Tag: bluh

One thing that seems to be absent in Swindon’s free wi-fi fiasco is due diligence. Mr Bluh would have us believe that due diligence occurred before Swindon Borough Council loaned a start-up company £450,000 of our money to provide ‘free’ wireless internet across the borough.

As for whether due diligence was followed, of course we looked at the risks and exposure of the investment. There is absolutely no requirement for us to seek third party independent advice. We have successfully concluded many multi-million deals and transactions and, as a result, have built up a high level of legal, commercial and technical expertise.

Others disagree. Evidence of due diligence is certainly hard to find. The published advice given to Mr Bluh and Mr Edwards is limited. The advice stated that the company was more likely to pay the council’s loan back late than to completely default. It also stated that the likelihood of the council getting a return on its shareholding was strongly dependent on the company’s marketing campaign, yet at the time the company did not have a formal marketing plan. Just how weak would a business proposition have to be for these two councillors not to squander our money on it? This is also the council’s first public/private venture, according to an article in the council’s own newspaper. So the expertise available in the council is more limited than than is being suggested.

Mr Bluh would also have us believe that this £450,000 could not be used for other purposes.

The money invested in Digital City cannot be used to plug a gap in our budget or operating services, it forms part of a sum we would normally invest in order to get a better return for the council.

Just how naïve does he think we are? Transferring money from reserves is commonplace amongst councils when times are tough, as shown in Swindon Borough Council’s own accounts.

Theres also the matter of whether this boroughwide wifi service should have been put out to tender, as a procurement exercise. The Swindon branch of the Federation of Small Businesses believe so, and that the council is disadvantaging local businesses. Once again, Mr Bluh would have us believe differently.

We have been looking at providing free Wi-Fi for the last three years as part of ‘Swindon’s Digital Challenge Proposal’ and it is only recently we have been approached by Digital City UK who had a technical partnership with aQovia. They came to us because they wanted to set up services to sell in Swindon and we invested in them, so we have not disadvantaged any other businesses in Swindon.

But if it was part of the council’s policy to provide such services would they not have eventually offered a contract to supply these services if this offer hadn’t been made? And isn’t Mr Hunt — as chair of one of the council’s bureaucracies, the Swindon Strategic Economic Partnership, and a board member of several others (SSP, TNSC & SCS) — someone with rather better access to the council cabinet than most? This is not some unconnected company coming along with a commercial proposition: Mr Hunt and the council have been closely connected for many years. And as a consequence of that we, the Swindon taxpayers, seem to have been landed with a deal with far less financial security than a properly procured service would provided.

It’s not enough for the process to be, as Mr Bluh regards it, not only above board but robust. It also needs to be seen to be above board. At the moment, all that can be seen is a fog of secrecy and spin, mixed with smoke from taxpayer’s money burning.

A document uncovered by kecl over on TalkSwindon shows that Swindon Borough Council’s £450,000 loan to the company installing wifi across the borough is far from secure.

The new company will need to generate sufficient income to repay the loan provided by the Council. Should this not be the case, security is provided through the loan agreement which requires transfer of the ownership of the company’s assets to the Council in the event of default. The physical assets will be purchased at a cost of around £250k

What the cabinet briefing to Mr Bluh and Mr Edwards doesn’t mention is what those physical assets might be worth once installed: no doubt considerably less than £250k. Still, never mind, the council would have a share in an unsuccessful network and a defaulting company.

In addition there will be value in the virtual network that will cover all of the Borough and in the Council’s shareholding in the company.

The document also indicates how woefully unprepared the company was just a couple of months before launching the service.

While providing the loan is not without risk, based on the Business Case it appears that the risk that the loan repayment period may need to be extended is more likely than the risk of complete default…. The success of the company, particularly in the early stages, and consequently the potential for Swindon Borough Council to achieve a return from its shareholding will depend to a large extent on the success of the marketing campaign. A formal marketing plan has not yet been developed, but a Brand Consultant and Marketing Specialist have been informally assisting the project.

So that’s a loan made of the basis of a business plan that lacks a plan for what financially is its most important part.

Over 50% of households in Swindon already had broadband access in 2006. That’s half the potential market for the new company’s paid-for services gone before they even start. Many of the remainder are likely to have neither the interest nor the money to pay for wifi services either. The business case must be very optimistic.

According to the document, the report and its recommendations were approved by the two cabinet members without reference to the rest of the council’s cabinet. The issue has now been referred to the Audit Commission.

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.

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.

The vanishing redevelopment of Swindon Town Centre

’Twas once the time when the masters of spin were the New Swindon Company, when it came to making out that minor changes to the town centre were stunning improvements. The leaders of Swindon Borough Council have now snatched the spinning baton and would have us believe that the redevelopment of a single department store will now transform the town centre.

It really does beggar belief that the New Swindon Company’s Mr James seems to think that announcing the replacement of a single department store somehow lessens the fact that a major development has been shelved. Regents Place is dead… long live BHS. A £215 M development shelved, but don’t worry, all’s well: one store is spending £25 M. Let’s hope that Mr James never takes up marriage guidance as a profession, as his understanding of commitment is rather unusual.

I am pleased to say that Modus are fully committed to a development in Swindon…. Unfortunately, it is impossible to say when it will get back on track as this depends on when the economy moves out of recession and the property industry regains its equilibrium.

It’s not surprising that many commenters do not believe that Mr James’ Modus bride will ever make it to the development altar.

Yet some of our councillors appear to have even less of a grasp of reality than Mr James. First, as always, there’s Mr Bluh, who sees movement where there’s only stagnation.

I do believe this scheme will go ahead, the momentum the town’s regeneration has created isn’t going to be easily stopped.

Momentum? Where? Unless the momentum Mr Bluh has in mind is downwards, like that of a lead balloon, there is little in evidence. Perhaps he’s still rather over excited after spending the weekend having fun at our expense, but all we’ve got of regeneration so far is one giant television, installed a year ago — which for most of that time has shown little more than news and weather bulletins — and a large number of boarded up demolition sites. The only obvious momentum is the continual spin from politicians about the stalled regeneration. Another spinner is Mr Barnett. He seems to be easily impressed.

It’s going to tidy up an already tired looking building. It’s great news for Swindon. All sides have come on board to provide the town with useful shops in a good looking building.

The plan for BHS’s store is to replace a large windowed concrete and glass building with a large windowed stone-clad concrete and glass building. Stone-cladding have never been so exciting.

Mr Bluh seems to have some very basic misunderstandings of communication.

We said we would listen to them and that is what we have done, even if they didn’t like everything they heard.

Hint to Mr Bluh: if you’re listening, it’s you that should be doing the hearing, not the other way round. But then if, as has been reported, the staff at Groundwell Park & Ride have already been made redundant, the whole ‘listening’ exercise was a sham anyway.

Compare and contrast.

Mr Perkins on the government’s part-funded scheme to offer teachers in failing schools extra money to stay in their jobs:

At the end of the day they are attempting to bribe teachers. I thought teaching was always about being a vocational job.

Mr Bluh on councillors voting to increase their own allowances when the council’s income is dropping:

The challenging times in which we find ourselves, especially given the low level of formula grant we receive despite the borough’s needs, call for positive leadership, not political gestures.

Clearly the local blue nest — and the red nest councillors that voted with them — are rather confused. This isn’t positive leadership: it’s hypocrisy.

I’ve no idea how Mr Wills thinks pollsters earn their living, but apparently it’s not from running surveys. In what is becoming an annual argument over free travel for pensioners, he seems to think that Swindon Borough Council can obtain a survey for nothing.

In these difficult economic times I am not asking the council to spend more money but only to conduct a survey to see whether passengers can get what they are asking for without any extra burden on the taxpayer.

Surveys cost money… unless you want something that’s so poor as to not be worth the effort. It also doesn’t take much thought to work out that, if some pensioners are currently paying to travel before 9.30 am — which the comments in the Adver report show they are — then giving them free travel will cost the taxpayer money.

Whether or not the extra cost’s as much as the £230,000 claimed by Mr Bluh is another matter. That figure corresponds to roughly 2700 extra pensioners travelling in the extra half hour each week.

The Adver seems to be trying to out-do Mr Bluh’s extreme optimism. In his words,

It would be very easy to sit here and be full of doom and gloom about the year to come. But I think we have got grounds to be optimistic. We are on a long journey and it doesn’t matter how much flood water there is we will keep on that road. We are focussed on business as normal but we have to be realistic about the challenges that will face us.

To me that reads as though he believes regeneration will continue but not at the same pace as was originally hoped. To the Adver, it translates as ‘full steam ahead’. You don’t need to have listened to much political spin to know that when a politician talks about a ‘long journey’, the journey will be longer than they originally predicted. With the forthcoming signs of progress being yet more demolition — this time at the former Swindon College site — rather than construction, Mr Bluh’s ‘optimism’ is little cause for excitement.

As mentioned in the comments to the Adver’s story and as apparent in the Beeb’s photo gallery of the launch of the big screen in Wharf Green, the crowd was small. Some may say that’s because of the timing (Friday afternoon) or the lack of publicity. However, both the small crowd and lack of publicity suggest that the town’s people have not been deceived by the hype that continues to follow the big screen.

This will instil a sense of civic pride in the people of Swindon.

There are many that criticise Swindon and its people. The lack of interest in this event shows that the aspirations of the people of Swindon and their perception of what would instil civic pride are above what the Beeb’s Mr Burnett-Godfree, and others who have over-promoted the big screen, would have us believe.

I also note from the comments to the Adver’s story that someone with pretensions (albeit fanciful) to represent South Swindon in parliament, has obviously not visited the town centre for a long time, nor followed the local news on which he chooses to comment.