Tuesday 8 February 2011

An open letter to Secretary of State Eric Pickles regarding Lynne Hillans mismanagement of Barnet Finances

Sent: Tuesday, February 08, 2011 6:32 PM
Subject: FAO : Mr Lock & Rt Hon Eric Pickles MP Re Barnet Settlement

Dear Sirs,
I am writing to you as a Council Taxpayer in Barnet, a Business Rate payer and a long standing resident of the Borough. As I am sure you will be aware, the Leader of Barnet Council, Lynne Hillan wrote to you on the 17th January making the case for the Government to give Barnet additional funding, to meet its statuatory requirements. Whilst Councillor Hillan is correct to state that there is a massive shortfall in funding, she has been far less forthcoming about the causes of this. As the coalition government is keen to promote "Big Society" and engagement with local citizens, I felt it would be appropriate to give you a fair perspective on the background to the shortfall.
Barnet Council has quite demonstrably been mismanaged for the last 8 years by the incumbent Conservative administration. Borrowings have risen from £38 million in 2002 when they took over to a tad under £250 million today. Barnet council embarked on a reckless policy of borrowing money, to reinvest in schemes such as Iceland, which resulted in a total of £27.4 million being lost. On top of this capital amount, there was a budget shortfall due to the interest they expected to receive not being paid. I believe this figure to be in the region of £3.5 million. I am of the opinion that Councils should only borrow for capital projects with a verifiable return or short term bridging needs, under specific tight rules. Public sector employees lack the training and business skills to play the market in this way.
On top of this huge loss, Barnet Council also overspent £11 million on a bridge replacement project with an original budget of £12 million. This clearly demonstrated a complete lack of basic project management acumen. Another huge loss of £8 million has been incurred as a result of legal disputes with Catalyst, an outsourced supplier of care. As you can see, these sums alone add up to more than the shortfall Councillor Hillan has described. Let me just detail a few other areas where there has proven squandering of Taxpayers money.
* Approx £1 million on legal and other fees spent reopening Partingdale Lane to through traffic.
* Approx £1 million spent on legal and other fees regarding an inquiry into the botched sale of Barnet FC's ground
* £1.4 million on obsolete laptop computers, hundreds of which were immediately put into storage (with fully paid up warranties)
* The CEO salary for Barnet has risen from £114,000 per annum in 2002 up to £200,000 in 2010. Additionally several deputy directorships have recently been created with salaries in excess of £100,000 per annum
* A Council Tax freeze in 2010, despite the knowledge that the accounts were seriously in the red
* Huge rises in allowances for committee chairmen in June 2010, despite a pre election review being agreed at a lower rate
* Possibly up to £10 million spent/allocated for consultants reports etc, for the Future Shape/One Barnet project, with no savings delivered after 3 years of running the project
It appears that there are no qualifications required to run a Council, other than the endorsement of 51% of your political group on the council and an effective party whip. Councillor Hillan ran a company which went into liquidation in 2006, owing tens of thousands of pounds (much of it to the taxman). I would have thought that this would set alarm bells ringing within the local Conservative group, but they clearly feel she is the best qualified person for the job, having won two leadership contests.
Up and down the country, there are many well run councils of all political hues. I have been particularly impressed with the transparancy rules of Conservative Councils such as Windor and Maidenhead and believe this is a model for good governance. Sadly Barnet is at the opposite end of the scale. Recently details of Barnet Council invoices were published with details of payees redacted. This was done on the grounds that they were to private individuals. One such payment was later shown to be to a large waste disposal contractor.
Whilst I urge you to agree to a bale out of Barnet for the good of local services, I cannot possibly agree that money can be thrown at an authority as incompetent as Barnet Council without strings attached. In education, schools which fail are put into special measures. I believe that such legislation should also be available for failing councils. I would suggest that Barnet Council would be an excellent place to start. I would suggest that these measures are taken on explicit financial (not political) grounds and for a fixed period of time, to mend the budget. Councils should be able to avoid such measures by selecting a new team and enacting a suitable recovery plan.
The problems in Barnet could have been avoided by proper financial management and sound husbandry of taxpayers money, Transparency as implemented by Windsor and Maidenhead would go a long way to preventing Councils such as Barnet playing fast and loose with Taxpayers money. Whilst I agree with the concept of localism, it cannot possibly work if councils shroud themselves in secrecy. As such I urge you to use your powers to agree to meet Barnet Councils defecit, on condition that they appoint a new cabinet made up of people who actually know what they are doing. I would also insist on a fully open and transparent policy of management to be enacted to ensure that "difficult problems" cannot by hidden in the books in future.

Roger Tichborne

1 comment:

LBB said...

Spot on as always Rog. I'm sure you will but please post any sort of reply asap!