Paul Jacobs On Staveley Town Council's Financial Fiasco

5 Feb 2023
Paul Jacobs

The MP for Chesterfield is correct when he says that Staveley Town Council seems to be effectively bankrupt and unable to currently pay some of its bills. The Town Council, like every Council in the UK, can point to the unexpected shock over the last year of record inflation, soaring energy costs and the slow recovery of revenue following Covid and lockdown. However, that doesn't explain why STC is in such a particularly bad state. All Councils are supposed to have cash Reserves to help them deal with unexpected crises of this kind. But Staveley has none, why not?

A public report that went to a STC meeting in Feb 2022 outlined where much of the problem began. 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 Auditors 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. A new Council was elected in May 2019 and inherited all these dire financial problems. In 2011 and 2015 Labour had won 17 out of 17 Town Council seats. In May 2019 the results were 8 Independents, 6 Labour and 3 Liberal Democrats. The new, Independent run Council, fairly quickly had to borrow another £75,000 to help it meet the immediate financial problems it had inherited. The 3 Lib Dem Cllrs made it clear in 2019 that they would not support any proposal that did not have clearly identified funds available to pay for it and that the Council should reduce its costs and build up some Reserves.

Slow progress seemed to be being made and in Nov 2021 the Internal Auditors Report for 2020/21 was presented to Cllrs and said "The Budgeted savings have had an effect as the Town Council was not in deficit at the financial year end. Plans are in progress to bring about a return to effective Reserves." In Feb 2022 Budget papers showed the Council would be in financial balance by March 2023 with a small Reserve of £15,000. A new Town Clerk from Autumn 2022 however quickly presented Cllrs 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. In January 2023, during a lengthy discussion that was going nowhere, Lib Dem Cllrs proposed and seconded a Motion adopting one of the proposed options being discussed. All 6 Labour Cllrs and 3 of the Independents joined the 3 Lib Dem Cllrs in voting that through with a large majority. For the first time in over a decade STC has accepted reality and taken the very difficult decision needed to deal with it. Some very hard choices have to be made to avoid the outright closure of the Council. One action Lib Dem Cllrs will not support is a huge increase in Council Tax. The Council has to live within its means and cut back its loss-making ventures. Not take yet more money from Staveley residents.

Cllr Paul Jacobs,

Lib Dem Group Leader, Staveley Town Council