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Colchester Residents hit with £375,000 tax bill for loss-making Council-owned company |
Colchester City Council’s powerful finance committee last night [21st January 2025] demanded answers from the Liberal Democrat Group, which runs the Council, who failed to explain how council tax payers came to be saddled with a £375,000 tax bill for a loss-making council-owned company.
The senior Liberal Democrat Councillors in attendance at Governance and Audit Committee could not say how the blunder happened or who approved the transaction which led to the hefty bill.
Councillor William Sunnucks, Conservative resources spokesman and committee member, said: “This tax bill was wholly avoidable. The Conservatives remain baffled as to how any competent administration could allow this to happen on their watch. The Liberal Democrats who run Colchester City Council are asleep at the wheel.”
The committee heard that the tax bill was paid last month with council tax payers’ money and can’t be recovered.
The bill only came to light when the latest set of accounts for 2023-2024 for the now mothballed Colchester Amphora Energy Limited (CAEL) were published last week.
While CAEL has operated at a loss, it appears that the Council's Lib Dem Administration needlessly involved it in some complex financial transactions that resulted in a tax charge.
CAEL was set up to build and run a ground-source heat distribution network for the Council’s ill-fated Northern Gateway Development including new housing and a health centre on Mill Road.
CAEL dug two deep bore holes, valued at £1.05 million, which are still there, before being mothballed as unviable when the Lib Dem-run Council failed to build any of the houses that it had promised for the site.
Conservative councillors, who are not in control of the city council despite being the largest group, fear the hefty tax bill from HMRC inevitably piles on further pressure. This means more cuts to front-line services.
Garden waste charges were introduced, and the Castle Park toilets were closed last year in an effort to save cash. Many more cuts are already in the pipeline as part of a £4.7million cost-cutting drive, before this latest financial blow.
Residents who are enduring cut-after-cut to front-line Council services can depend upon the Conservative Group to ask the right questions about who took these crass decisions, and to quickly get to the bottom of this waste of public funds."
2025-01-21
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