Monday, May 20, 2013

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.

47 comments:

  1. So Tony, who was in the TDC cabinet in March 2011?
    In case you cant remember Councillor Robert Bayford (Chairman); Councillors Latchford,
    Moores, Wells and Wise were the cabinet,

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  2. The Cabinet report for this can be found on the TDC website. What a mess.

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    1. James cant find the report you refer to. What was the date?

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  3. Shame TDC will also be paying for the legal costs, and teh costs of companies wronged in the live exports debacle. Seems that the evidence that TDC should have nothing to do with any business dealings grows daily.

    TDC should be FORCED to sell any property that has a value to business that needs professional management. It has no business of any kind trying to run profit making entities, or trying to manage the use of ANY property in Thanet.

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  4. It's quite as straightforward as you might think. The Port of Ramsgate plays an economic part in Thanet's economy and I believe that every reader would wish for a ferry company using it to be successful. However, businesses of all sizes run into problems and this was no exception, except of course it was a big one. So I wonder what you might have done over the last two years? Wind-up the business once it starts to struggle with its rents? Agree on a reduced schedule of repayment while the business was seeking further finance to continue its operation? I could go on of course but I think you grasp the problem faced by two administrations of different colours looking for a solution that might protect the economy of the port, see the growing bills paid and see the company survive and cross channel ferries continue.

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    1. Simon. It would be perfectly reasonable to agree to suspend the port charges until a partner could be identified and a proper business plan submitted, but not for three years. To secretly allow the debt to rise to £3.3M before taking any action or not as the case may be, is scandalous. Why was this not reported to Councillors when the debt had risen to £500K or less? Why did the current administration not immediately call time when they took over, over a year ago? Who was advising them? Mark Seed again?

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  5. Sorry Simon that does not wash. If port ramsgate is not viable without transeuropa ferries, and transeuropa ferries can't pay it's way, they both stop operating. A council using public money does not play commercial lender of last resort.

    I think you will find two administrations and a bunch of council officers in a whole heap of trouble

    DFL

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  6. If I still owned a one-man business in Thanet and if I failed to pay my dues and taxes and fines ... and ignored various bits of local legislation ... you can bet your bottom dollar that the 'authority' would come down on me hard and fast.
    Again I wonder if TDC cock-ups result from incompetence or corruption and wonder when the next one will be revealed or exposed?

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  7. "Port of ramsgate plays an economic part in thanets economy"..

    Have you ever thought of a career in politics?

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  8. Colin 0626Z,

    I take your point. I suspect it's incompetence. They are not bright enough to be corrupt.

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  9. Resignations of councillors and officers please.

    Anyone who has seen this debacle from the inside and has taken the conscious decision to keep it from the council tax payer has to be removed from council.

    Shame on you all for taking the easy decisions to placate tef and port ramsgate employees at the expense of everyone else. No consultation, just write a blank cheque.

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    1. Well that's what you get when you allow the CX to become the section 151 officer...all the decision making and financial control lies with one person at the Head of the officer group.

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  10. Imagine if you owned a shop, and you had one big customer. Everything depended on what that customer bought - the very existence of the business. Over time you notice he is getting a little shabbier, dirtier, not buying me clothes, holes in his shoes, but he's still buying. Then he tells you what you've been thinking - he's in financial trouble, not yet insolvent, but its coming soon. He still buys from you, your only customer, so you are thankful for the business. Then he comes in and asks for credit. What do you do? With everything you know, you've seen, do you give him what he wants knowing full well your cash flow has completely gone?

    You probably wouldn't. But that's what Tdc did, and they let home come back in the shop and clear out your stock every day for 3 years for nothing.

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  11. Anon 08:41,

    Have you seen this from the inside; and what evidence, if any, do you have to support your demand for mass 'shootings' in TDC?

    Who are you; would you deny TDC the right to face their accuser?

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  12. John,

    Simon moores clearly states both administrations were faced with a failing customer who would kill off the port. He know, and insinuates labour and Tory led councils knew. If the councillors know, officers knew.

    £3.3m loss directly attributable to the taxpayer because of the decision to keep tef afloat, consciously made by Tdc.


    This is why people should leave their posts.

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  13. Seeing Mr Hamilton’s comment that Thanet Council should have nothing to do with business dealings and that there is a need for professional management to run profit making businesses, and TDC’s “ PR Announcement” above stating “The council provided temporary financial support to Transeuropa following discussions in March 2011” well, the proof of the pudding is that in that same month Thanet Council allegedly effectively kicked out the only professional Port Manager they had for speaking out, being the long-serving Port Accountant of over 27 years, and straight away this £3.3 million debacle was allowed to develop.

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  14. TDC should take a leaf out of KCCs book. When KCC staff and councillors are out of their depth they admit it and call in outside consultants. Then if it all goes wrong they can blame the consultants.
    Clearly all at TDC in March 2011 were out of their depth, they were not experts in deciding whether ferry traffic would be sustainable in the future. Maybe they can tell us who they consulted and what documents they have to support their decision.

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    1. TDC officers admit they are out of their depth!! You must be joking.

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  15. How come this was not identified in previous years accounts, was the 151 officer negligent.
    you assumes the decision was on pink as there was not a hint of this in any of the papers or blogs.
    it may also explain why tdc invited the joline to use the port to export animals.
    Does the £3 million include the £1 million plus spent on dredging or is this an additional "loss"

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  16. Excellent article Tony: civil servants must be sacked. They're very expensive for multi-million pound failures and failing to encourage other businesses.

    We don't have to keep paying council tax for their salaries and pensions and cars and expenses and perks.

    Some FOI on those would be useful too.

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  17. This has got to be one of the worst cock-ups in Thanet Council history and there's been a few.

    The highly paid executives at TDC who oversaw and gave their legal and financial ok to this business arrangement with TEF are mainly to blame and to a lesser extent the totally out of their depth TDC Councillors who were in control of TDC in 2011.

    What is becoming more and more obvious is that nearly all the major problems at Thanet District Council are caused by the civil servants who ultimately have the biggest say regarding financial dealings and seem accountable to no one.

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  18. I think Simon Moores is suggesting that its nothing to do with him guv or indeed the ragbag that also govern or serve Thanet council

    Still if he and his ilk would see it as most commentators he'd be a little more reticent

    I think that 8:47 made a good point and the suggestion that their was a valuable benefit in operating the port by such a risky investment is cods wallop

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  19. I think there's some confusion over the facts creeping in here. My own recollection, is that when the Conservative administration left office, it had arranged a repayment schedule with the operator to deal with the unpaid port bills at the time, while the company searched for further finance from the banks etc. Subsequent to that and this has come as a complete surprise to me, that debt to TDC has ballooned to over £3 million under the present administration.

    That's totally unacceptable and I share peoples concerns over what has been happening over the last 18 months to deal with a growing debt to TDC. I'm hoping that we will see these questions answered by officers and the Labour Group in next week's extraordinary cabinet meeting but based on previous form with the likes of Royal Sands, I'm not optimistic.

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  20. Maybe Simon can tell us how much the debt was when TDC were first asked for help, how much it was in March 2011 and how much it was when labour took control 9 months later in December 2011. The cabinet of which he was a member had at least 9 months to get to grips with this and no doubt a lot longer before making the arrangements in March 2011. He and his cabinet cant wriggle out of this one. The external auditors need to take a look at this.

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  21. I do'nt have the figures but I am sure these will be in the public domain in time for the cabinet meeting. I would say a large enough figure to cause concern; ie they can't pay their port bill but not large enough for alarm, as in the figure revealed this week.

    You have to consider that the council was looking for a large debt to be settled. Its choice at the time was either wind up the operation and see nothing or agree on a repayment schedule subject to the operator's assurances that it was seeking finance.

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  22. I hope Simon is right and the figures will be in the public domain for the meeting.

    I think some of the imformation which needs to be made public includes:

    The date each bill was raised and when it was due to be paid by and the amount due and the amount paid (if any) and when.

    The amount put by in past years to cover the possibility that these bills would not be paid and how this was decided. Like a business, in view of the uncertainty surely a large percentage should have been put by rather than put on the Council's books.

    When Councillors were informed of the amounts outstanding during the period the debt built up and what action was taken.

    Who authorised this debt to build up at the various stages? Did they follow the right procedure?

    This would help to form a timeline for the decisions made.

    Also looking at it from the other side when were these pots of money being used to cover the debt first discovered? Were Councillors told about this money and if so when and how? Was it taken in to account when setting the council tax for this year and if not why not? Are there any cuts being made as this money is being used to cover the debt?

    For example I don't know anything about this New Homes Bonus but can £1 million be drawn down from it without it having any impact on services or doing one off 'nice things' in the area? Was there a plan to use this for something else? If there wasn't a plan to use it how can you have no plans for £1 million? Are there any other pots of money sitting around and if so what are they?

    Just some random thoughts off the top of my head and I'm sure there must be lots more that needs to be disclosed but hopefully you get the gist. The facts need to be in the open so a fair and informed opininion can be formed and importantly that we learn from any mistakes made.





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  23. After raiding the council coffers to pay off this debt the pot will truly be empty and using housing benefit subsidy, new homes bonus and unallocated grants is literally scraping the barrel financially and morally.

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  24. Morally? Please, this thread is about TDC.

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  25. There is a clue to the initial size of the debt when this came to a head in 2011 in the Agenda report pack for the meeting of the 28 May as found on the TDC web site.
    Basically the debt was to be repaid at a rate of £80k a month until 2014 and it is not stated but it can be inferred that this would not start until July 2012. Again the repayment period is not stated but it could be anything from 18 to 30 months. That would give an initial debt of between £1.4 millions to £2.4 millions.
    Maybe the council don't have the dates and figures otherwise they would have been put in the Agenda report pack and the members of the cabinet will find it very difficult to take a view on how the council got into this mess.
    Where is the independent chairman of scrutiny when you need a person not tainted in any way. Oh yes he has been sacked.

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  26. Sorry Anonymous 20:43:00 can you confirm what was the meeting on 28 May and was that in 2011 so it can be checked out?

    Surely the council must have the dates and figures otherwise presumably they could never be collected even if the company was viable as what would you say to the court? Something along the lines of I'm owed £3 million but I can't tell you when I billed it and how much I billed but trust me it's £3 million.

    Re: 20:07:00 - I thought the pot was empty before they found £3 miilion so let's have confirmation that it's really empty so if money is suddenly discovered in future we can refer back to this answer and hold people accountable if necessary. Don't set such a high council tax if there is any spare money in the pot.

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    1. Anon 21.06 the meeting is actually on the 29th next week. The adgenda report pack contains the info, sketchy though it is. TDC Extraordinary Cabinet meeting 29 may 2013.

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    2. link above does not work try this one
      TDC Extraordinary Cabinet meeting 29 may 2013.

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  27. The vast majority of Councillors were not aware that TDC was allowing the ferry operators to build up a massive unpaid bill. Senior officers and party leaderships of both parties over a 3 year period kept this secret from backbenchers. In my opinion this was almost certainly a major breach of constitutional rules. There should now be an external independent investigation into who decided what and when and what constitutional rules have been broken and by who. Efforts are now being made to requisition an emergency meeting of the council where a motion can be discussed to launch an investigation. I have made a complaint to the District Auditor. This is an extremely serious situation which reflects incredibly badly on how Thanet Council is managed by officers and politicians. Its time for a change Ian Driver

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    1. There is no excuse for Councillors not knowing what was happening. Group leaders from all sides should be kept up top speed on everything. If Councillors then want to see any documents they have a specific right under section 100F of the LGA 1972. Surely Bayford and Hart informed their own Members. Doesn't say much for Cllr's working together if Leaders dont even inform their own members. Shame Bayford and Hart don't attempt to set the record straight on blog sites.

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    2. Best of luck Ian. The problem you will have is that too many officers are now compromised having being bullied by Councillors hell bent on achieving their own ends for years. The whistle-blowing policy is useless and they now have to stick together to cover each others backs. Ezekiel wasn't the only Councillor to 'lean' on officers to get their way. One particular Member reigns supreme by bullying officers to the point of them having to lie repeatedly to cover up misdemeanors.

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    3. I used to work for Thanet Council and what you say is true. Some Councillors are certainly bullies and some are sexual harrassers. One of my bosses at TDC asked me to distract a certain senior Councillor and stop him leering and getting close and personal with women officers. He has recently become an influential KCC Councillor. An important trade unionist at TDC was also a sexual harraser. I reported him but to no avail.

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    4. Close to libel, Ian, for there can be no prizes for guessing the names of those councillors you are referring to. I thought there were rules about maligning your fellow councillors or do they not apply to you?

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  28. Wouldn't the District Auditor be aware of this to some extent when checking the books for 2012?

    The statement refers to discussions in March 2011 so one could reasonably assume that the debts would have been quite large by March 2012 so wouldn't an auditor have considered this when seeing whether the books were correct? I thought that if there was uncertainty about money owed coming in, a business would not be able to put it all in their books so an auditor would check this out bfore giving their view.

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    1. We now know from the recent press release from Cllr Hart and co that when they took office in Dec 2011 the debt had reached £1.7 millions. Looks like for the last 18 months only half of the rent due was paid.

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  29. For Councillor Driver to say there should be change is rich coming from him - he has been politically all the colours of the rainbow since he was elected for Northwood Ward at the last election -and has done his constituents no service at ALL WITH OR WITHOUT MEGAPHONE -the man is a joke politically and why the BBC keep drumming him up from the depths I cannot fathom - his record of consistency on one subject is abysmal - he is a political frog leaping from one leaf to another as the mood suits him.

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  30. Cllrs being misled is nowt new. When the massive contamination over 30 years, by Sericol, was discovered in 1993 what were Labour cllrs told at TDC ? That due to red staining of chalk a leak had been discovered before it had time to penetrate the aquifer.

    An FOI by Richard Card a few years ago revealed the truth. Massive tonnages of cyclohexonone had leaked into aquifer for 30 years. The red staining of chalk layers was due to the secret post 1993 remediation project. The Environment Agency admitted that Sericol contamination will remain a problem for the foreseeable future.

    In 1998 Sericol held inquiry into suspected forged engineering qualifications amongst its workforce. 16 years after the conviction of Cllr Cyril Hoser for forgery.

    Shortly before ex tory Cllr Maison was due to face high court (to be found guilty of libel) Sericol gave him severance. What did Planning cttee TDC stalwart and member of Kent Police Authority Bill Hayton tell the High Court on oath ?

    Thanet tories may cry foul and try to dupe people that the Hoser conviction is not topical.

    Forged firearms certificate anyone ??

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    1. Usual old rubbish, Rick. Don't you have any other records because this one is seriously worn.

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  31. Councillors don't know the ferry costs? they certainly won't know about Sericol and Thor. And do less - they're sheep to be led by the officers and their party leaders. That's why most votes are unanimous.

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  32. How different things might have been with you at the Council's helm, Tony. Oh no, your views, opinions and far right of centre policies (curiously badged as Liberal Democrat) were rejected by a humiliatingly large percentage of the electorate, weren't they? But still you drone on...

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    1. Says nameless wonder who could be anybody, from clueless Clive to bumbling Bob, or hopeless council officer either way, Thanet has lost £3,300,000.00 still we just KnoN that none of the above will lose out and I guarantee that crazy decisions and incompetence will reign whether business is conclude down the lodge or in committee.

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  33. Who is the Thanet LibDem Leader now there's Tony etc? What do they say? The Greens have been revitalised a bit but the LibDems are invisible.

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  34. I saw from the other blogs about a protest outside TDC before the cabinet meeting Wednesday. Wonder if the BBC will be there!?

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