£3.3million lost in leisure trust fiasco

After 4 years we have finally found out the estimated cost to Nuneaton and Bedworth Borough Council pension fund from the mismanaged leisure contract re-tendering.

The council set up an arms length organisation (Nuneaton and Bedworth Leisure Trust, NBLT)  to manage leisure in the borough to get advantages in bidding for funding and taking staff off the books. As part of the process some staff of  Nuneaton and Bedworth remained in the local authority pension scheme (managed by the county council) with the liability underwritten by the borough council. The council later re-tendered the service and awarded the main part of the contract to a new operator. The transfer was a mess as the borough council seems to have never set the previous arrangement up robustly to cope with a re-tendering.

The council seemed to ignore all liability even though it created the situation.  It was clear that NBLT could not cover all historic pension liabilities from when staff were providing council services. NBLT public accounts made it clear that it believed NBBC was liable for £2.8m of the deficit. This was not shown in the Borough Council accounts and the Borough seems to have spent £100,000s on the legal mess it created by the arms-lengthening and then re-tendering.

In 2015 Michele Kondakor asked at NBBC full council about this mess and was given a reply that stated there was no liability.

The 2017/18 Borough Council accounts have just been published and show the pension liability from this mess is currently estimated to be £3.3 million.