compliance and governance issues with a long list of recommendations aimed at rectifying its plight and averting insolvency.
The parish council stated it is taking transparent, decisive action to avoid insolvency and Bolsover district and Elmton-with-Creswell parish councillor Duncan McGregor has told how he believes it was the Covid-19 pandemic that threw the parish council and its scheme for the Creswell Heritage and Wellbeing Centre, on Colliery Road, into a massive, costly and crippling financial crisis.
Cllr McGregor said: “The thing that did it was Covid. The contractor Woodhead’s went bust like others during Covid. It was £3 for a bag of concrete but that suddenly trebled in price even if you could get hold of it and the overall cost escalated.”
Residents had originally been disappointed when Bolsover District Council had decided to close the old Creswell swimming baths, according to Cllr McGregor, because the old 1920s building had been suffering long-term, metal structural and damp course damage in the roof from the effects of the water.
However, Cllr McGregor explained a survey showed that people subsequently welcomed the idea of a new leisure centre and agencies pulled together and the project for the Creswell Heritage and Wellbeing Centre was originally funded through Bolsover District Council, Elmton-with-Creswell Parish Council, Derbyshire County Council, Viridor, and the Big Local and Bolsover Partnership.
Cllr McGregor added: “We had an organisation called The Big Local and our community – would you believe – got £1m from The Big Local, a national body which went into deprived areas and they selected to get the £1m for our community over a ten-year project.”
And after the project secured more funding, contractors Woodhead Construction won the tender for the work but they fell into administration in 2022 as they faced increasing costs and demands from the impact of the Covid-19 pandemic and Bolsover District Council’s company Dragonfly had to step in and finish the development.
Elmton-with-Creswell Parish Council subsequently had to borrow £2m from the Public Works Loan Board to ensure the project would be completed but the centre which opened in 2023 has also been running at a loss during a continued difficult economic climate and a cost of living crisis, and the parish council has struggled with running and equipment costs, wages and bills.
Cllr McGregor said: “The parish council took a decision to complete it for the community. It is important that the public understands the story that £2m had to be borrowed from the Government Public Works Loan Board to complete the deal.”
He added that the parish council could not have sold the centre during the Covid-19 crisis even if it had wanted to, and it could not consider a sale anyway because all those who had contributed funding towards the project had done so on the condition that the scheme was to be a community-run building.
Elmton-with-Creswell Parish Council, which also owes money to Bolsover District Council due to the situation, immediately began addressing how best to deal with the financial strain and it even looked at setting up a Trustee Board in an effort to oversee the centre.
The expert Locum’s report, however, stated that by December, 2024, the parish council had incurred a deficit of minus £216,255.53 and the report warned if immediate action is not taken the council will become bankrupt and risks defaulting on the PWLB loans.
Elmton-with-Creswell Parish Council also owes about £230,862.32 to Bolsover District Council of which £106,288.71 is owed immediately as a loan taken out by the council, according to the report, and £124,573.61 is owed in previously unpaid bills from the early part of the current decade.
The report stated in December the parish council possessed £33,249.94 in one bank account and £327,817.50 in another and if it paid the district council all the money that it is owed, the parish council would be left with just £96,955.18 for its functions, liabilities, staff and other debts for the rest of the year.
If the parish council becomes insolvent it would default on the original loans it owes to the Government for the construction of the leisure centre which were obtained via the PWLB for an original overall sum of over £3m resulting in the PWLB most likely calling in its debt immediately, according to the report.
The parish council has stressed it is now taking immediate and decisive action to address these financial matters and restore the council’s financial health and it has offered reassurances that it is committed to ensuring the highest levels of financial stability, accountability, and transparency.
Recommendations in the Locum’s report for the parish council include ceasing all non-essential spending, authorising a financial officer, authorising a clerk to meet with Bolsover District Council to negotiate its debt and to seek documents from current and former councillors and officers, as well as becoming a signatory and representative to the council’s bank accounts to repay the loan to Bolsover District Council.
Others include implementing a review of all policies to ensure compliance, that the council refers itself to the Information Commissioner’s Office concerning any FOI matters, that the parish council ceases disciplinary action against any councillors and that any complaints should be referred to a monitoring officer, and that the clerk be authorised to extend the Locum’s contract.
The council stated it will collaborate with financial experts and external auditors to review and strengthen its financial systems and its priority is to take swift corrective actions and establish a sustainable financial framework.
Elmton-with-Creswell Parish Council added that it is fully committed to restoring confidence and securing a solid financial foundation for its residents.
Cllr McGregor has also said he is confident the leisure centre scheme will eventually prove to be a valuable community asset and it will be supported by the prospect of two large housing developments in Creswell.
The district and parish councillor has recently announced his pending retirement as Bolsover District Council’s Deputy Leader and he has served as chairperson at Elmton-with-Creswell Parish Council but he is continuing in his roles as district and parish councillor.
