Transeuropa torpedo Thanet council finances

Now there's a surprise the recent demise of Transeuropa ferries is going to cost Thanet council 3.3 million pounds.

It seems that the entrepreneurial brains of Thanet council thought it a great idea to prop up the ailing ferry company back 2011.

The grisly details of this debacle are attached, to be honest I don't have the stomach, as always the victims of local authority, dabbling in the entrepreneurial world, will be those who can least afford it as housing benefit funds have been ear marked for plundering.

As always you can be sure that staff pensions are safe, free priority parking at Mill lane and no doubt from time to time the upper echelons jollies to meetings and seminars.

Does it matter, well only if you pay tax, still the cost spread over the population of Thanet works out at around twenty five quid each.  I wonder if a full detailed report will be issued to us the paying public naming and shaming those responsible. I doubt it Clive Hart was recently featured in the local paper bemoaning, people daring to ask, as their right, for honest info from the council.

TDC P R announcement

Transeuropa outstanding debt

Cabinet members at Thanet District Council are to consider how to tackle an outstanding debt of around £3.3 million from Transeuropa, the ferry company who recently ceased trading out of Ramsgate Port.

At their meeting on Wednesday 29 May, members will be reviewing the council’s debt position with the now insolvent company, and will consider whether to approve the use of funding identified by the council’s finance department to deal with the debt.

The council provided temporary financial support to Transeuropa following discussions in March 2011 which made it clear that this support was needed to ensure the on-going future of the business. This temporary support was subsequently extended until an investment partner could be found. Although an investment partnership was entered into in November 2012, the promised funding was not released and ultimately led to Transeuropa ceasing operations.

Although the council will take whatever action it can to chase the debt, and has already lodged this debt with the company administrators, good accounting practice means that the council needs to provide for the debt in full within its 2012/13 statement of accounts.

 It is proposed to use the following sources within 2012/13 to fund this debt:

• A sum of £1m has been identified in respect of prior year adjustments to housing benefit subsidy. This is a highly volatile budget due to the impact on the subsidy of increases in caseloads and errors in benefit calculations and so normally any underspend would be put into the Customer Services Reserve to mitigate any future overspends. However, the current balance in this reserve is considered appropriate for this purpose and therefore this budget underspend can be utilised to offset the Transeuropa debt position;
• Unallocated unringfenced grants of £92k have been identified;
• A balance of £43k remains on the Housing and Planning Delivery Grant reserve which is unallocated;
• A sum of £1m will be drawn down from the New Homes Bonus;
• Savings in the cremator project of £196k will be utilised;
• Carry forward budgets of £257k from prior years have not been utilised and will therefore be taken to offset this debt;
• A sum of £200k will be taken from the Priority Improvement Reserve which will still leave a balance of £405k to support invest to save and one-off initiatives;
• A sum of £196k will be taken from the VAT Reserve;
• The bad debt provision has been reviewed and a sum of £200k can be taken to contribute towards this debt.

The above funding sources give a total of £3,186k. It is anticipated that the balance of the outstanding debt could be covered by the councils underspend for 2012/13.