Ferrygate - Where Does The Buck Stop?

The sorry saga of how Thanet District Council handed over £3.3m of taxpayers' funds to a failing ferry company continues to rumble on. Let's recap the story so far, and then make some conclusions:

• At some point in early 2011, TransEuropa Ferries started getting into trouble and were having difficulties paying their bills at the Port of Ramsgate (owned by TDC). This could not have come as a surprise, as TEF had been running down their services for years, and despite TDC spending £700,000 dredging the port for a new, larger ferry (the Ostend Spirit), the new service had failed to attract more than a few months' income. The £700,000 spent on dredging, which had been done without adequate financial safeguards in place to recoup the money from TEF, plus around £70K of bad debts owed by TEF, were written off. That's on top of the £3.3m that TDC have 'just' discovered.
• According to TDC, around March 2011, at the same time the council effectively removed the port accountant who had successfully handled the port's financial and commercial affairs for 27 years and had raised concerns about the slowing up in payments by TransEuropa through late 2010 and early 2011, some bright spark at the then Tory-led administration decided that, rather than chasing the invoices, they would allow more debts to stack up in the forlorn hope that TEF would come good.
• TDC's then Head of Regeneration, Brian White (who held the port in his portfolio), is reported as having demonstrated little concern about the mounting problems, and having few solutions as to where to source another major shipping line to replace the cash cow that had previously been TEF.
• Not long after, the aforementioned Brian White was given a golden handshake of around £150,000 (including pension arrangements) and waved on his merry way. Chief Executive Richard Samuel, who also presided over this state of affairs, scarpered too, with £173K in his pocket, leaving the current Chief Exec Sue McGonigal to land the six figure job (and keep her finance officer responsibilities) after a 20 minute interview.
• By the time the new Labour administration came into power at TDC in December 2011, TEF's debts were already standing at a staggering £1.7m. Alarmingly, there seems to be no mention of this sum in TDC's accounts for that year. Nonetheless, the Labour administration were, we assume, informed of the situation, and were complicit in the plan to allow TEF to carry on not paying their bills.
• At the beginning of 2012, The Ramsgate Port and Marina Cabinet Advisory Group, which was set up in late 2010 to advise on the commercial development of the port, decided that neither it nor anybody else at TDC had the competence to advise on the commercial development of the port, and would therefore spend £20K of public money hiring consultants to do it for them. At which point it also decided that all future meetings would be held in secret.
• Last month TEF finally went totally tits up, and this week we learn that the total cost to TDC is £3.3m.
• Not only that, but the Belgians are holding all the debt recovery cards. Where are the ferries? In Ostend.

Now, thinking about this disaster, if TDC were a company, heads would roll, knighthoods would be revoked, and pensions halved. The trouble is, as the Tories set up this silly scheme, and Labour then continued it, they can both conveniently blame each other until the proverbials come home.

But what about the permanent TDC officers, TDC's employees paid for by our council tax, on stupendous stipends of £100K a year or more, who have been overseeing this mess all along? Sue McGonigal has been the Section 151 officer (or Chief Financial Officer in private sector speak), all the way through this ferry farrago. Local government guidelines state: 'The S151 Officer owes a personal duty of care to local taxpayers in managing Council resources on their behalf. In discharging this responsibility the S151 Officer must balance the needs and interests of both current and future taxpayers' and 'the responsibilities of the S151 Officer cannot be delegated'.

Doesn't that mean the buck must truly, and legally, stop with her? Could she not be prosecuted for dereliction of duty? Don't EU rules forbid public subsidies to ferry companies? And doesn't allowing unpaid debts to rack up to £3.3m before imagining that a company might be insolvent show a woeful lack of business awareness, to say the very least? She should do the decent thing and leave without passing go, without collecting a six figure payoff, and never darken our doors again.

In an interview with the Gazunder in June 2011, Ms McGonigal said: 'The flip side of risk is opportunity - and if you are overly risk-averse then you miss out on opportunity.' True. But if you take too many risks, and lose £3.3m of public money, I would suggest that the flip side is you miss out on the opportunity of keeping your job.