A High Court trial investigating a £1.9 million black hole in funding for a Birmingham regeneration project has ended prematurely after a former vicar accused of embezzling more than £1 million agreed to pay £800,000 back to the charity behind it.
The proceedings brought by Midlands Regen – a company set up under the umbrella of Birmingham & Black Country Community Foundation to regenerate Nechells Baths – came to a close when David Collyer, who was being sued by the company, consented to a judgement being entered against him in the sum of £800,000.
Mr Collyer had denied making irregular payments to himself in return for his services to raise funds for the scheme.
The charity had claimed there was a £1.9 million shortfall in funding – a situation which ultimately forced it to take out a mortgage on the property and a loan in excess of £1 million.
As the case progressed it did give credit to Mr Collyer for payments totalling around £600,000, but claimed there was still a sum of between £1.2 and £1.3 million that could not be accounted for.
Mr Collyer also consented to costs in favour of Midlands Regen and two third parties – Pertempts boss Tim Watts, the charity’s president, and well known property man David Bucknall, its chairman.
The costs are to be the subject of a detailed assessment but it is believed they could be as high as £2 million.
The legal proceedings were formally wound up by His Lordship Judge Charles Purle QC sitting as High Court Judge and Mr Collyer also withdrew counter claims regarding fees he said he was legitimately owed as a fundraiser for the project.
Mr Collyer refuted claims the scheme would be fully funded by himself and said the charity was always aware of a 20 per cent voluntary contribution to the scheme of around £1 million. The charity argued Mr Collyer gave assurances all the funding would come via grants.
The Birmingham trial ended abruptly after Mr Collyer was cross-examined over a disputed survey.
A total of 19 payments made to him were scrutinised, one of which was for £230,000 spent on a conservation survey.
Mr Collyer claimed he had paid for the survey out of his pension when he retired as an Anglican vicar.
Under cross-examination he said: “All of it came from my pension payout from the diocese.”
Richard Jones QC for Midlands Regen said: “You are not serious, are you? You are saying you dipped into your own pension payment to fund a £200,000 survey?”, to which Mr Collyer replied: “I am absolutely serious. I do know the survey took place and I do know it facilitated an early start by the builders. It was a requirement of the Heritage Lottery Fund and similar to other projects I had done on churches. It was essential.”
Asked why there was no reference to it in documents before the court, or no invoice Mr Collyer said his former company Linton Marketing had gone into liquidation and relevant paperwork could not be found.
After being cross-examined for eight days, Mr Collyer’s counsel Mohammed Zaman QC requested he be given a period of time to take instructions before calling the next witness, after which an offer was made.
It followed further evidence regarding the disputed survey which Mr Collyer said had been carried out by specialist firm Currie & Brown.
As the case continued, Mr Bucknall had obtained a formal statement from Currie & Brown’s Birmingham office which said the company had not been instructed to provide any survey and was not qualified to.
After initially saying he was sure it was Currie & Brown as the Heritage Lottery Fund had insisted they be used, Mr Collyer said the survey must have been provided by someone else.
The project, which was completed in 2007, involved the restoration of the baths, which saw the dilapidated Edwardian structure transformed into a 21st century community facility providing training, crèche and offices for social enterprises. It was initially expected to cost £4.135 million but ended up costing around £5 million.
Funding included substantial grants from the European Regional Development Fund, the Heritage Lottery Fund and Advantage West Midlands.
Speaking after the case, Mr Bucknall said: “The whole purpose of this was nothing to do with vengeance but was to get justice and money back to the foundation, to enable it to carry on with the regeneration of disadvantaged communities it has worked with for 15 years.
“This has been a diversion away from the focus of making it relevant and vibrant.”
Pointing to some of the work the foundation had been responsible for in Nechells, Mr Bucknall said initiatives in the area had resulted in more than 1,200 long term unemployed being found work, 700 parents benefiting from nursery facilities and employment training and street crime being lower than it had been since World War Two.
He added: “These are the kind of things that build up the story of what we have achieved, how many people we have got back into work. What the foundation is about is putting seedcore money into all these initiatives.
“I feel disappointment and sorrow that such a brilliant project was blighted by what happened and feel let down. It has been a few tough years for the foundation but the commitment from the management and trustees has been strong.”
He said the settlement would go some way towards reducing the debt the charity had been forced to take on to plug the funding black hole.
“We took a loan out and servicing that loan has been killing us,” he added. “That has debilitated its ability to do what it should be doing. We have to thank the generosity of Tim Watts, Pertemps and others. We had to generate nearly £1 million to keep it going.”
Mr Watts said: “This was money which disappeared when it should have gone to the poor and needy of Nechells, an inner city ward which is desperate for all the help it can get. I wasn’t having that. I was determined to bring this matter into the open and get redress. That has been achieved.”
Derek Inman, chief executive of Nechells Regeneration Project, said: “We move on now. This money will release resources that have been paying off the debt for positive things. It won’t clear the debt completely but anything we get to reduce the debt will be channelled into positive regeneration.”