On 31 May 2024, Derby City Council issued a statement confirming that it had received an invoice from Derbyshire County Council for £93.9m to “recover its share of the costs of the (Sinfin Incinerator) project”. Derby City Council disputes the validity of the invoice and has formalised that position with County.

There is no evidence that this invoice has any contractual validity.

This issue was highlighted by Derby News in the the 5 May 2024 article:

Derbyshire County Council blocks disclosure of “commercial” Sinfin Incinerator project charges made to Derby City Council

As opined in this article:

“County needs to convince itself, and its auditors that capitalising the termination contract payment is correct and that the charges made by itself to Derby City Council are “legitimate”. If it can’t, then it raises questions over its financial future and the way the Council has been managed”.

Derbyshire County Council is in a desperate situation, financially.

Derby City Council has always reported that it has followed existing due process by signing the Inter-Authority Agreement 3, which County hasn’t, and by continuing with the soft market testing to find a new contractor who can complete and run the Incinerator plant.

The declared political policy of Cllr Shanker (Leader of Derby City Council – Labour) is that he/Labour Group does not wish to see the plant open.

On 1 June 2024, Derbyshire Live reported that the 4 Derby City Council Opposition Leaders:

“…Conservative (Steve Hassall), Reform Derby (Tim Prosser), Liberal Democrat (Ajit Atwal) and Independent (Phil Ingall) groups have signed a joint statement blaming Labour council leader Councillor Baggy Shanker for the “severity” of the situation and are calling upon him to resign with immediate effect.”

The issued statement asserts:

“…It is our collective belief that this situation was totally avoidable and has only been brought about by a negligent leader who has delayed and avoided tough decision-making surrounding this matter while focusing all of his attention on furthering his political career in Westminster…”

albeit they have not explained which decisions were “avoided”. Cllr Shanker states in Derbyshire Live that

“I have assured the group leaders that I have consistently followed the officers’ advice throughout this process”.

They claim that the payment of £93.9m

“.. could bankrupt the city council which would have dire consequences for all of our services and employees at the authority.”

The final “threat” from the 4 Opposition Leaders is

“Should the leader (Cllr Shanker) not resign, then we will have no option but to trigger the process to force a vote of no confidence and seek his removal as soon as possible.”

Opinion

The irony of this situation is that the collective action of the 4 Opposition Leaders is only serving to weaken the position of Derby City Council, not to strengthen it. Given this, one has to ask the motivation behind their action – is it consistent with the Nolan principles of Public Life

Unfortunately all 4 have demonstrated their naivete and lack of political awareness with their transparent political opportunism.

It is clear to a keen observer that Derbyshire County Council raised the invoice to plug a significant hole in its finances. It has already publicly stated that it has capitalised £57m of Incinerator project costs to avoid a damaging depletion of its earmarked reserves. It is facing a £30m+ overspend in 2023/24 and, no doubt, an unsustainable financial crisis in 2024/25.

It needs cash and it needs to bolster its reserves …and this invoice is a simple way to recover many years of poor financial management.

If the 4 Leaders had been financially competent they would know that the auditors will be expressing a view on this within the next few weeks as part of their audit of the 2023/24 financial year.

The questions that Derbyshire County Council’s auditors will ask are:

• Is the Sinfin Incinerator Project truly “live” and is capitalising the termination costs, in fact, a manipulation of reserves rather than an investment creating future value?
• Is the invoice for £93.9m based on a contractual default by Derby City Council and therefore a legitimate credit to revenue reserves…or is it a vehicle to artificially inflate a very poor?

The question that Derby City Council’s auditor will ask is whether the invoice is contractual or whether it has any form of legal basis.

I’m sure that both auditors will be consulting with each other as, logically, both Councils should have a consistent treatment.

It is understood that the County Council does not want to consider the business case in any project progress reviews – it is considered good practice with major projects; Derby Ciy Council is pushing for this to protect the interests of the residents of Derby. Why does County not want to ensure that the project continues to deliver value for all residents?

Derby City Council is not blessed with a competent Opposition – they cannot ask incisive and challenging questions in public and, in some cases, cannot be consistently in attendance.

If the Opposition Leaders’ plan comes to fruition then the new Leader of Derby City Council would be Cllr Steve Hassall who’s most significant non-achievement was trying to promote Wayne Rooney to the Freedom of the City of Derby.

Perhaps the 4 Leaders should have considered the behaviour and motivations of Derbyshire County Council before defaulting to blatant political game playing which only serves their personal interests and not those of the residents of Derby. It is feasible that their actions could jeopardise the City’s negotiating position with the County and cost the City unnecessarily.