Friday, May 24, 2013

Ferrygate - Why Did They Pay The Ferry Man?

Today's extensive Ferrygate coverage in the Gazunder sees Thanet Council's Chief Executive, Sue McGonigal, make this ludicrous statement: 'The council takes its role to protect public funds incredibly seriously and will do all it can to recover the money owed.'

Really? Then how come she didn't manage to 'protect' the £3.3m in the first place??!!

In every other business I know of, it's drilled into the employees that they must treat the company's money as if it is their own. Thanet Council is the only outfit I've come across where the money is actually their own (it comes from their taxes as well as ours), but the employees spend it like water!

Anyhoo, one of my regular readers has emailed me this list of very pertinent questions. Comments on the usual postcard please!

The front page of the Isle of Thanet Gazette today quotes the Chief Executive of Thanet Council as saying: 'The council entered into an agreement which would see the recovery of the debt in full by 2014.' Then on Page 6 the paper writes:

'The debt accrued over two years following a secret agreement which allowed the firm to defer port fees.'

Where is this agreement? Why has it even now not been published? Why was it done in secret? What other secret agreements has the incompetent executive of the Council entered into that, like skeletons, are waiting to fall out of the community chest? There needs to be full and immediate public disclosure.

Hasn't the Council's lawyer and Head of Legal Harvey Patterson heard of the expression 'not worth the paper it is written on?' Why did he and the executive who is ultimately responsible for protecting the public's funds, namely the Council's Section 151 Officer Sue McGonigal, bind local tax payers in an agreement with TransEuropa when common sense, let alone due diligence, if they'd undertook any, would have told them the other party was offering no security for the debt already incurred, let alone the debt to come? They knew full well Transeuropa had no assets at all in the UK, and were on notice that Transeuropa were most likely already insolvent! 

Such an agreement was only going to benefit Transeuropa, and be detrimental to Council taxpayers. The 'sub-prime' lending that took place prior to the global financial crash looks cautious by comparison. When will these executives pay the price for squandering public funds?

It is no defense to claim there are other budgets available within the Council to cover these massive losses. The reserves of the council, or money somehow conjured up from the failed budgeting of the council (which is also under their control), are not there for the executives to play secret games of poker with.

28 comments:

Anonymous said...

This is like kicking balls into an open goal really.

There is nothing right about how the council have acted. Completely indefensible. But my god they're squirming and wriggling and making excuses.

Pop over to Thanet Life kids for a lesson on 'how not to run your business - when debits don't really exist'.

Anonymous said...

Ah but watching the council squander money as most elements of the civil service are prone, nay targeted, to do is preferential to privatization remember. Don't veer to the right Dicky!

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Anonymous said...

It does show the councillors that the civil servants will drop them in it - yet do everything to continue with their salaries and pensions.

Councillors should remember to sack more civil servants more often.

These ridiculous shtum payments need to end, full FOI and a blacklist for future civil service jobs.

The next scandal will be Manston monitoring and fines and tax breaks.

Anonymous said...

I guess the next big question is which other businesses TDC has been covertly supporting by not collecting what's due. I can think of a couple of other large ones which have been touted as being essential for economic regeneration.

Anonymous said...

Simon Moores is still staying its not real money as it was never received. Try and work that one out.

If that wasn't real, does that mean the £1,000,000 from the housing fund was not real as well? What about the people employed at the port to manage the ferries. Maybe they don't exist, therefore they haven't been paid for the last 3 years into their virtual banks.

Hey, I'm an anonymous poster. Perhaps I don't exist, and this is being written by some phantom blog poster trying to sell huge dildo's to the world.

But I am real, I live in Thanet,and this week I really did have to pinch myself at the unbelievable stupidity of councillors and council officers.

I hope everyone one of them gets the boot and has to find employment in the real world.

Simon Moores said...

Very simply. It was a paper debt of £3 million not money that the council actually had in a material form sitting in a bank somewhere.

Foreclosure would have meant the Council would have realised little or nothing as the Chief Executive points out, an attempt was made to claw back as much as possible by re-scheduling the payments. Ipso facto, she is saying something is better than nothing as I'm sure you might agree.

Michael Child said...

Anon 5.17 I am with Simon on this one, you are making the fundamental mistake of thinking the £3.3m was money the council lent to the ferry operator to keep their business afloat.

What this was, was mooring fees that the ferry operator should have paid the council but couldn’t afford to.

In very simple terms this equates to shop rents in our towns and factor which equates to Westwood Cross and the internet market that has caused so many of our shops to close, with the ferries this is the channel tunnel.

Obviously the ferry berthing facilities have been significantly under used since The Sally Line pulled out.

So suppose the council owns five large shops in the middle of Margate, four are empty and the other is trading with difficulty and paying a rent of a £1,000 per week and the company running this shop go to the council and say we can’t afford to pay the rent, but we hope to get an investor who will finance our business so we can pay it off eventually.

Obviously at any time the council can make the company bankrupt by demanding the money they are owed straight away, but this will only result in five empty shops instead of four and no money.

Anonymous said...

Saying it's a paper debt is a bit like saying the council tax we pay is a paper debt so if we don't pay it, it doesn't matter. Of course it wouldn't matter if there were no plans to spend it.

To me the important thing is to adjust how much you are spending until you know the paper debt becomes real money or to make sure you've got money put by to cover it.

A lot of the money being used to cover it appears to have arisen more by luck than judgement which if so is a worry.

If non essential spend is now being frozen that would seem to indicate that more should have been done earlier when the debt was being built up.

Councillors jobs seem to be being made more difficult by not making them aware of such major issues. If more were aware of this, then surely the budget would have been much different.

Anonymous said...

er.. but there was no money coming, it was obvious two years ago there was no money coming and if it was all paper money and "not money that the council actually had" why has the chief executive of the council only just after two years called for an immediate freeze on 'non-essential' spending in the light of the TransEuropa debt disaater, why was no provision made in the accounts, why is there no comment in the notes to the audited and signed-off accounts, you cant have it both ways.

Anonymous said...

Anon 6.49 is right. With no or little money coming in from TEF why did TDC not adjust their budget 2 years ago? How much did TDC spend in those two years such as dredging, power and supplies and keeping staff on to maintain the service to TEF?

Anonymous said...

I see Messrs Moore and Child are advocating one solution to the degeneration of our town centre High Streets. The on-street parking charges are as agreed by the full council but people can't or won't afford them and the towns die, but the new doctrine says this money has not been received by the council, it isn't real money and you can't afford it so just don't pay, that way TDC waive the parking charges to ensure increased business in the towns and protect the jobs there and unlike the port where all the running costs have been continually incurred, they could do away with the admin and maintenance of the Pay and display system, double benefit, kerching!

Anonymous said...

6:49 has it spot on and Simon Moore is defending the indefensible. You can't plan to spend the money if you know full well that you are unlikely to receive it. In fact, if the potential losses were not disclosed in the council's accounts there is a case for saying that false accounting has taken place, and that is a very serious matter.

Anonymous said...

Of course anon 8.20 could have extended this to the more serious matter of Council Tax. Instead of the Council pursuing people old and young in financial dire straits through the courts and potentially to jail for a few hundred quid, people should be able to plead the "Moores-Child defense" that they have not paid their Council Tax it is just a debt and not real money, and moreso than the port or on-street parking, it is hard to see any costs of the council directly attributable to any individual dwelling. Instead of making the lives of the poor UK residents a misery, let them off like the foreign shipping line and write off their debt to some millions of spare budget nobody was told about two years later.

Anonymous said...

Yes thank you 8.33 one presumes the Council's chief executive cum section 151 officer signed off the 31 March 2012 accounts, as would have the auditors who it is alleged by the council were kept fully informed of the situation.
It is hard to see how anyone reading them would be able to pick up on the actual situation. I am not aware of any "secret deals with foreign companies override" when it comes to financial reporting in local government.. but this is Thanet.

Anonymous said...

Shall we put it another way.

Lets say I wanted someone to fly over my house with a air banner making a proposal to my girlfriend. I called Simon Moores, and asked him if he wanted the work.

He would drive to the aerodrome, check his plane, fill it with fuel, pay any take off/landing fees, set up the banner, fly live the right place, land, drive home etc.

Simon would budget for the fee i was paying him, then splash out on Fuel costs, time costs, simon probably has an accountant, taxes to pay, regulatory obligations, airport costs, training. All real costs to Simon to offset against the fee.

Then i don't pay him.

What situation so we have here? Real costs, or paper losses? I know what his accountant will be thinking as he charges up his red pen, putting his company into a real loss.

Simon's business offers a service which needs to be paid for to at least cover the costs of doing business, with a bit on top to make him some profit.

No pay, no business. But if the business continues to run, offer the service, fuel up the plane, then it's costs, costs costs, losses, losses, losses.

The port of ramsgate was no different, except of course the entity running it is our lovely council who have no concept of covering costs and profits. They have a bottomless pit of funds to draw on - yours and my earnings.

Budgeted receipts that don't turn up and operating costs equals losses attributable to the shareholder.

That's us.

Anonymous said...

Michael, I think you are a wonderful attribute to the area and your tireless efforts on taking the council to task on issues is admirable.

I think you've got your sums wrong on this one.

Imagine TDC pulled the plug in march 2011, assuming this is when TEF stopped paying them. What would have happened?

The nome stream would have stopped, as it did anyway.

Operating costs at the port would have gone down as people associated with the ferry operation would have unfortunately lost their jobs. This was and is unavoidable.

TEF would have been in administration with less debts than they have now. Potentially easier to find a buyer?

TDC cold have started looking for a new operator, or in the absence of any, started working out new uses.

Accounts for 2010/2011 and 2011/2012 would have been correct, showing the income stream stopping, and costs lowering.

The budgets for 2011/2012, 2012/2013, and 2013/2014 would have been correct.

TD.C would not have to use funds earmarked for reserves or homes to offset a huge loss.

If you think the situation we find ourselves in now is an acceptable alternative, perhaps the council should find some employment for you.

Unknown said...

Now imagine you live in Thanet. It's a lovely place, fine beaches, invigorating sea air, fabulous architecture and heritage, even acres of suburbia for the people with little visual sensibility and a craving to cement over gardens and tarmac arable land so that they can drive to their shops and buy cheap crap made in death trap factories from far away lands. The people get the government they deserve, and in the main they don't give a toss, why else has this septic isle voted in UKIP. "Ferrygate" is an appalling scandal but unless people come out and demonstrate their contempt for the management this is just another soon to be forgotten episode in a long running "you couldn't make it up" saga. Deeply depressing and the casualties are yet again the residents especially those who do give a toss.

Anonymous said...

If you organize it then I'll be there!

Anonymous said...

A tax strike with demonstrations is always effective. No tax, no civil servant or councillor salaries.

Cancel the direct debits. Refuse to pay. Pay it late. Pay it wrong.

Cancel the direct debit again.

Add in a councillor boycott/refusal of service of shops/pubs/banks etc and they'll learn.

A Police inquiry will jail the worst of them not just Sandy scapegoat.

Government is by consent for the good of all not these puffed-up idiots.

Simon Moores said...

All which of Mr G. illustrates why the great majority of Councillors are reluctant to engage with weblogs. Which is a shame!

Peter Checksfield said...

Here we go, yet another person anonymously calling for a council tax strike (or is it the same person on every Thanet blog?)... Why not actually do something yourself, perhaps starting a blog / a Facebook group / leafleting / etc?

Anonymous said...

Peter, forget it.

Anonymous said...

protest about this on Wednesday 6.15 at outside TDC

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Anonymous said...

Get down to TDC offices in Cecil Square Margate on Wednesday evening and tell them in no uncertain terms that you think the way the council is run sucks and secretly subsidising a foreign ferry company to the tune of £3.3m meaning that the ordinary people of Thanet have to lose out on services means that council officers like chief exec Sue '£100K+ per year' Mcgonigal should lose their jobs too.

Anonymous said...

Well I'm xalling in from Clifton. Vile again. Since my last comment the grass is another foot longer. Vs till not cut. Perhaps between this , cutting lam posts in half for scrap metal and cutting down all the trees the council will get their 3 million back in say 50 years

Anonymous said...

Sounds a bit rough over there in the .Vile 1106!