Council's building company 'a threat' to finances

The company, owned by Bolsover District Council, was set up to deliver housing and infrastructure projects across the district, including these bungalows in Oak Vale

The company in charge of a Derbyshire council's major housing and infrastructure projects could be dissolved, after a report said it could "pose a threat" to the authority.

Local Partnerships, a government-funded consultancy, said the company, called Dragonfly, had put Bolsover District Council's governance and finances "at risk" and questioned whether it was delivering value for money.

Dragonfly, which is made up of two companies owned by the council, defended its record and said the its "inspirational" creation had saved the council from "huge financial losses".

The council will hold a meeting in July to decide whether to dissolve the company.

The report covers the activities of both council-owned companies - Dragonfly Management Ltd, which provides property services, consultancy and house repairs, and Dragonfly Development Ltd, which runs property development, including the council's social housing programme.

The companies were set up more than two years ago under the leadership of the previous council leader, Steve Fritchley, after the collapse of a previous contractor.

But the council then raised concerns Dragonfly might not be providing value for money and might be creating unacceptable conflicts of interest.

It then commissioned the review, which has now identified "several significant issues", including a dysfunctional working relationship which led to "a lack of trust" and resulted in information not being shared between Dragonfly and the council.

Dragonfly board members when work began on Shirebrook crematorium, including the former leader of the council Steve Fritchley (holding the spade), and chief executive Grant Galloway (centre), which has been delayed and understood to be overbudget

The report added the issues found during the review were potentially significant enough "to pose a threat to the council in terms of governance, finance and reputation".

It recommended the council should revisit the business case to decide whether the companies should continue to exist.

And it said that the board of Dragonfly, mostly made up of elected councillors in the district, should "immediately" be dissolved and replaced.

A new £9.6m crematorium being built by Dragonfly Development was due to be be completed in the spring of this year, but has now been delayed.

The BBC also understands the company has asked the council for further funding due to extra costs incurred from a nine-month slowdown in work.

'Political move'

The Dragonfly companies said they were "disappointed" by the findings of the report and claimed it contained "factual inaccuracies", but did not specify which issues were thought to be inaccurate.

A spokesperson said: "We have completed or are currently on site and on target to complete each and every housing project for [the council] to an excellent standard and within agreed timescales."

Dragonfly said it had been "clear from the outset" that senior council officials wanted to close down the companies.

It has also warned their closure would "incur unnecessary expense to the taxpaying residents of Bolsover."

Dragonfly added: "We firmly believe this is a political move now that all Board Directors are no longer members of the Labour Party."

The leader of Bolsover Conservatives Will Fletcher called on the council to act "swiftly" on the report's concerns.

"It's also vital that they urgently review all of Dragonfly's live projects, including the Shirebrook Crematorium, in order to ensure that these projects can be delivered within their agreed budgets and will provide value for money," he told the BBC.

The leader of Bolsover District Council, Jane Yates, said she saw the report as "an opportunity to review all options" for the future of Dragonfly.

"I want to reassure people that the projects currently being undertaken by the Dragonfly companies will continue as planned", she said.

She rejected accusations from Dragonfly that the review was "political".