Failed Childcare Scheme Asks City For £100,000 Handout

Council tax payers are facing a demand for up to £100,000 to cover the cost of winding up a failed childcare company. Craigmillar Childcare Services (CCS), which manages five centres and looks after up to 200 children, says it cannot afford redundancy payments for staff or to provide training and advice.

The company – which has had its council funding stopped after running up debts of £105,000 – employs 28 staff who have worked there for up to 15 years. The council halted its funding after independent auditors said it was wasting public money.

Councillor Marilyne MacLaren, the city’s education leader, said: “I am sure there are very good staff who have been caught up in this horrible mess and the incompetency of this company. It is clearly not their fault. However, it does seem to be a bit rich asking for this enormous sum of money.”

CCS has written to regeneration agency, the Craigmillar Partnership, asking for a one-off payment of between £80,000 and £100,000 to cover the costs of winding up. However, sources close to the partnership are sceptical that the amount of money being demanded is justified.

One said: “It does seem a stunningly large amount. Normally, when a project knows it is going to run out of funding it would use a quarter of the money it receives in a year to wind up. In CCS’s case that would be about £56,000.”

Consultants, the Walker Partnership, said CCS was failing to provide value for money to tax payers after an audit last year. Its report concluded: “There is a general lack of financial control and experience of managing finances within the company.”

The letter, written by director Patsy King to the Craigmillar Partnership, was said to show the company was continuing to “paint with broad brushstrokes” when it comes to financial planning.

“They are asking for between £80,000 and £100,000 – that’s a £20,000 difference,” said one source. “This is not loose change we’re talking about. They must have done sums internally. They should be able to provide a breakdown of posts and grades of employees who will be receiving redundancies, but they haven’t.”

CCS chairman Paul Nolan defended the company’s request. He said: “There are 28 members of staff, six of whom have at least 15 years service, while the rest have between six and 15 years. At the moment we’re looking at between £85,000 and £90,000, that’s about £3000-a-head, not a huge amount for someone who has worked 15 years.”

The Craigmillar Partnership, had supported CCS’s bid to be funded by the city council until September, so that another agency can be found to replace it. It will now decide whether to dip into its own coffers to help.

Graham Rowan, Craigmillar Partnership manager, said: “There’s going to be a meeting of the partnership on Tuesday when this will be discussed. I’ve received a copy of the letter and asked the organisation for much more money before we can consider it.”