Auditors Lift the Lid on the Collapse of Cleveland Fire Brigade’s Risk Management Services CIC..
- teessidetoday
- Nov 20
- 4 min read
Audit Report Lays Bare How Cleveland Fire Brigade Let Its Own Public Company Fall Into Crisis — And Then Tried to Contain the Damage....
20th November 2025
A new draft report from Auditors Forvis Mazars, which will be presented to Cleveland Fire Authority’s Audit & Governance Committee this week, has laid bare the chain of failures that led to the collapse of Cleveland Fire Brigade Risk Management Services CIC (CFB RMS) — the troubled trading arm of the Fire Brigade that was formally wound up on 31 July 2025 & covered Exclusively by the Teesside & Durham Post...
The Community Interest Company, once promoted as a profit-making enterprise that would reinvest profits into “good causes,” has instead left behind considerable reputational damage, governance failures, and a set of unanswered questions about just how Cleveland Fire Authority managed to allow the situation to deteriorate unchecked.
A Company That Ran Out of Road
Cleveland Fire Brigade Risk management Services CIC was established in 2011 to provide consultancy, industrial firefighting, training and emergency response services.
Crucially, it was supposed to generate profits — not losses.
Under its own model:
65% of profits would go to “good causes”
35% would be reinvested in the company
No profit contribution to the Cleveland Fire Authority’s own budget was ever assumed
By 2025, however, the business had accumulated unsustainable levels of debt (largely owed to HM revenue & Customs) and was operating at a significant loss. In August 2025, its Board voted to liquidate the business after being petitioned by its creditors to appear before the High Court to be wound up, whilst directors for the failed firm attempted to set up a 2nd (backup) company in a bid to evade its huge liabilities.
While Cleveland Fire Authority’s financial exposure was limited by the CIC structure to just £1 (plus a reported net loss of £69,000 to CFA, which will have to be met from reserves), the auditors make one point absolutely clear:
The reputational damage to Cleveland Fire Authority is significant — and entirely self-inflicted.
Auditors Identify Serious Governance Failures
The Audit report identifies two major governance failures relating directly to the oversight of the now collapsed business— both classified as “significant weaknesses”.
These weaknesses were said to be 'so serious', that auditors formally reported them under the Value for Money framework.
Lack of financial information and failure to produce group accounts
Because CFB RMS collapsed without providing what's claimed to be 'accurate' or 'reliable financial information' — including its year-end figures — the Fire Authority was unable to produce its statutory group accounts by the 30 June 2025 deadline.
The Authority still has no timeframe for producing these accounts, with auditors warning that this puts Cleveland Fire Authority at risk of Failing to meet the statutory deadline for audited accounts, Breaching its financial reporting obligations, as well as undermining public trust in its transparency...
Failure to monitor or even challenge the CIC before the crisis hit
The Fire Authority’s own risk register included a clear warning early in the year:
“If Cleveland Fire Brigade Risk Management Service CIC do not operate in a way which aligns with the Brigade’s values THEN there is a risk of financial and reputational impact.”
Despite this, auditors found:
No effective performance reporting from the CIC to the Authority
No timely financial monitoring
No early warning processes to detect the company’s deteriorating position
No meaningful challenge from those charged with governance
Worryingly Still.... The auditors concluded that the Authority only became aware of the severity of the CIC’s financial problems at the point liquidation was inevitable, despite accounting responsibilities being that of the former Chief Financial Officer for Hartlepool Borough Council who now works as the finance Chief for CFA Chris Little.
Their judgment:
“This lack of formal reporting is evidence of a significant weakness in arrangements.”
Reputational Damage: A Risk the Authority Knew About but Failed to Prevent
Perhaps the most damning section of the audit is the observation that Cleveland Fire Authority itself recognised the CIC as a reputational risk (they outlined it in a previous financial report)— but did nothing effective to mitigate it.
The risk was clearly documented. The warnings were there. The oversight systems failed anyway.
Mazars say the meltdown of the CIC represents a “realisation” of a known risk that should have been managed.
A Fire Brigade Subsidiary Left to Spiral Without Oversight
The auditors confirmed that CFB RMS:
Had been losing money
Had accumulated debt
Had no sustainable business model by 2025
Yet there is no evidence the Authority stepped in early, demanded turnaround plans, or escalated concerns.
Instead, the auditors found that, The firms Financial performance was not regularly reported to the Fire Authority, Risks were not escalated, Governance arrangements were weak & Decision-makers not given enough information to challenge or intervene
What Happens Next?
The auditors are clear:
The collapse of Cleveland Fire Brigade Risk Management Services CIC wasn’t simply “unfortunate.”
It was clearly avoidable.
The Fire Authority had:
The warning signs
The risk register entries
The responsibility
The governance structures
Yet it failed to act.
The CIC may have only cost the Fire Authority £69,000 financially — but the reputational damage, the failure of oversight, and the breach of basic governance principles cost far more.
For a brigade already under pressure, this is a scandal that will not fade quickly & calls for heads to roll are already being made !
