www.counterbalance.org.uk

 

fylde counterbalance logo

search counterbalance

plain text / printout version of this article

countering the spin and providing the balance


 

Capital, Dear Commissar, Capital

Capital, Dear Commissar, Capital.Tonight's Cabinet meeting had several reports that will be of interest to our readers, but one is simply outstanding, and we wanted to bring it to you quickly. Over the months and years of the Commissar's reign we have brought you the stuff of legend as we unfolded the tales of absolute financial incompetence that have been so ably demonstrated by the Cabinet.

Well tonight comes a story that tops all the others (and that's no mean feat).

A decision that was made tonight will go down in the annals of Fylde's history as the most shameful that could be made by a serving Cabinet.

You'll remember that in recent months we have tracked the decline and fall of Fylde's money. Starting with the former finance officer's disastrous attempt and failure to manage the introduction of a new accounting computer system that we reported in 'No Accounting for Fylde' this debacle led directly on to the inability of managers to identify what their spending had been, and how much of their budgets they had left.

It caused the failure to perform any meaningful financial monitoring from the start of Fylde's year in April until November or December. It caused the lack of bank reconciliation for the same period.

And it drained almost all the councils reserves of cash as the black hole of Streetscene's overspending opened up before us. That swallowed up around £1.2 million before burping a couple of thousand back out at the end of the year.

That draining of reserves and panic over the shortfall caused the closure of the swimming pools in a knee-jerk reaction to halt cashflow exiting down a one way street.

Then we had the panic when the savings identified would not be enough and, in 'State of Emergency' we explained how another £380,000 of savings were being clawed out from existing budgets with all manner of dire consequences.

All sorts of money - including money granted for spending on business support in Fylde, and other money called 'Planning Delivery Grant' that was sent from Government for preparing Fylde's Planning Core Strategy and other planning documents went straight into the black hole.

Money that should have been spent preparing the planning policies for environmental change called the 'Area Based Grant' was spent on temporary lowering of car parking charges in the run up to Christmas and beyond.

And finally, the coffers were running on empty.

We said in our last few financial reports things were bad.

They were not only bad, they were awful.

A delegation wasted its time going to see Government to plead its case.

We've been in on these sort of shindigs before. All tea and biscuits and pleasantries followed by the "And now Mr Coombes..., tell us what it is you've come for....... You want to be able to increase your precept without being capped...  I see.... and you have special circumstances that mean you really need it..... I see.....  Do you mean riots like Oldham and Burnley....? or shootings and knifings like Manchester..... No?... Turning to a Civil Servant he says now David, just remind me Fylde..... do we have a...... Ahhh yes, thank you. Now, let me see, you're the Council that lost half a million in its accounts on the wrong side of the books wasn't it?..... and your accounting papers were so bad the next year your auditors couldn't even audit your books..... oh dear..... and they we had to issue a SAS 10 report about your poor financial management.... and then..... and so it goes on until the delegation makes its excuses and heads for Victoria Station.

Like we said mostly a waste of time.

Readers will also remember we worried that having plunged our finances from having reserves of over £2 million to a balance of effectively zero, the next step for financial incompetents like the Commissar and his had picked team was to join the toxic bank queue and take out a loan, mortgaging his  incompetence to future taxpayers.

Well, the loans have started. Fylde is going into debt.

And it's just about to get even deeper in debt.

So far, its about £1 million in the red.

Now that's not necessarily a bad thing. Some things like big infrastructure projects SHOULD be funded by loans. Something like a new road or a leisure centre or new park should be funded on loan. That's because it will last for many years, perhaps generations in the case of a park, and its unfair to ask the taxpayers of one single year to pay for something that will be here when they are dead and gone.

So borrowing for long term infrastructure is a good thing, because it spreads the cost of providing it (ie the repayments of principal and interest on the loan) over the generations of users that will be using and enjoying it.

But as anyone in finance or business will tell you, the one thing you don't get a loan for is revenue spending.

That means you shouldn't borrow money to fund housekeeping items.

And that's where Fylde are now going.

They have persuaded Government to give them not more money, but to allow them to "capitalise some of their revenue spending" Altogether £705,000 of spending is involved.

They are being allowed to capitalise £150,000 of revenue spending which they must  generate that themselves from sale of one or more assets, and they are also being allowed to capitalise a further £555,000 of revenue spending which is to be funded by borrowing over the next 20 years.

The repayments on this loan will be around £40,000 a year for the next 20 years.

So what is this money going to be used for?

Well according to Dim Tim, he wants to use it to re-open St Annes Swimming Pool. Given that the stated reason for its closure was a shortfall in revenue spending it's difficult to see how capital spending will help, unless it's to install a fitness suite or something else that might increase ongoing revenue. Furthermore, given that he's the one that proposed it should be closed, we think his suggestion is just a blind to get cheap and temporary publicity in the run-up to June's County Council election in which he is expected to be a candidate.

We also think the Commissar is going to be in trouble at that election, so you can expect to see newspaper headlines about swimming pools re-opening.

 If they appear, they should be treated with more than a pinch of salt because we think the money is for something else.

According to the papers attached to the Cabinet report, the Government has given capitalisation permission for £405,000 to be spent "developing the Core Strategy" that is central to the planning system that is replacing the local plan, and on "investment in the council's assets and infrastructure".

It has also given capitalisation permission for £300,000 of spending to go on "contributions to the Authority's pension fund" and on "redundancy payments"

Yes, you heard that right.

We now have two problems.

The debt being racked up by this credit-crunched, sub-prime Cabinet is starting to tie the hands of the future administration we will elect when these incompetents are finally thrown out of their ivory tower.

The only fly in that particular ointment is that, like some Latin American failed state, he might believe if he can make the debts big enough, no one else could make financial changes, and will be caught in a trap with no 'wriggle room' - so he might as well stay in power. Perish the thought.

But the bigger problem, the problem we all share tonight, is the shame in putting our confidence in a so-called Conservative administration that has had to borrow the money to make their staff redundant.

This is the final nail in his coffin.

Borrowing to sack your staff because of your own financial incompetence is about as low as you can get.

He - and his colleagues - should be hanging their heads in shame.

We report elsewhere today on the hard work and dedication of two of those members of staff, taking on the might and money of Kensington in a Planning Inquiry.

They deserve better.

This awful move ranks right alongside Liverpool's Derek Hatton's infamous escapade of running round in taxis delivering redundancy notices to his staff.

The only difference here is that Fylde probably can't even afford the taxi fare.

Dated:  6 May 2009


info@counterbalance.org.uk

To be notified when a new article is published, please email 
notify@counterbalance.org.uk