Tag: bad economics

It seems that Mr Bluh does not understand what the role of a local council is. Primarily councils exist to provide services, such as social services and education. At their core are services taken over by councils as the Poor Laws were reformed, then abolished and replaced by the welfare state, plus a few other tasks inherited from the courts.

One thing that has never been at the heart of council business is commercial speculation. Mr Bluh seems to be unaware of this.

This is a commercial decision, in the new world in which we all live more and more commercial decisions will be made. An opportunity was put to us, and we were asked if we wanted to invest…. Had we not done it the way we did, the deal would not have gone through.

Had Swindon Borough Council made the decision to invest £450,000 of our money in a wi-fi venture in a more open way, it may well have been found that it was perfectly right and proper for the deal not to go through. Unfortunately, very few seem to have been asked for an opinion.

We don’t do anything without considering the implications. But we would not have done this had it not been in accordance with council policy.

I don’t recall gambling on start-up companies being a council policy.

This is a commercial venture that will bring commercial return. The only affects on capital budgets will be if this loan does not get repaid in full.

Has Mr Bluh not noticed that the economy is in rather a mess? That defaults on loans are much more commonplace than they were a couple of years ago? This is a commercial venture that may bring commercial return, but could equally bring losses. To remind him of something he said very recently.

To get a reasonable level of council tax and to go forward we have been required to find savings and efficiencies. We are doing everything that is humanly possible to keep this ship afloat.

Speculating almost £½M on a commercial venture in an already very crowded and competitive market does not look like ‘doing everything that is humanly possible’ to me.

If I wanted to speculate on commercial ventures, I’d buy some shares. With those shares comes the right to vote to remove the executive. And if others didn’t agree with me I could sell the shares and take my money elsewhere. None of those options are available when it comes to a council. The council takes my money in council tax regardless of whether I agree with what it does: there is no option to sell out.

I expect the council to provide services, not to indulge in commercial speculation. Whatever Mr Bluh may think, the council is not a business, it’s a council, and it is not subject to the commercial rigours that business is. If I want to invest my money, I’ll chose where to invest it myself thank you. I don’t expect some has-been lawyer and a bunch of bureaucrats to speculate with my money without asking first.

Mr Wilkes of the Brunel Centre seems to be jumping to conclusions about the effectiveness of dropping the cost of parking around Swindon town centre.

My prediction is that if they were to end this deal shopper footfall at the Brunel would return to 17 per cent down in January…. If the council were to remove these improved tariffs it would cause a wipe-out in January.

Welcome to Mt Molehill, Mr Wilkes. Both Mr Young of Swindon Borough Council and Mr Jackson of inSwindon manage to be rather more circumspect.

I think these statistics underline our strategy, meaning that if you give someone a four-hour ticket for about the same price as an hour long stay, they will spend more time and money in the town centre.

Visually the town centre looks busier this year and certainly people are still coming into town and still purchasing in all of the stores.

And seemingly purchasing more or more expensive items, as on average store revenue is the same as last year.

Now, I’m not suggesting that the drop in parking charges has not been beneficial to business in the town centre, but to claim that putting the charges back up would cause ‘wipe out’ is clearly over-dramatic.

The bare facts.

• In September, the number of shoppers visiting the centre was down 17% from the previous September.
• So far in December the number is down by ‘just’ 10% from the previous December.
• Parking figures for 2008 are not available.
• Since September this year, when the parking charges were cut, the number of people parking in town centre car parks has increased by over 20%.

But there were also things happening between September and December last year, which Mr Wilkes seems to have forgotten. Little things, like two of the UK’s biggest banks almost collapsing. Little things, like Honda announcing that it was going to close its South Marston production lines for several months. So even without the boost from reduced parking charges, it would be reasonable to expect the drop between December 2008 and December 2009 to be less than that between September 2008 — when the economy still had another nosedive to come — and September 2009.

With the council’s finances in a mess, it needs to rely on something better than a retail manager’s dodgy statistics before deciding whether to continue spending our money to keep parking charges down.

One could be forgiven for thinking that Mr Wills’ little outburst against the New Swindon Company and Swindon Borough Council was just a rather poor attempt to divert attention from the revelations about his parliamentary expenses, revelations about which he did protest rather too much.

I am not facing questions over items purchased at taxpayers’ expense during the past financial year ’ not least because travel costs are not items purchased at taxpayers’ expense and these are legitimate travel costs.

Ahh, spin, spin, spin. Travel costs may not be ‘items’, but they were still at the taxpayers’ expense.

I did not agree it was a mistake to claim this amount. It was a mistake to claim it under this header, which I did on the advice of the Fees office. It should have been claimed under the travel heading. I did not add that the costs ‘would have been’ allowable under my travel allowance. They are allowable under my travel allowance and they are being allowed under my travel allowance.

Spinning again: picking at individual phrases whilst not substantively disputing what was alleged. Does he really believe that saying ‘the trips would have been allowable under his travel allowance’ makes much difference from ‘the trips are allowable under his travel allowance’? And has he not realised that the whole problem with MPs’ allowances is that far too much is allowable?

The only reason my wife was hiring a Street Car to make journeys to and from the constituency was to save the taxpayer money. It is far cheaper — though more stressful for her — than claiming the train fares to which we are entitled.

Again, he misses the point. In what other job could anyone trough to this extent at the public’s expense?

And what of Mr Wills’ little outburst against the New Swindon Company and Swindon Borough Council? He admits to pushing for the creation of the New Swindon Company.

[T]he company was created, partly due to me pushing for it.

Yet he absolves himself of all responsibility for it.

Not enough has been delivered and both Swindon Council and the company are to blame.

The company is financed and controlled one third by the Council, one third by the South West Regional Development Agency — a quango created by his own government — and the Homes and Community Agency — a quango created by his own government. So that’s mainly his government wasting our money, rather than the council.

Mr Wills also seems not to have noticed the dire state of the economy that his government has created.

The plans don’t have sufficient vision, they’re humdrum…. I suggested a design competition with the likes of Norman Foster and Michael Hopkins taking part, but when I sent letters nothing was done.

Many would say that Swindon town centre has suffered from far too many council and developer visions over recent decades, and the Regent Place development failed through being too big a vision in a poor economy. Even in the topsy-turvy world of New Labour economics, it’s hard to understand how Mr Wills can believe that employing some of the most expensive architects in the business have made regeneration any more viable.

With all the fuss and angst over Swindon Borough Council’s budget plans for next financial year, another item on this Wednesday’s council cabinet meeting agenda has been overlooked.

The council executive’s proposals for replacing the New Swindon Company is damning with its mild praise. First, the mild praise.

Since the company’s formation TNSC has helped to stimulate regeneration and investment in Swindon’s central area. TNSC has put together exciting development packages that have stimulated considerable interest in Swindon’s regeneration plans. The company’s most notable success has been in attracting Muse as the developer for the Union Square scheme.

Claiming success before anything has conrete has happened is premature, to say the least. Even if this could be claimed as a success, ‘only’ is a more accurate term than ‘most notable’. One odd thing is that the proposals say funding — if only for the coming year — is unchanged.

Recognising the current economic challenges and the importance of an effective response, SBC aims to continue with its existing level of funding of £250k per annum plus the financing of the transferred economic development team and related project budgets.

Yet the budget proposals show a reduction of £147k. With contradictions like that, it’s no wonder that the council’s finances are in a bad way.

The reasons given for replacing the company read as a thinly-veiled catalogue of failure.

An opportunity to engage with private investors in a way not seen before

So the New Swindon Company failed in attracting private investors….

Deployment of limited resources for maximum impact and for best value

And wasted our money….

The requirement for town centre regeneration to link in a more integrated way with plans for the rest of the Borough to ensure Swindon’s existing communities benefit from regeneration and growth

And ignored the communities it was meant to benefit. And the replacement, borough-wide company, how will that engage with the community? Apparently, not all. The council’s vision for the new company is for it to be the poodle of the council, seemingly with no direct involvement with the community at all.

The recommendation in Swindon Borough Council’s budget proposals for next financial year to turn some street lights off at night has grabbed a few headlines. As I’ve mentioned before, turning off street lights is nothing new; it’s how things used to be. What is new is the amount it costs to turn the lights off. From the council’s figures, simply switching off — permanently — 481 street lights in rural areas is relatively cheap: a one-off cost of £5000 to save £11,000 per year. But putting a timer on street lights in residential areas to turn them off in the middle of the night will cost almost £½M — £450k to be more precise — and will take six years for the savings to recover that cost.

With the council spending almost £½M on turning out the lights and almost another £½M on borough-wide wireless internet, one has to wonder just how much bigger than £12M the hole in the council’s budget would have to be before its cabinet members practice the fiscal rigour that some of them are so fond of preaching to others.

Compare and contrast:

Mr Greenhalgh, on moving a bus stop in Penhill;

What part of ‘we don’t have any money’ does Councillor Glaholm not understand?

Mr Edwards on next year’s council budget;

We always strive to deliver the lowest possible rise in council tax but the reality is that we are facing a very difficult situation. We have to look at the rate of council tax or the services we provide. We can’t have both.

From this, you may just get the impression that Swindon Borough Council is exceptionally short of money. Then comes today’s very widely publicised announcement that the council has set up a joint venture with a private company to provide wireless internet access throughout the borough by the coming April. Mr Bluh;

It can’t be about cost-cutting all the time – otherwise there will be nothing left.

Perhaps he should have a word with his cabinet colleagues — particularly Mr Greenhalgh — who appear to have a different opinion. As is often his way, Mr Bluh also seems to have swallowed the company’s publicity spin.

residents in the Borough be able to access the internet for free

Rather than being freee, this could be a costly gamble.

To get through the financial storm, we are going to have to start raising some revenue. We believe this is a good deal for Swindon.

The scheme will cost £1M. The council has a 35% share in the company, so if Mr Bluh’s gamble with our money doesn’t turn out as he expects, the council tax payers of Swindon could end up with a £350,000 bill. And £350,000 is not my understanding of ‘free’.

With the first service beginning in Highworth next month, and completed throughout the borough by the end of April, clearly most of the money will already have been spent. For the sake of everyone in Swindon, we can only hope that Mr Bluh’s commercial speculations are proved correct.

It was reported this week that not only is what little redevelopment that’s happening in the town centre being funded by us via the state, but also that building in Swindon’s front garden is also being bankrolled by public funding. Now I don’t mind, too much, the tarting up of Swindon town centre being paid for by our taxes. If the regeneration of Swindon town centre hadn’t stalled it would have been paid for through levies on developers which, ultimately, gets passed on to those that buy the properties and then to those that use them, i.e. the local population. Either way, it’s taxation at the behest of local government.

Rather more objectionable is use of our money to build houses that aren’t wanted locally and now seemingly aren’t wanted by anyone else either. For decades central government has prevented most local councils from spending money from council house sales on building new houses. They still do. Yet now central government’s throwing money at housing developers, to the tune of almost £50,000 per house built in the case of the Swindon scheme.

If our money is going to be spent concreting over the local countryside, I’d rather us locals had a say in where and when it’s done.

Despite little having changed since Swindon Borough Council’s licensing committee last considered proposals to ban street traders from much of Swindon town centre, they have now approved the proposals. The only things that have changed are some strong objections from the owners of The Parade, and the appearance of proposals for repaving Regent Street. Those proposals talk of

De-cluttering the street, removing unnecessary items

yet on the same page encourage cluttering it again.

Encouragement of cafes and food outlets with street side seating areas.

It seems the council’s and New Swindon Company’s views are that a trailer selling doughnuts is bad, but a cafe selling doughnuts on the street is good. Reading the comments of shop-owners and developers, one could be forgiven for thinking that the rundown state of the town centre is entirely a consequence of a few street traders, and nothing to do with their inability to find occupants for now boarded-up shops.

These proposals do nothing to create a ‘vibrant street scene’ but go a very long way towards creating a bland one.

Mr Montgomery, owner of a gym that I’m neither going to name nor link to, is facing legal action from Swindon Borough Council for advertising without consent. His protestations of semi-innocence somewhat understate his activities.

It seems funny that the council seems free to advertise its own gyms outside the Oasis Leisure Centre but I can’t advertise mine outside my own gym. It is pure hypocrisy. There are plenty of businesses I see around the town with these types of posters up yet I see no one else being prosecuted. I feel I am being picked on.

Outside his own gym? If that was the only place he advertised, it might not be so bad. But what about the banners advertising his gym that have been attached on several occasions to the railings around Faringdon Road Park, or those often attached to numerous wire fences around town?

Mr Montgomery’s advertising is just rather elaborate fly-posting, and equally unwelcome. The sooner the council take action against him the better.

It’s nice to see that the tented market may soon be back in business. But given the state of the economy, it seems odd that the market’s new owners have chosen to increase rents by 60 to 100%. They say that rents need to go up to allow them to make a profit. Well, yes, but the previous operators of the tented market wouldn’t have stayed in business for as long as they did if they were making a loss so big that it could only be cured by a hike in rents as vast as this.

What would tenants get for these inflated prices? Insecurity, though that’s not how the new owners see it.

The six month lease is there to give security to us and the traders.

The risk of being evicted within months of opening a new business isn’t what many would describe as ‘security’. Flexibility: yes. The ability to cut ones losses if the new venture isn’t a success: yes. Security: most definitely not.