Staveley councillors urged to work together after damning report into debt-troubled council

Chesterfield Borough Council was forced to help out in February, 2023, with a £400,000 loan agreement to save Staveley Town Council from bankruptcy and the two authorities have since worked with the Local Government Association and National Association of Local Councils to appoint an investigative Improvement Board to establish the causes of the financial insolvency.

A board spokesperson stated: “One fact needs to be made clear, the problems faced by the council is not due to a set of issues faced by one administration, it is a composite set of events over a number of years.”

The board outlined that problems had arisen since the Labour administration from 2011/12 until 2018/19, and since the Community Independents’ administration from 2019/20 who had no support from the Liberal Democrats.

Independent Staveley Town Cllr Paul Mann previously stated when he became leader in 2019 he had no idea of the severity of the council’s debt, and he held the previous controlling Labour group largely responsible, and the Liberal Democrat Cllr Paul Jacobs held Labour and the Independents responsible.

And the Labour Group, which narrowly took control at the council after the May, 2023 elections, had blamed careless overspending by Cllr Mann and the Independent group for the situation.

However, the report stressed that the cause of the most recently, narrowly Labour-led Staveley Town Council’s financial plight was due to a number of events between 2011 and 2022 which were not just faced by one political group’s administration.

The 2011/12 to 2019/20 administration oversaw a number of costly problems including HR issues, cost overspend, lost income, and lost grant opportunities which led to a structurally financially imbalanced council by the time of the 2019/20 election and subsequent insufficient action led to the authority’s financial failure.

The board stated that the financial situation was of Staveley’s own making over many years and that of the administrations’ but it has urged that everyone now needs to come together to take the council forward.

Staveley Town Council’s long standing financial matters came to a head in late 2022 when the incoming clerk reported that the council’s bank balance was insufficient to discharge its obligations with a reported deficit of £263,000 at that time when the final accounts for 2021/22 were completed.

What occurred in 2021/22 was therefore an accumulation of issues going back many years which together cumulatively degraded the council’s financial position, according to the report.

The report stated that the impact of Covid-19 on the council’s income from March 2020 was the tipping point, but the circumstances had been in place for many years.

Investigators found that members did little or nothing to either preserve, or build up, the council’s reserves despite advice and warnings from its auditors to do so over the 12 year period that has been reviewed.

The council’s Reserves by March 31, 2015, were also critically low which meant the authority was struggling to meet its immediate costs and in September, 2019, a reduction in reserves over 15 years was also recorded due to cost pressures from matters including the cost of refurbishing Staveley Hall and The Stables and the use of reserves to support the council’s revenue account, legal fees and employment issues.

There was also a disruptive big turnover of town clerks with six being employed since 2010/11.

In addition, there was also a fraud loss suffered by the council in 2015/16 as the council’s internal controls had been disabled, according to the report.

By November 2014, auditors identified governance issues including sundry spending records not being kept up to date, confused record keeping, payments not supported by invoices, no risk management arrangements and incorrect payroll function.

And by the time of the May 2019 elections the council was forced to make drastic budget reductions with the closure of a High Street office, reducing maintenance costs for Speedwell and Staveley Hall, a reduction in caretaker staff, restructuring after concluding the Hall manager’s position, as well as making cuts right across other budget areas.

By 2021 the report stated that the council had been operating with no or little reserves since 2012 and members took insufficient action to rectify this situation.

There was further instability after one clerk’s two-year ill health absence over a decade ago and the financial instability continued until the latest clerk highlighted and discussed Staveley Town Council’s perilous position.

The Annual Governance and Accountability Returns for 2018/19 showed a 45.6per cent reduction in receipts to the council while staff costs increased by 35per cent.

In addition, the report stated that councillors have struggled to work well together and there has been an atmosphere of antagonism and complaints and they have been urged to apply selflessness, integrity, objectivity, accountability, openness, honesty and leadership.

The new clerk has since introduced a new financial system and has shown a good grasp of the council’s organisation, according to the report, and the authority has since reduced expenditure and councillors are being urged to stick to the new financial framework.

Staveley Town Council’s budget is now balanced, according to the report, and there is a clear understanding of the long term commitments Staveley has to manage.

An £803,450 figure is owed to the Public Works Loans Board which is to be repaid over a period of up to 50 years and a £398,900 figure is owed to Chesterfield Borough Council to be repaid within the next 5 years, according to the report.

These loans do not reduce the amount the council needs to raise or solve its budget deficit, according to the report, it just allows members to spread its financial commitments over future years.

The Improvement Board which launched an investigation into the financial situation at the town council has now offered advice and has been monitoring the development and implementation of an Improvement Plan for the council.

Its key objectives were to: Determine the causes of the council’s financial insolvency; Examine the council’s accounts up to the end of the 2022-23 financial year; Assess the council’s governance arrangements and make recommendations for improvements; Provide advice to the council; Support the development and implementation of programmes focused on improving operations; And monitor the council’s continued delivery of programmes and make further recommendations.

As part of the Board’s recommendations for Staveley Town Council it urged that it needs to introduce a training programme for members who need to work together and seek to build some stronger relationships with Chesterfield Borough Council, the County Council, Derbyshire Association of Local Councils, and plan a proposal to sign up to the national Civility and Respect Pledge.

The board spokesperson stated: “Members have a lot to do to re-establish organisational credibility and confidence in the town council.

“This will be a long term project and doing the basics right should be the overriding aim of all decisions and actions until the council’s loans are repaid and members have sufficient financial capacity to embark on any other community projects they want to achieve for their residents.”

The board stressed that a good, experienced current clerk is now in place at the council and the council is now working towards Peer Reviewed Accreditation to demonstrate good governance, policies and procedures.

A board spokesperson added: “The board was impressed by the initiatives members wanted to do for their communities, whether through their own efforts, sponsorship or through their community contacts. This is very much to members’ credit and is the creative approach to still fulfil what people enjoy, but without draining any further Council funds.”

The board has made a series of recommendations for the council including: Regaining public trust and confidence; Having a more consensual and transparent approach to governance; Using a member-officer behaviour protocol; Showing a commitment to peer reviewed accreditation; Demonstrating that good governance, policies and procedures are in place; And it should sign up to the national Civility and Respect Pledge; And demonstrate an ability to deliver value for money services.

Some of the actions are already in progress and will be reported back on as part of a plan which the council formally adopted at the town council meeting on November 28, to demonstrate good governance, better engagement with the community, improved management and development of staff and councillors.

The investigation costs are to be covered by the town council, the LGA and Chesterfield Borough Council.

Labour Group Leader Cllr Barry Dyke said: “I would like to thank the Improvement board for their thorough report and for the courtesy they showed to all those who they interviewed.

“I support their recommendations and conclusions and on behalf of the Labour group on Staveley Town Council resolve to do all we can to improve the way in which political matters are debated and work alongside anyone who has the best interests of Staveley at heart.”

He added: “The Labour group accept this report and its findings in full and resolve to adopt the recommendations at the earliest possible opportunity. It is important that everyone takes responsibility for the findings and resolves to join us in working in the best interests of Staveley.”

Councillor Tricia Gilby, Leader of Chesterfield Borough Council, said: “We welcome the Improvement Board’s report, which provides a clear and independent view of the reasons behind Staveley Town Council’s insolvency and a sound roadmap for Staveley Town Council to follow as the basis for building a more positive future for Staveley and its communities.

She added: “We believe Staveley has a very bright future, a place of opportunity where people of all ages are inspired to work and lead happy and healthy lives.

“For Staveley Town Council to play its part in the area’s regeneration, it must first regain the trust and confidence of those it serves. The Improvement Board’s report and recommendations give Staveley Town Council that lifeline, but it is a lifeline that must be grasped and grasped quickly.”

Chesterfield MP Toby Perkins said: “The report is an excellent piece of work and I thank the improvement board for conducting this independent inquiry in such a diligent fashion.

“Their recommendations are sensible, and they are right to highlight that alongside vastly improved governance and financial management, the tenor of debates on Staveley Town Council must improve for the authority to start operating more effectively.”

He added: “None of the council’s leadership over that time emerges from this report with credit, and whilst it has always been my view that these failings were more due to incompetence than any ill will, it is important that all involved in Staveley Town Council accept the strictures about moving away from finger pointing, and instead accept their part in these failures and resolve to work together in the interest of the people of Staveley.”

Staveley Town Council’s political make-up at the time of the investigation was six Labour councillors, five Liberal Democrats, five Community Independents: and one independent after the May 2023 elections.

However, Labour Staveley Town Councillor Debbie Wheeldon has recently resigned her seat and a by-election is expected soon for the vacant Duckmanton ward.