Where have all the Tories gone?

I suppose I should be pleased. Whilst the rest of the Country is developing methods of dealing with the recession suitable for 2009, the Barnet Tories have decided to go for a solution based on 1970's Socialist thinking. The Barnet Tory cabinet have put together a paper called "Dealing with the recession in Barnet"


http://committeepapers.barnet.gov.uk/democracy/reports/reportdetail.asp?ReportID=8578

So why aren't I jumping up and down and saying, "Wayhay, Mike Freer has seen the light", because if you read the report, that's what you'd expect.

Well, you see, there's just one problem with this report. It's complete b*ll*cks. There are plenty of platitudes in there which sound fantastic, but when you compare them to what the policies and objectives of the council are, you realise that it's a complete whitewash. An attempt to pretend they are doing something and they care. You see, at the moment they are pushing through a scheme called Future Shape. They are trying to dress it up to be something else, but it is really all about cost cutting, job cuts, outsourcing and money saving. A prime example of this stupid scheme is the plan to remove wardens from Sheltered housing schemes. This means that many people who currently live independently with the odd warden visit, will have their warden removed. Without this security they will have to move into homes, often at the Council (ie you and me) expense, with full residential care.
As for the wardens, the council plan to sack them and throw them on the dole, in the middle of a recession. In Mike Freer's report he states that one of the goals is as follows :-

Local Employment Partnerships: The Council are working with JobCentrePlus on local employment partnerships (LEP) where vacancies are advertised through the job centres to maximise employment opportunities with the Council for local unemployed residents.

So lets get this right. You chuck wardens on the dole, then get the job centre to try and find them something else?

Another classic line in the report :-

Continuing to work closely with private sector landlords to ensure that there is adequate supply of housing in the private rented sector (given that theprivate rented sector now provides more homes for homeless people than the council and housing associations sectors combined). To date, there has only been a very small increase in homelessness in the borough.

Let me translate "Because we've been so useless at providing decent, affordable housing, we now have to pay over the top rates to private Landlords on a humungous scale". As to the sentence about a small increase in homelessness. This is Great Britain in 2009. We are one of the worlds richest economies. Any rise in homelessness is abject political failure.

Another classic :-

Signposting/Publicity for recession support - A webpage, ‘Bright Ideas’ (http://www.barnet.gov.uk/bright-ideas.htm), has been set up on the council website to offer businesses and residents practical tips, for example on managing cashflow and advice on debt and borrowing money, and help to mitigate the worst effects of the recession. It is being redesigned to specifically respond to the results of the Citizens Panel survey and focus more sharply on the information that residents have said they would find useful in assisting them to adjust to a fall in income, including advice on saving money, reducing energy consumption and on free activities.

This is rather rich coming from a Council administration which has increased borrowing by 8 times since they took over from the Lib/Lab's in 2002. I was quite interested in how to manage my cashflow better, so I followed the link on the Bright ideas website and it took me here :-

http://www.creditmanagement.org.uk/berrguides.htm

If you click on this link, you'll see that Mike Freer's advice for anyone with cashflow management problems is to ASK PETER MANDLESON !!!!!

So there you have it. If you want to beat the recession and you think Mike Freer is the man to help you, then you'll end up being lectured by Peter Mandleson on how to run your business. Now I'm sure that all of the guides Peter recommends are full of the finest advice that Taxpayers money can buy, but I do wonder - in Barnet, where have all the Tories gone?

Beating the credit crunch the organic way !

Are you feeling credit crunched this morning? All of those bills piling up & the wage cheque going down? Are you thinking of ditching the Waitrose Organic & going for the ASDA own brand instead to save a few pennies?

I was having a chat yesterday with a good friend and she asked me a very interesting question. What was the tastiest Tomato I'd ever eaten? Strangely enough that was a really easy question to answer. My Uncle George used to grow the best tomatoes in the world. His secret? If ever he went somewhere & had a really great tomato, he'd save a few seeds and grow them in his back garden. He'd then cross pollinate them with other tomatoes to produce even tastier ones, saving the seeds from the tastiest plant for next year. Over many decades he'd developed the finest tomatoes it is possible to eat. Sadly he passed away 20 odd years ago.

Thing is though, he'd grow most of his own veg in a little plot at the botom of his garden. George was a builder and a busy man, but he'd always spend half an hour a few times a week tending to his garden. I asked him once if he did it to save money. His response. "Well, sure it saves money, but I do it because it's the only way I can get decent fruit and veg". If George was having salad for supper, he'd go down the garden and choose the pefectly ripe items. Best quality guaranteed. He also told me that he found it very theraputic after a long day dealing with stroppy customers, to spend an hour away from it all tending his patch. He once said, "It's that or the pub and the garden is much better for you". Mind you he'd usually have a scotch when he'd finished.

I saw a very interesting article on Time about organic gardening in the USA. As we all have less money to spend, we maybe have a bit more time on our hands. Given that a bit of vegetable growing is both relaxing and a good way to save money, this is one sector where the credit crunch might be rather good for business.

I thought I'd google - "Organic Garden Centre" London - just to see how many specialist centres there are in London. Guess how many came up? None. There is a massive business opportunity for someone to fill a gaping gap in the market. I know that there are plenty of fine Garden Centres in London, but I've always believed the secret to success in business is to do things a bit different and find a niche. Given that people pay twice as much for organic veggies & drive miles out of their way to get them, I suspect a totally organic Garden Centre, run by experts would soon attract a massive following. There would also be a great opportunity for a bring & buy style exchange.

Any city boys out there sitting on a big payoff & wanting a change of lifestyle & ethics, give it a thought.

Barnet Council - Why they lost £27.5 Million in Icelandic Banks

One of the better things that the Labour Government has introduced is the Freedom of Information act. Before this, if you asked the council a difficult question, they could ignore you. Although it is flawed, now they have to either tell you or give you a good reason not to (ie security, damage to commercial interests etc). If you don't like the answer, there is an appeal process. Once you ask, they have 20 working days to respond.

Much of the information that appears on blogs such as mine comes from these requests. The downside of the system is that often, by the time you get what you asked for, the story has moved on. Just very occasionally though as you are watching one story disappear into the distance, another one pulls up next to you and your FOI request becomes even more interesting. When I was blogging for the Edgware Times, it became apparent to me that as soon as I posted a blog saying something nasty about the council, the editor, Phil Crowther's phone rang. I asked whether councillors sat around watching the Times website all day to see if I had posted something. Amused by my egotism, Phil replied, "No, Barnet Council media department have Google alerts so that any story relevant to the council sets a whole host of pagers beeping" or words to that effect. Now I know various commercial organisations and banks used Google alerts, but I hadn't considered that a council would (yes I know, silly me). I immediately posted an FOI request to see what words the council had on their list to get the pagers going. I expected a 20 page list, detailing all sorts of things which may affect Barnet and that the Council would want bringing to their attention for investigation. What did we actually get. Here's the actual list :-


London Borough of Barnet
Barnet
Barnet Council
Mayor of Barnet
Leo Boland
Brian Reynolds
Councillor Mike Freer
Councillor Matthew Offord
Councillor Lynne Hillan
Councillor Melvin Cohen
Councillor Brian Coleman
Councillor Andrew Harper
Councillor Anthony Finn
Councillor Fiona Bulmer
Councillor Helena Hart
Councillor Richard Cornelius
Councillor John Marshall

Now if I'd received this list two weeks ago I'd probably have looked at it and discarded it. Thing is, many things have happened since then. I've done my level best to find out what you need to do if you want to avoid situations where you lose all of your cash in dodgy banking schemes. I've tried to find out what a finance department, with directors on huge salaries should put in place. I've tried to find out what a pro-active organisation does so that it can see the smoking wreck on the road ahead in time to slow down and avoid the crash.

Here's the issue. If I am the finance director at Barnet Council and I have £328 Million quid to invest, how do I make sure I put it somewhere safe? Well there are all sorts of organisations which rate various finance companies. The first thing to do would be to draw up a list of companies rated as secure (ie not going to go broke). Having done that you check the various deals and try and spread the cash around a few (not all your eggs in one basket). Now lets give Barnet the benefit of the doubt and assume they did all of this (it says they did in the report on the crisis). It says that they have deposits in 31 different institutions. So you have £328 Million in deposits in various banks you believe to be secure. What do you do then?

Well this is where I think I've got a world exclusive and you dear reader, may well be the first person to share this with me. If it was me I'd set up a few Google alerts for the institutions I've invested in, so that if any information comes to light on the internet to say they may be dodgy, I know straight away. My FOI request also told me that the council have a full time officer monitoring the internet on pay grade 34-37 (£29,286 - £31,419). Now I personally would have thought that his time would be better spent sifting through financial alerts than seeing if the fact COUNCILLOR RICHARD CORNELIUS opening a vegitable show in BARNET had made page 13 of the Burnt Oak Times website.

Councillor David Boothroyd, a Labour Councillor in Westminster, prepared a briefing paper on all of the warnings about Icelandic banks (for his own council) and kindly sent it to me. Now it appears to me that between 2005 and April 2008, there were multiple serious warnings that should have been picked up and escalated by Barnet. In the briefing, Councillor Boothroyd states that in April 2006 Arlingclose, an investment advisory company employed by 45 Councils issued advice to withdraw funds from Icelandic Company's. In December 2006, Moody's agency stated that Icelandic Banks may experience Liquidity problems. In March 2008 both Moody's and Fitch issued warnings. Also in March both Perth and Kinross and Surrey Council removed the Icelandic banks from their approved investments list. It seems that Mike Freer's assertation that "No one could predict the Credit Crunch" was a statement born of ignorance, for the want of a few Google Alerts.

Yes, I know that in reality, it's far more complicated than that. I have, however read the Barnet Council Cabinet report on the issue and there is not mention of monitoring of investments. There is nothing to say that any scheme of due diligence was in place to ensure that what was true 2 years ago is still the case and good investments are still good. The report says that they will, in future, tighten up the rules on deposits and put smaller amounts in banks with higher ratings. What I can't see anywhere is anything to say how regularly these policies will be reviewed. There is nothing to say we'll ensure that all investments are monitored. So the hole which knocked the wheel off the truck, still hasn't been filled in. If they check a bank with Moody's today to put £10 Million quid in, a warning is issued tomorrow, how will we know not to actually bank our cheque on Monday. My point is that with these huge sums of money, we need to be watchful all of the time.

I will part with this thought. If I was in charge of the council's finances and I'd read any of the warnings on Councillor Boothroyd's list, I'd have run a mile from any Icelandic investments. A simple Google alert would have done the job.

The Credit Crunch - Barnet Council - Where has the Story gone

As far as I am concerned, and from what people are telling me, there really is only one local news story at the moment in Barnet. The council may have lost nearly £30 Million investing in Icelandic banks. Now I've searched high and low to find out how this may affect me. The best source of information I've come up with on my trawl of the internet is at Lib Dem Councillor Duncan MacDonald.

He has published a Q&A sheet put together by Barnet Council on his blog. The most revealing Q&A is the last

What is the worst case scenario should the money be lost and the authority not compensated by Government?

The Council does not get any of the money invested back and has to write off the amounts invested to the general fund, pension fund, housing revenue account and capital programme. In the event this occurs, the Council would have to take actions to mitigate the losses in each of these areas.

This has massive implications for everyone. Council Taxpayers, staff in the Barnet pension scheme, Council tenants. Now it clearly states that this is the worst case scenario, but it scares the hell out of me. It seems to me from the briefing sheet that the only hope is that the Central government will bail Barnet out. If this does happen, clearly it will benefit all of us Barnet residents, which would be good. The only trouble is that all of the residents of councils such as Brighton & Hove which did proper risk assessments and pulled out of Iceland would be punished by central Government through increased central taxation. How would you feel if you were bailing out Brighton, when Barnet had been prudent.

I've already shown that Council Leader Mike Freer's assertion that no one could foresee this situation is incorrect. Mr Freer worked for many years as a banker, so you think he would have had an inkling. Lets have a look at a few early warnings about Icelandic banks.

September 2006 - Euromoney notes that Icelandic banks are potentially vulnerable. Debt was 167% of GDP.

21 Feb 2006 - Rating agency Fitch changes the rating of Icelands sovereign debt from Stable to Negative because of a current account defecit of 15%.

December 2006 - Standard and Poor downgrade Icelands sovereign debt rating.

August 2007 - The Subprime mortgage situation provokes Stock market Decline.

November 2007 - Standard and Poor puts Iceland on watch for Downgraded assessment. The FT write "Some investors are now wondering whether Iceland could be heading for a bout of financial turbulence".

Jan 2008 - Moody's rating agency puts all Icelandic Banks on review for possible downgrading. February 2008 - It cuts Landisbanki's long-term rating.

31 March 2008 - Kinross Council removes all three Icelandic banks from its list of approved Investments.

I could go on, the pace of the warnings really hots up from April onwards. The question is, at what point should Barnet Council have recognised that Icelandic Banks weren't a safe place for it's deposits. At what point should the Barnet Finance team have started saying "This isn't a good place for our staff's pensions & other cash".

At the very least, briefing papers should have been produced and there should have been some discussion as to whether this was a sensible strategy in full council.

Now there are thousands of people in Barnet who want to know what is going on. Many of us are worried about huge council tax rises. Where do we find out. Well there is Councillor Macdonalds blog, but what about the more mainstream sources of information. I would have thought that the questions and Answers (and much more) would be front page on the Barnet Council website. Well it isn't even mentioned at 18:38 on Monday 13 October as I write this. What about our esteemed local paper? How have they covered the story? What does the Edgware/Barnet/Hendon/Finchley Times have to say.

Well there is a story dated on Thursday 9th October, but to be quite honest, there is more detail on Councillor MacDonald's blog. One rather strange thing is that there are a whole plethora of new stories posted today on the Times website, about such exciting things as a break in at the Bowls club, and a 70 year old pensioner trying to meet his sweetheart, which are given more visibility. In fact there are so many new items that the story about the Icelandic banks has been knocked off the first page of not only the homepage, but also of the news page. Now far be it from me to criticise the Times editorial policy, but surely they realise that the Icelandic Bank story is far more important to us, it may well hit us all very hard. I'm not a conspiracy theorist, but it seems bizarre that the story hasn't been followed up and has been relegated from the front page so quickly, with a sudden flurry of shall we say, rather uninspiring stories.

Now far be it from me to tell the Editor of the Times, Phil Crowther, how to do his job, but let me explain what I would do in his place. Firstly I would have recognised that the situation at Barnet Council is a massive story. Secondly I would have made it my reporters top priority to find out everything they can and put the other stories on the back burner. Thirdly, I would have had a credit crunch update as my top story. I would have posted all new, public domain information onto the website as it emerged. If nothing else, I would have at least given sketchy outlines, so my readers anticipate the full edition of the paper. The details of the development of the crisis are not hard to find out, the briefing note from Barnet is on Councliior MacDonalds website. I found all of this out when I finished doing my "real job" so how hard could it be for a team of trained journalists. Maybe they just haven't realised that the world has moved into the 24 hour rolling news age and we use websites as our primary source of information. If they want people to view their website and newspaper with credibility, they have to have up to date stories.

Now I hope Phil proves me wrong and there is a massive 9 page expose in the paper. If there is I'll send him £20 to buy the boys and girls a beer. If there isn't I will pour myself a nice large glass of Bushmills Whiskey, pick up my guitar and compose a sad lament to "The Spirit of the Times" - Over to you Phil