Bolsover District Council may use its development company to provide work for other councils

The district council’s Executive approved in principle only at this stage, at a meeting on April 15, for the council to act as a main contractor and if finalised this could mean it could be approached by other local authorities seeking work and services from the district council’s Dragonfly Development Ltd.

As part of the proposed arrangement, powers would be passed to the council’s Chief Executive Officer Karen Hanson to allow her to enter into non-binding cooperation arrangements with other local authorities.

If this proposal is finalised other local authorities could arrange for work to be undertaken by Bolsover District Council as a main contractor who would in turn sub-contract out the requested projects to its Dragonfly companies.

Ms Hanson told councillors at the meeting : “This is an in-principle arrangement and not agreeing anything today, but making sure you are happy with arrangements to enter into arrangements with Dragonfly.”

A council report stated that since Bolsover District Council transferred property and construction staff into the Dragonfly group of companies, Dragonfly Development Ltd has already successfully completed a housing scheme for a wholly-owned company of a neighbouring local authority.

The project was so successful, according to the district council, that this local authority and other local authorities want to engage the services of Dragonfly to deliver more construction projects and consultancy services for property-related schemes.

Currently, another local authority is unable to procure works and services from Dragonfly Development Ltd without undertaking a legally compliant procurement exercise, according to the district council.

However, a local authority may arrange for another local authority to discharge its functions under section 101 of the Local Government Act 1972, according to the council.

So the district council is proposing that other local authorities be able to arrange for work to be undertaken by the district council as a main contractor who would in turn be able to sub-contract the work out to its Dragonfly companies.

Dragonfly has approached solicitors to advise on a suitable model to enable local authorities to procure services from Dragonfly via an arrangement with Bolsover District Council which is also seeking its own legal advice.

Solicitors have advised that another local authority could procure Bolsover District Council to deliver construction and property-related projects and the council would then need to arrange a subcontract with either Dragonfly Development Ltd or Dragonfly Management Ltd, in Bolsover, depending on the value of the contract and in accordance with the council’s contract procurement rules.

The district council’s report stated that by agreeing to the proposal, Dragonfly Development Ltd would then be able to enter into negotiations with other local authorities to undertake work on their behalf via a contractual agreement with the district council.

By not agreeing to this proposal, other local authorities would need to undertake procurement exercises which would mean that the council’s Dragonfly Development Ltd would need to compete with other building contractors for work.

So the district council’s Executive has agreed in principle for the council to act as a main contractor for other local authorities seeking work from Dragonfly Development Ltd and, in principle, it also agreed to give delegated authority to the Chief Executive Officer to enter into non-binding cooperation arrangements with other local authorities.

Cllr Mary Dooley said: “I am happy with this, but we need to prioritise Bolsover first. It’s great other authorities want us, but Bolsover comes first in my opinions.”

A council officer stressed this is an in principle decision only at this stage so if it is later decided that this is not appropriate the council would not enter into these arrangements.

Bolsover District Council has previously attracted criticism about possible, alleged conflicts of interest regarding its wholly-owned private development company Dragonfly Developments Ltd which already oversees much of the council’s own projects.

One of the key concerns has been the decision by the Council Leader, Cllr Stephen Fritchley, to remain as a director of Dragonfly sparking worries among some members of the public that this may represent an alleged conflict of interest.

Cllr Fritchley has argued there is no conflict of interest issue despite some identifying that the council – as a planning authority – may grant planning permission for developments and may loan cash to its own company to deliver on projects.

But Cllr Fritchley has said the authority is allowed to do this under the Localism Act 2011 and it has been common practice at councils nationwide.

He has also said the current arrangement with Dragonfly makes good financial sense because hiring an external contractor costs more money.

According to the Government’s Company House records Dragonfly Development Ltd is a private limited company that develops building projects and it is based at The Arc, on High Street, in Clowne, where Bolsover District Council also has its headquarters.

Cllr Fritchley was appointed as a director of Dragonfly Development Ltd, in 2019, according to Company House, and he is also the council’s sole appointed representative to the outside body Dragonfly Development Ltd Board and Cllr Janet Tait is also listed as a Dragonfly director.

The Council Leader temporarily left the latest Executive meeting during discussions about the latest proposals concerning Dragonfly Development Ltd after he declared a personal interest.

Bolsover District Council’s company Dragonfly Development Ltd was established after Edwinstowe-based Woodhead Construction ceased to have control of the company and fell into administration.

The council has stated not only has the company been formed and a board established with sustainable working practices, but it has employed staff, re-engaged local contractors, and completed two major prominent build projects.

Following work on two major projects by Dragonfly, 19 new homes have been built at the Willows, in Whaley Thorns, as part of the Bolsover Homes scheme and a new £3m Heritage and Wellbeing Centre was constructed and opened in Creswell for the parish council.

Dragonfly Development Ltd has also been building the Roseland Park and Crematorium, in Shirebrook, as the result of a partnership between Bolsover District Council and Shirebrook Town Council.

Bolsover District Council also recently agreed at an Executive meeting in March to award the contract for the demolition of the council-owned bungalows and ancillary buildings on Briar Close, Shirebrook, to the council-owned developers Dragonfly Development Ltd.

The council has previously attracted concerns about alleged, potential conflicts of interest regarding its wholly-owned private development company Dragonfly Developments Ltd after about 100 council staff moved over to the company, last year.

It has previously stated that its aims have been to use Dragonfly to create private and social housing which supports the authority’s income and to also use the company to deliver other large capital projects.