Taxpayer left with £8m white elephant in row over contracts

More than £5m of public money has already been spent on turning a disused college building in Doncaster into a state-of-the-art enterprise centre but the building stands unfinished and almost empty after funding bodies withdrew support.

Two directors of the trust behind the scheme have resigned in protest at its management while a third has been suspended over his criticisms of the board.

The trust disputed an official finding that contract rules have been broken and insists the project, called Church View, will eventually be an asset.

Initial funding for Church View came from the Government’s 10-year New Deal for Communities (NDC) programme aimed at regenerating come of the country’s poorest areas.

Just over £2m was used to buy the 99-year-old former art college building, with a further £3m used on the first phase of gutting and redeveloping the interior.

When the NDC programme ended last year, a new organisation – Doncaster Central Development Trust (DCDT) –- took on responsibility for ongoing projects.

Critically, another £3.5m was due to be provided from European regeneration funding to fit out a series of business units. But officials found the trust had breached a series of rules when awarding two lucrative contracts and the European funding was subsequently refused.

Records of meetings with officials from Yorkshire Forward, who were due to approve the European Regional Development Fund grant, reveal sharp criticism over an apparent lack of competition when awarding contracts.

In one case, officials said: “It appears there was no selection criteria or competition from which the choice was made.”

They go on to state some documents “appear to have been altered... and this casts some doubt onto the integrity of all the evidence supplied.”

In the other case, officials could find no evidence of competition for the contract taking place and said it was “hard to determine the start date of the contract and to establish what elements are for eligible activity and what aren’t.”

When the grant was scrapped last year, DCDT issued a statement which suggested the economic situation was to blame.

DCDT chairman John Giddins said: ‘”We have been in discussions around our European funding bid for £3m for nine months without achieving a result. Ultimately, we are another victim of these challenging economic circumstances, as we have been unable to satisfy our funders that we can deliver this project without risk.”

Yorkshire Forward closed down last month with its functions taken over by the Government. The Department for Communities and Local Government stated: “An application for £3.5m was submitted to Yorkshire Forward who, at the time acted as the intermediate body for the Yorkshire and Humber European Regional Development Fund Programme.

“The application was subject to detailed appraisal and checking. The project did not, however, demonstrate compliance with EU regulations in respect of procurement therefore no award of grant from the European Regional Development Fund was made.”

Last night, Therese Kennedy, who recently resigned as a DCDT director, said: “It’s a white elephant, that’s the right word for it. It’s one big cock-up.”

Bev Stoddart, who has also resigned, said: “We have spent more than £5m and there is one usable room. The rest is a derelict site. It’s a lovely room but it’s certainly not worth £5.6m.”

Director Peter Beresford was recently suspended after voicing his criticisms to the board. He said problems had been “swept under the carpet”, adding: “The community has been massively let down.”

Church View is being used as an office for DCDT administration as an office for DCDT administration but most of the building lies idle.

Doncaster Council was the accountable body for the New Deal funding but despite overseeing the initial £5m funding on Church View has declined to comment.

DCDT chief executive Ben McCall said it disputed procurement rules were breached and had wanted to take legal action “but as you can imagine, a small voluntary organisation does not take on the UK Government and EU lightly”. He said the board had instead decided to concentrate on finding other sources of investment.

Mr McCall insisted Church View was not an expensive white elephant. “It has great potential and will one day, again be an asset to the town. It has been prepared for future development – in the midst of a commercial property slump and prolonged economic crisis that no one predicted would last this long – so when conditions improve, investors will see it as a prime opportunity.”