Councillor claims tax payers could ‘foot the bill’ after construction firm goes bust leaving hundreds of North Derbyshire homes to build

The shock announcement last week (September 15) by Robert Woodhead Ltd, the construction arm of the wider Woodhead Group, that it was ceasing trading sent shock waves through North East Derbyshire District Council (NEDDC), Bolsover District Council and Chesterfield Borough Council, which between them had planned to build around 600 homes with the firm.

But the leader of North East Derbyshire Liberal Democrat group, Councillor Ross Shipman, claims NEDDC could have avoided the situation if it had listened to concerns voiced by his party members back in 2018 about going into business with a ‘small builder’, which was more at risk of going bust.

“I’m just sorry that nobody listened at the time,” he said.

“Now we’re not just talking about a failed project, we’re talking about companies going under, potentially hundreds of jobs being lost and the council need to stand up and give us some transparency.”

NEDDC set up the Northwood Group Ltd joint venture company with Woodhead Regeneration Ltd, a separate company within the Woodhead Group, to work on the Oak Fields development of nearly 200 homes, in Ankerbold Road, Tupton.

The authority took a loan out secured against the land, which it already owned, and in turn gave a loan to Northwood to go towards the cost of construction.

The loan amount was never publicly disclosed, however at the time in 2018 the Lib Dem group reported on its website that it was £7.7million – a figure that NEDDC would neither confirm nor deny when approached by the Local Democracy Reporting Service.

Coun Shipman continued: “This is public interest and it’s public money.

“The council is still going to have to pay off the loan and if it does for whatever reason go bust then it’s going to be taxpayers footing the bill.”

A spokesperson for NEDDC said: “As previously stated, the future of Northwood is not directly affected by the collapse of Robert Woodhead Ltd.

“And in any case, from the outset of the joint venture, any potential risks were heavily mitigated against with assets being used as security on the loan, thereby minimising any risk to the tax payer.

“Northwood does not owe any company money and paid all Robert Woodhead invoices in full, on time.”

Chesterfield Borough Council partnered with the construction firm to build its flagship Northern Gateway Enterprise Centre, which opened earlier this year.

A spokesperson for the authority said: “Robert Woodhead Ltd were one of several contractors used by the council to deliver construction projects across the borough.

“There is only one outstanding contract with the company, to deliver ten new homes in Middlecroft.

“The council is still seeking to understand the full implications of the current contractual position with Robert Woodhead Ltd.”

Bolsover District Council had contracted the construction firm to build up to 400 properties as part of its Bolsover Homes project.

The authority announced it had ‘taken charge’ of the scheme as soon as it heard the company had gone under and is currently looking for contractors to finish what Woodhead had started.