Middlewich Town Council facing financial crisis

Deputy mayor Laura Turner told this week’s meeting of the full council, a £10,000 deficit had been anticipated but the council’s financial planning had been scuppered by an £84,000 loss made by the Middlewich Folk And Boat Festival.

“We’re now forecasting a £100,000 deficit within this year,” Cllr Turner told Monday night’s meeting.

Cllr Laura Turner (Image: Middlewich Town Council) (Image: Supplied)

“With all the revisions that we’ve made, we’ve saved some money, we’ve also generated some money, but it’s £90,000 out.

“We currently have contingencies of £178,000. If you take off the hit that we’re going to take this year, we only have £78,000 in reserves. To keep this council running, operational, for three months it will cost us £73,000, so we are on the cusp of being illegal.”

Last month (August 5) the council held an extraordinary council meeting to discuss the folk and boat festival losses.

At the beginning of this month’s meeting, (Monday, September 5) recently appointed town mayor Colin Coules listed a number of financial liabilities he said the council had become aware of.

Among these were an £80,000 pension liability that dates back to 2007; a £50,000 council tax debt for alms houses stretching back to 2017; £8,000 worth of electrical work; £8,000 worth of repairs to the emergency lighting system and £5,500 for roof repairs.

Cllr Colin Coules (Image: Middlewich Town Council) (Image: Middlewich Town Council)

Cllr Coules said: “We’ve also got an exposure for an uncapped amount of money for legal fees to settle the cemetery dispute. £15,000 has been spent so far, that could rise.”

He added: “If we add all these things together, it amounts to £260,000 of expenditure that we just have no provision for.”

One resident asked at what stage the council would have to declare bankruptcy and whether there were reserves to cover that amount.

Cllr Coules replied: “We’re not at that stage. There are reserves. It’s not affecting our day to day cash flow.”

When questions were asked about how this could have happened,  Cllr Coules said: “These issues go back such a long time and my report was very clear - they are historical issues.

“We are sailing very close to our legal requirement reserves. We are sailing very close to the limit on that. We couldn’t afford another surprise.”

He added: “We could spend a lot of time going back over the years saying why did this happen, why did that happen, who’s responsible for this, who’s responsible for that.

“There are things there that should have been dealt with… but we’re not in a blame situation here.

“What we’re trying to do is expose it and put a plan together, but you’re quite right on the pensions, it goes back to 2007.”

The town council has now put forward a three-year budget proposal which is due to be voted on at its next meeting.

Cllr Carol Bulman told the meeting when the Labour administration took over in 2019 ‘we inherited an incredible mess’.

Because not all responses could be heard clearly at the meeting, the Local Democracy Reporting Service has since asked councillors Carol Bulman and David Williams, who attended the meeting, for a statement.

In the statement Cllr Bulman said the pension issue had come to light recently and, as soon as the Labour administration was made aware ‘we immediately assured the employees that any shortfall in their pensions would be honoured by us and steps were taken to calculate what was owed to them’.

Cllr Carol Bulman (Image: Cheshire East Council)

“Labour did not control the council until 2019 so this poor decision was taken well before our time,” said Cllr Bulman.

“We were dealing with it, waiting for the figures. We found out at the council meeting, along with everyone else, the exact sum.

“Personnel matters are always in Part Two [where the press and public are excluded] for obvious reasons and I was amazed that it was raised in the main meeting. Employees have a right to discretion regarding their financial affairs.”

She added: “Labour have always been as transparent as possible.  We announced the AGAR (Annual Governance and Accountability Return) issues that we inherited and the problems re the cemetery.

“The matter had nothing to do with us. We have nothing to gain from hiding the mistakes of previous administrations.  Once something can go into the public domain, it is included in the council papers and presented to the public at council meetings.”

Cllr Williams said: “I was surprised that the council chair chose to make a verbal statement when, as far as I’m aware, the folk and boat festival accounts are still with the auditors, we haven’t received an actuarial report on the pension issue and the council has not decided to take responsibility for the alms houses, placing liabilities on council tax payers.”