COUNCILLORS have demanded to know why they had no oversight of a local authority-run company set up to distribute public funds which has laid dormant for several years.

Councillor Neil Baldwin said nearly a quarter of million of pounds in the accounts of Redcar and Cleveland Enterprise Limited had been “sat there doing nothing” and it was bizarre that former council members had remained as directors.

Meanwhile, Redcar and Cleveland Council leader Mary Lanigan said she was “quite appalled” and wanted an inquiry into events.

But former council leader George Dunning said he was “bemused” by the fuss being caused and suggested Cllr Lanigan and her colleagues were being mischievous with their comments.

Mr Dunning, who continued to sign off on the company accounts as vice-chair until last year, resigned from the council in 2015 having spent eight years as leader.

Companies House records show that Redcar and Cleveland Enterprise Limited, whose registered address is the South Tees Business Centre, in Puddlers Lane, Middlesbrough, had current assets worth £221,739 as revealed in its last set of accounts up to March last year.

It has also had 45 officers on its books, a number of which were former councillors appointed as directors, the majority of whom have now resigned.

One former director included former radio broadcaster, the late Ali Brownlee, who was a Redcar bank manager when he was appointed in November 1994 when the company was known by the previous name of Redcar and Cleveland Development Agency Limited.

Cllr Baldwin, an independent who represents Coatham ward, questioned why “former council representatives were allowed to control council business” and said a policy should be formed to ensure this never happened again.

He also said it had been a mistake to allow money, which was intended to be used to help local businesses and boost economic development, to be left in the company’s coffers.

Cllr Baldwin told the Local Democracy Reporting Service (LDRS) that a resident in his ward had contacted him with concerns about the company and he had been “nowhere near satisfied” with the response he had received from council officers.

He said: “We are in an area with problems with jobs and employment and we are just sitting on nearly a quarter-of-a-million pounds which could be spent on something like a local employment hub.

“It is undoubtedly the council’s money, but it seems to have been forgotten about.

“We also had council money in the care of people who had no relationship with the council anymore, it seems bizarre that we would allow that.

“We want to know who was responsible for this situation and how and why it happened.

“I would like to see the money spent as originally intended on jobs and supporting workplaces.”

Cllr Lanigan, who heads up an independent/Liberal Democrat coalition on the council, said: “I was quite appalled when we found out about this.

“I want some further details and I want to know why this was set up with council members and why that amount of money was sat in there.

“The rest of the council were not aware that this was going on and it can’t be allowed to happen again.

“I want an inquiry and I want the full details.”

‘Council acted appropriately’

Mr Dunning said: “The council has always acted appropriately, especially the legal section, because it has always been in touch with me to sign the accounts off.

“I was always signing off the accounts because the chairman, who was from the private sector, was hardly around.

“My impression is they [the council] are going to reincarnate the company because it has not been doing anything since we left.

“They have suddenly decided they wanted to do something and have asked the directors to resign.”

The 72-year-old former Labour group leader, who lives in Ormesby, initially appeared confused about how much was actually remaining in the company accounts and was adamant that there was only a “couple of thousand quid in it”, only later to correct himself and admit he made a mistake.

He said: “These councillors are being a bit mischievous.

“The council is desperate for money now and didn’t get enough money from the Government for the cyber attack they had and are in a bit of a mess financially.

“I honestly think they’d just let it be dormant there previously because basically no one was bothered, a quarter of a million to you and I is life changing, but to them it was probably less than peanuts.

“Maybe they just had a bit of a nonchalant attitude towards it, but they shouldn’t as it is public money.”

Mr Dunning said the company, which also operated under a previous name, the Redcar and Cleveland Development Agency Limited, never got involved with any massive enterprise or gave any substantial funding to anyone as far as he was aware.

He also said the resources it had could have been used to help businesses during the coronavirus pandemic.

Councillor Lynn Pallister, who represents the Grangetown ward for Labour, said she had been asked to resign as a director, having been appointed in September 2013.

She said: “I don’t remember [the directors] ever meeting, but yes it was council money and supposed to look at how the council could become more entrepreneurial.

“It never really went anywhere and as far as I know the money is still there which was put in.

“You won’t get very far with it, it may help a few small businesses, but it will be swallowed up before you know it.”

“They [the ruling group] are making something out of nothing and making a big deal of it.

“They need to get their priorities sorted and start looking at the big issues.”

The council’s managing director, John Sampson was recently added as a company director and records show he signed off the last set of accounts on April 26 this year.

Andrew Nixon, a manager with the council’s legal department, told a council scrutiny committee that the company was essentially non-trading.

He said: “This was a historical entity and the company wasn’t actually doing anything.

“We will be looking to essentially see what’s in the accounts and what we should do with the company going forward.”