A Total Failure of Governance Financial Management, and Accountability : Liquidators report lays bare the scale of Cleveland Fire Authorities Side Company Collapse.

Liquidators report lays bare the financial scale of the collapse of a public institutions community Interest Firm thats likely to leave the tax payer shouldered with its huge debts.

16th August 2025

The collapse of Cleveland Fire Brigade Risk Management Services C.I.C. has now finally exposed a catastrophic financial disaster, leaving creditors facing significant losses and raising serious questions about governance, oversight, and accountability by its parent organisation Cleveland Fire Authority.

Liquidators now tasked with winding up the company have laid bare the scale of its financial ruin, with a mountain of debt estimated at over £2 million pounds, far exceeding any initial expectations suggesting the firms financial demise was occuring far longer than many had originally anticipated & revealing a shocking lack of governance & accountability. The fallout from this collapse, as reported by the Teesside & Durham Post, threatens not only financial losses, but also severe reputational damage to its parent organisation, Cleveland Fire Authority, potentially from what sources have now told our reporters could lead to several resignations and long-term operational harm.

Financial State at Insolvency

The Statement of Affairs for the now collapsed CIC, dated 4 August 2025, reads like a horror story of how businesses simply should be run. Despite earlier reports suggesting approximately £221,000 in releasable assets, the liquidators’ report, prepared by Martyn James Pullin and Bhuvnesh Majupuria of FRP Advisory Trading Limited, has now indicated that no releasable assets available for distribution to either secured or unsecured creditors. This discrepancy raises concerns about the accuracy of prior asset valuations and the feasibility of recovering any funds.

The company’s financial liabilities unearthed are staggering:

• Preferential Creditors: HMRC, the largest creditor, is owed £1.54 million for VAT, PAYE, and Employee NIC, a slightly figure higher than the £1,338,627 reported in the Statement of Affairs, suggesting either an escalation in claims or possible earlier underestimations.

  
  

• Unsecured Non-Preferential Creditors: A total of £1,820,052 is owed to 37 individual creditors, with individual debts ranging from as little as £294 to a significant £94,000 owed to Cleveland Fire Authority itself. The Teesside & Durham Post notes that the Fire Authority has already resolved to write off this amount, further burdening the taxpayer...

• Total Deficiency: The Statement of Affairs reports an estimated deficiency of £1,160,051 for preferential creditors alone, with no assets available to cover unsecured claims. The total debt, combining preferential and unsecured claims therefore now exceeds £2 million pounds, confirming the Teesside & Durham Post’s assertion that the financial collapse is far worse than anyone had initially anticipated.

Circumstances Leading to Collapse

Cleveland Fire Brigade Risk Management Services C.I.C. was forced into liquidation following a High Court order, triggered by its failure to pay numerous debts, with HMRC’s £1.54 million claim being the most significant. The Teesside & Durham Post reported previously that directors for the now failed CIC had attempted to establish a new corporation in an apparent bid to evade creditors, only for the court to uncover and shut down this entity.

Peter Devlin, The former Chief Solicitor to Hartlepool Borough Council, who suddenly resigned as a director for the failed CIC has still never publicly stated why he departed the now insolvent corporation just weeks before it was petitioned for insolvency.

This manoeuvre suggests either desperation or a deliberate attempt to circumvent financial obligations, further eroding trust in the company’s leadership. The scale of the financial collapse also indicates that the company’s problems were not a recent development but likely stemmed from systemic issues that predated the liquidation by at least a year. The sudden resignation of former chief solicitor to Hartlepool Borough Council Peter Devlin, who served as a director of the C.I.C., just weeks before HMRC’s filing for liquidation, raises suspicions that senior officials at Cleveland Fire Authority were in fact aware of the company’s dire financial state but failed to act either transparently or effectively. This lack of accountability has fuelled speculation about mismanagement and poor oversight within the organisation.

Reputational and Operational Fallout

The collapse is said to have inflicted severe reputational damage on Cleveland Fire Authority, the C.I.C.’s sole shareholder.

Sources who contacted The Teesside & Durham Post suggest that the fallout is now so significant, it has jeopardised future business relationships with the Fire Authority, with firms reportedly now "reluctant to engage with an institution now perceived as unreliable".

This reputational crisis has reportedly led to calls for some senior officials involved in the failed company to resign, with sources indicating that several officers tied with the failed CIC have been asked to “consider their future” at the embattled institution. The attempt to establish a new corporation to sidestep creditors has also reportedly further damaged the Fire Authority’s credibility, raising questions about the honesty & integrity of its senior leadership. The lack of transparency regarding the C.I.C.’s financial demise, particularly the timing of one of its director’s resignations, suggests that critical information may have been withheld from stakeholders, including creditors and the public.

A Total Failure of Governance & Accountability...

Our financial expert tasked with examining the now collapsed CIC's accounts & statement of affairs stated that the collapse of Cleveland Fire Brigade Risk Management Services C.I.C. represents "an almost total failure of governance, financial management, and accountability".

The absence of releasable assets, points to either gross overestimation of asset values or a rapid, yet seemingly unexplained deterioration in the company’s financial position.

The significant debt owed to HMRC and other creditors, coupled with the lack of recoverable funds, underscores a prolonged period of financial mismanagement that went unaddressed by the company’s directors and its parent organisation.

The attempt to establish a new corporation to evade creditors is particularly troubling, suggesting a lack of ethical oversight and a willingness to prioritise self-preservation over creditor rights. The involvement of Cleveland Fire Authority, a publicly funded institution, only amplifies the severity of the situation, as taxpayers are now left to bear the financial consequences of this failure. The reputational damage to the Fire Authority threatens its operational viability, as diminished trust could hinder its ability to secure partnerships or funding in the future.

Heads Need to Roll

The collapse of Cleveland Fire Brigade Risk Management Services C.I.C. is a stark reminder of the risks associated with poorly managed public-private ventures propped up with poorly experienced officials who have little or no experience running either private corporations or living in 'the real world'. The scale of the financial collapse, with over £2 million in debts and no releasable assets, has left creditors, particularly HMRC and unsecured claimants, facing huge losses. The taxpayer, through Cleveland Fire Authority, will likely be the ones bear the brunt of this failure, whilst the institution’s reputation lies in tatters & its directors simply 'walk away from it all'.....