Chesterfield Borough Council has agreed to provide a £400,000 loan to Staveley Town Council to enable the bankrupt council to clear its debts and return to a position of solvency.
This is the headline announcement from the financial rescue package that Chesterfield Borough Council has developed for Staveley Town Council which sets out clear and robust rules to ensure that taxpayers’ money is directed in an appropriate and financially responsible way.
Staveley Town Council’s financial difficulties are substantial. When added together Staveley Town Council owes its staff, His Majesty’s Revenues and Customs, Derbyshire Pension Fund, the Government, Chesterfield Borough Council, and multiple other creditors a total of £570,000.
On 13 January Staveley Town Council had just £322 in its bank account. Staveley Town Council isn’t therefore in a position to fulfil any of the roles expected of parish councils as the level of government closest to communities.
Councillor Tricia Gilby, Leader of Chesterfield Borough Council, said: “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.”
Staveley households pay an additional amount of council tax to most Chesterfield households. A Band A household currently pays an additional £67.69 per annum and a Band D household an additional £101.53 per annum for the services that Staveley Town Council provides.
By way of comparison a Band A household pays £119.93 and a Band D household £179.89 to Chesterfield Borough Council for the fifty plus services that it provides to the borough’s households, including Staveley’s households.
Councillor Gilby continued: “As the principal authority for the area, Chesterfield Borough Council has a responsibility to look after all of the borough’s residents and businesses.
“Without the benefit of Chesterfield Borough Council’s financial rescue package, the only option available to Staveley Town Council to raise the funds they need to settle their debts and deliver some services to Staveley households would be to increase their precept by 78% for the financial year 2023/24. This would mean an increase of £52.83 per annum for a Band A household and £79.25 for a Band D household.
“This would be totally unacceptable given the current economic climate and cost of living challenges faced by Staveley households. They deserve better.”
“It is also the case that Staveley Town Council’s staff need to be paid, as do local companies employing local people for the services and supplies they have provided in good faith to Staveley Town Council.”
It is proposed that the £400,000 loan, which will also need to be signed off by the Government, is repaid over a five-year term. With interest charged on the loan at 4.4%, the annual loan repayment will amount to approx. £90,000 per annum. Staveley Town Council will be required to make the loan repayments in two instalments per annum with the first loan repayment due in September 2023.
It is also proposed to secure Chesterfield Borough Council’s loan against one or more of Staveley Town Council’s assets.
Whilst Staveley Town Council’s current administration has been in place for four years and there is clear independent evidence of failures in internal systems of financial management and control during this time, it is Chesterfield Borough Council’s intention to work with Staveley Town Council to appoint external independent associates to investigate the causes of Staveley Town Council’s current financial difficulties and help develop an Improvement Programme.
Councillor Gilby, however, remains confident about Staveley’s future: “Chesterfield Borough Council is working hard to bring fresh investment to the Staveley area. Over the next 15 years, the Staveley area will see investment totalling over £1bn with the promise of 3,500 new homes, 2,200 new jobs and a very much improved environment centred around the Chesterfield canal. The £25.2m Staveley Town Deal will also help catalyse Staveley’s future ‘as a place to start, a place to stay, and a place to grow’.”
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