Collapsed firm loses financial claim against council

An adjudicator has ruled a council does not owe a contractor more money for a delayed regeneration project it claimed led to its financial collapse.

Inside Limited was appointed to work on the Clay Cross town centre regeneration project by North East Derbyshire District Council.

The firm claimed the council issued inconsistent instructions, conflicting information and changed positions on the redevelopment, which meant work fell behind before it pulled out with the work incomplete.

It also claimed the council owed it a seven-figure sum and that it had now ceased trading. The council said the majority of the financial claims were not proven.

Inside Limited said in a statement: "The financial pressures arising from this project placed the company under severe strain and ultimately contributed to the company ceasing trading."

The council will now seek a new contractor to carry out the remainder of the project, which has been in limbo since the beginning of the dispute.

It has not disclosed a figure for the amount spent in legal fees on the case, but it is understood to be in the tens of thousands.

The town's regeneration plans include pedestrianising the existing main high street, Market Street, and a new town square named Baileys Square.

The square would provide space for businesses and space for community activities.

The £24m funding to deliver projects in Clay Cross came from government regeneration funds in 2023.

It has faced significant delays despite a slated completion date of March 2026, which was given last year.

Following the conclusion of the legal action, North East Derbyshire District Council said in a statement: "The adjudicator assessed the value of the works carried out and concluded that the contractor had already been paid and as a result, no further payment was awarded.

"While the adjudicator identified limited delays on some parts of the project, no additional payment was made because the contractor did not provide evidence to support claims for loss and expense.

"The council takes its responsibility to protect public money very seriously and welcomes the clarity provided by the independent adjudication".

Inside Limited said the council's statement "presents an incomplete picture of the project and the issues encountered during delivery."

"Inside Limited worked on this regeneration project for a prolonged period under extremely challenging circumstances and continued attempting to deliver the scheme despite ongoing issues relating to possession, utilities, design development and changing project requirements," it said.

"The company successfully delivered more than £80m of construction projects across the UK during its trading history and remains proud of the efforts of its employees, subcontractors and supply chain partners.

"Inside Limited strongly disputes aspects of the narrative currently being presented publicly and reserves all rights in relation to the final account and associated matters."

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