AN award-winning racecourse has been stripped of its Investors in People status after its management board was branded "dysfunctional" and judged to "lack effective governance".

In a damning report, the chairman of Musselburgh racecourse, Councillor John Caldwell, was said to have lost the respect of the venue's operations team.

The report warned that unless there were significant improvements, the management of the racecourse would descend into a "spiral of ineffectiveness."

It added: "The managing chair (Mr Caldwell) would not appear to be contributing to the solution but if anything, based on the feedback we have received, he is making the situation even worse."

Mr Caldwell said he would be challenging the report in a future "debrief" meeting with representatives.

"There's misleading information in it and it is not quite accurate," he said. "There are four councillors on the board that they are hitting at and none were interviewed in the last round of interviews."

Investors in People is a prestigious accreditation system held by more than 15,000 organisations in 75 countries.

Musselburgh Racecourse has held IIP status for 12 years but in a highly unusual move the organisation withdrew recognition after two inspections found the racecourse failed five out of the ten necessary indicators - including effective leadership and staff feeling valued.

The racecourse is managed by the Musselburgh Joint Racing Committeewith four local councillors co-opted by East Lothian Council. The other three committee members come from the Lothians Racing Syndicate consisting of racing industry and business experts.

IIP inspector John Hutchison first raised concerns in October 2013 and warned the racecourse was in danger of losing accreditation because of a lack of "effective governance".

After a follow-up visit 12 months later, Mr Hutchison found that relationships had "deteriorated even more".

He stated: "The relationship between the managing chair (Councillor Caldwell) and the operations team has also worsened to the effect that the managing chair, through his actions, has lost the respect of the operations team.

"What should have been a year of mending bridges would appear to have been wasted and if anything the situation has become much worse."

He also said that Mr Caldwell "would not accept that he possibly had a part to play" in how the committee had become "dysfunctional".

Asked about those comments, Mr Caldwell said: "That's an opinion that he had formed. There is nothing I can say as such until we have had the debrief and these points are challenged."

Bill Farnsworth, Musselburgh Racecourse general manager, said they were "deeply disappointed" by IIP's decision.

"However, we are encouraged that the IIP inspector's report makes clear that the hard working staff who make up the operations team are not held responsible for this state of affairs," he said.

"We remain committed to giving racegoers a first class visitor experience and maintaining our position as Scotland's only racecourse to hold a VisitScotland five-star rating."