Council forging ahead with private development company to deliver £36m housing scheme – despite concerns about conflicts of interest

Members voted in favour of a business plan that will see about 100 council staff move to its wholly-owned company Dragonfly Developments, previously set up as a joint venture company with Edwinstowe-based Robert Woodhead, which the authority took complete control of following the collapse of its housing contractor Woodhead Construction in September.

The plan will also see the creation of a separate lettings company Dragonfly Management to form Dragonfly Group, while Karen Hanson will take over as full council chief executive and directors Grant Galloway, Ian Barber and Chris Fridlington will be given new roles in the company.

One of the most controversial issues however, has been the decision by Coun Steve Fritchley, council leader and member for Langwith, to remain as a director of Dragonfly, sparking concerns among both councillors and members of the public that it represents a conflict of interest.

Coun Tom Kirkham, member for Ault Hucknall, said: “Appointing the leader and fellow members as Dragonfly directors presents unnecessary challenges to the company and council.”

He pointed out comments made in a report by the council’s independent consultants 31Ten and Sharpe Pritchard that directors must “act completely independently from the council and from each other”, adding councillors will face challenges “managing conflicts of interest” between both roles.

However, Coun Fritchley argued there was no conflict, saying: “My philosophy on most things is if you want to control it you’ve got to own it.

“It’s what’s best for the council, you’ve got one shareholder, which is Bolsover Council.

“If I was sat here not as a director, I’d be concerned the company was full of private people representing the best interests of the council as a shareholder. I think in any organisation or any extension of what we’ve got, there’s got to be continuity.”

Mr Galloway, who has been a director of Dragonfly since it was first set up in 2016, said: “There is no hard and fast rule over whether being a member and being on the board is correct or not.

“Members on the Dragonfly board declare an interest and are not allowed to vote.”

Mr Galloway said any staff moved from the council to Dragonfly would do so following consultation and be on the same pay structure and pension scheme.

The business case outlines the council’s plan to borrow from the Public Works Loan Board, a Government body which charges councils low interest to fund capital projects, and in turn loan that money to Dragonfly at a higher rate of interest, making a return on its investment.

Many have identified a flaw in the fact the council, as planning authority, will be granting planning permission for developments and loaning cash to its own company to deliver.

Coun Fritchley said the authority was allowed to, it was common practice at councils across the country and made good financial sense as hiring an external contractor would cost more money.

The council plans to use Dragonfly to create private and social housing, which, the directors said, would support the authority’s income.

They will also use it to deliver large capital projects such as the £9m Shirebrook Crematorium.