Nottingham Specialist Transport (NST) was awarded a 2 year contract (£1.8m pa) in September 2023, by Derby City Council, to provide home to school transport for many of Derby’s vulnerable children.

Questions were raised in a Derby News article in October 2023.

Would you put your vulnerable child into an unmarked minibus? Derby City Council expects you to!

Derby City Council assured parents that their selection process was “compliant”. NST beat the competition by offering a price 50% less than established taxi operators.

Derby City Council’s Home to School Transport contract – independent audit needed.

Whilst this was an attractive proposition, NST seemed to lack experience, staff, vehicles and financial robustness.

Council’s Home to School transport supplier technically bust!

NST has recently issued its financial statements for its 1st full school year of operation. Its listing at Companies House raises further questions.

On 27th August 2024 a notice was filed “First Gazette notice for compulsory strike-off”; this is the start of formal proceedings to remove a company from the Register. This was discontinued the day after.

On 30th March 2025 it published its financial statements for the year to 30 June 2024.

A number of key conclusions can be drawn:

• In the first year of operation it lost ~£58k
• It’s short term liquidity worsened from a net liability of £68.6k to £273.5k – a very precarious situation.
  • NST had £5 ( just a fiver) in the bank to cover £273.5k of outstanding debts!
• It almost doubled its asset base – consistent with buying more vans for the contract.
• Lower down in the statement it confirmed that it had 4 employees

On 17th June 2025, it completely re-stated its 2024 financial statements

This now presents a quite different picture. (NB some of the 2023 numbers have also changed)

• The 1st year of operation is no longer a loss of £58k but a small profit of £2.2k
• The liquidity is still very precarious albeit £40k less
• The £5 cash balance has now inflated to £10.5k
• A new “asset” is the “prepayments and accrued income” of £58k. It is this amendment which has most influenced the re-stated profit.
• The average number of employees has increased from 4 to 10.

Comment

There are occasions when companies do re-state their published numbers. These tend to result from technical issues with accounting regulations; these are rare.

NST is a simple organisation – it has people, vans and cash.

Cash at bank – this is one of the few items on a balance sheet where there is little scope for error, or subjectivity. It is essentially factual. It is surprising that a company can sign off a set of accounts that states that it has just £5 in cash and then discovers that it has, in fact, got £10,505 in the bank.

Employees – in addition to cash, the number of staff employed is easy to get right. NST has made a 150% error!

Vans – in a 3 month period NST discovered that it had understated its vans by £28k!

The change which has most manipulated the accounts is the “Prepayments and accrued income” of £58k.

This either relates to a restatement of a payment that has been made that relates to a subsequent year (prepayment), or the recognition of income that has been earned but not paid, or invoiced (accrued income).

It is unusual that mistakes are made, especially at such a fundamental level which completely change the financial direction of an organisation.

On the revised accounts the directors state:

“There is no significant amendments made consequential upon the remedying of those defects” (sic)

There is a review point for this contract in June 2025. Derby City Council should carefully analyse the liquidity and sustainability of this organisation and ensure that it is an appropriate contractor for a City Council and also whether this level of manipulation indicates other issues pertinent to the transportation of vulnerable children.

It is very unusual for accounts to be restated in this way. It raises questions as to why this has happened just prior to the Council’s review of the contract.

Postscript

NST was awarded a fixed price contract of £1.8m pa for 2 years however there has been a 20% increase in its monthly invoice for the 2nd year. This makes NST more expensive than the 2nd place contractor.