Town Council says it did not increase council tax to prop up loss-making cafe

Connah’s Quay Town Council has said it did not bump up council tax to underpin its loss-making cafe.

A report by the Auditor General for Wales last month said the town council incurred a cumulative deficit of over £234,000 in the operation of its Quay Café since 2010.

The audit report stated, “In order to balance its finances, these losses have been met by the council setting a higher precept than it would otherwise have needed to set.

This has resulted in increased council tax charges to residents of Connah’s Quay.”

Documents released ahead of a special meeting being held tonight at the council’s Fron Road offices give a detailed response to the findings published by the Wales Audit Office (WAO).

Auditor General, Adrian Crompton said the council did not give due consideration as to what powers it had to open Quay Café back in 2010, a decision which was based on a “poorly prepared business plan” and as a result, “the decision to open the café was unlawful.”

In the documents for tonight’s meeting,  town council clerk, Steven Goodrum says the council did “technically act unlawfully” however a “a clear distinction needs to be made — this was not a deliberate act taken by council to act unlawfully.”

Mr Goodrum’s response goes onto to say “the council incurs costs for a number of its activities and whilst the operation of the café has incurred costs for the council, referring to these as ‘operational losses’ suggests that the café was intended to be operated as a business. It was not.”

“There was (and still is) a clear belief that the café does have a benefit for the local community.”

However, “the council has failed to record evidence about what benefit the café does provide to the local area.”

“Had there been proper recording of any benefit to the local area then this could have been used to justify the decision taken by council.”

The WAO report makes three clear recommendations for the council and these are:

– To undertake a full option appraisal for the operation of Quay Café, incorporating a full financial appraisal of each option;
– To ensure appropriate advice is received prior to making decisions on the provision of new or novel services;
– To review the services it provides and ensure that it understands the statutory basis on which it provides those services.

Following the publication of the WAO findings, Adrian Crompton said: “Given the scale of the deficit incurred at Connah’s Quay Town Council, I believe it is important that the public has a full and proper awareness of the events concerning the council.

When it opened the café, the council did not have the statutory authority to do so and its decision was not supported by a clear and coherent business plan.

As a result the decision was, in my view, unlawful.”

The term unlawful in the case of the Quay Café does not mean it was criminal, it refers to the fact that the council lacked statutory authority to establish the cafe.

At tonights Special Meeting, which is open to the public, town councillors will discuss the outcome of the report and whether to accept the three recommendations.