Tag: wifi

Wi-fi’s dead — long live wifi!

The report to next week’s special cabinet meeting of Swindon Borough Council makes it clear that their venture with our money to bring wifi to the whole of Swindon is dead.

So far as the Council’s interests in Digital City is concerned, further legal and financial advice will be required in this matter following which it is suggested that the Chief Executive, in consultation with the Cabinet Member for Finance, be authorised to take such action as he considers necessary to protect and, if appropriate conclude, the Council’s interests in Digital City and ensure that the network assets deployed in Highworth are transferred in the first instance to the Council’s ownership.

Conclude the Council’s interests, i.e. dead, finished, failed. And do we get any apology for that failure? No. Far from it. In fact, reading the report you could be forgiven for thinking the project had been a success.

Despite Digital City having failed to make interest repayments since late 2010, the granting of the loan has still proved to be financially advantageous for the Council. Sums received in interest and arrangement fees total £10.5k, while investment of the sums advanced to the company would have generated £6.9k to date at the Council’s average investment rate of return.

Let’ forget, shall we, that the original proposal said that Digital City would have repaid its £450k loan from us, the tax payers of Swindon, in full within two years. Instead, lets just be grateful. for £10.5k.

In place of an apology, we get a new proposed scheme, between Swindon Borough Council, an unnamed investor “under the ultimate ownership of a Global Telecommunications Company with annual revenues in excess of $3b US.” and that company well known for successful IT projects, Capita. Capita already provides numerous services to Swindon Borough Council. The report gives no indication as to whether Swindon Borough Council would have to stump up more of our money for this deal to go ahead. It also tries to suggest that the return on this new investment will constitute a return on the investment in Digital City (UK) Ltd.

The financial return to the Council is, therefore, enhanced by its investment in Digital City and the resulting Highworth pilot and the Council will now get a return on its investment. This will equate to the loan advance of £400k plus interest by year five or earlier depending on revenue share and this financial benefit will continue to accrue in future years…. Through these arrangements with Capita, SBC has the potential to receive significant return based on sales targets being achieved over 5 years, part of which will be credited against the loan of £400k to Digital City, and accumulated interest. Current indications are that this amount is likely to be repaid over approximately 5 years.

5 years? That’s in addition to the 2 years over which the loan to Digital City (UK) Ltd was meant to be repaid. And unless this new investor is going to take over the assets and liabilities of Digital City (UK) Ltd, then to suggest that this is a repayment of the loan to that company is the most creative of creative accounting. As the report makes clear, no such takeover is envisioned.

The Council’s intention will be to secure an orderly extraction of our interests from Digital City, with its assets being transferred to SBC to ensure that the Highworth infrastructure is kept intact. To ensure this happens, it is suggested that the Chief Executive be authorised, in consultation with the Cabinet Member for Finance, to take such action as he considers necessary to protect and, if appropriate, conclude the Council’s interests in Digital City and ensure that the network assets deployed in Highworth are transferred in the first instance to the Council’s ownership.

So effectively, Swindon Borough Council will exercise its rights under the loan agreement with Digital City (UK) Ltd and take over the company’s network assets. It will then enter a new venture with Capita and an unnamed company. On that basis, the new venture will owe nothing from the first, despite what the report may try to suggest.

The report to Swindon Borough Council’s cabinet is written my Mr Hitesh Patel. Mr Patel is an ex-director of Digital City (UK) Ltd. Mr Patel was also an author of the original recommendation to councillors to invest in Digital City (UK) Ltd. Perhaps, then, it’s unsurprising that he writes about that investment in such glowing terms. But given how poor his advice was the first time around, and that he didn’t know he was already a director of the company he was recommending an investment in, would anyone with any sense really trust his advice again? But then, would anyone with sense have made the first investment? Answers to that on a no-questions-asked cheque for £450k please.

Wi-fi — whose approach was it?

Throughout the entirety of Swindon’s wifi fiasco, Mr Bluh has been adamant that no tendering exercise was necessary nor appropriate, because it was not the council’s proposition, it was a proposal put to them by Mr Hunt. In the council chamber Mr Bluh has repeatedly been very clear, Mr Hunt approached the council, not the other way round. As long ago as December 2009 Mr Bluh said

[I]t 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.

Now Mr Hunt has given a version of events that differs somewhat. If Mr Hunt is to be believed, it was the council leadership that approached him.

What people do not appreciate is that I was talking for a long time about the concept, and the executive of the council approached me. We all looked at the risks and rewards and decided it was worth doing.

Given their track records — and that Mr Hunt believes his wifi proposal “was a good idea and it still is” — it’s impossible to guess whether Mr Hunt has had a lapse of memory, or Mr Bluh was lying. Of course, if the decision to fund this project had been done in a more open way, we wouldn’t be left to guess. But despite all the questions asked, Mr Bluh and colleagues continue to maintain excessive secrecy about the project, and honesty is in short supply.

Bluh’s wifi hindsight was others’ foresight

It seems that the current leadership of Swindon Borough Council are going through a rather ‘retro’ phase at the moment, claiming for themselves as original thoughts ideas put forward by others years ago. First there was Mr Perkins who claimed that creating a park on derelict town centre sites await redevelopment was his idea, whereas local residents suggested it in April 2008. Now it seems that Mr Bluh wants to get in on the act too.

Now, whilst it’s always refreshing — and all too rare — when a politician admits they got things wrong, Mr Bluh has a particularly unrefreshing way of admitting his errors. In fact he does so in a way that suggests he doesn’t accept he’s failed in any way at all. As long ago as December 2009 local residents — some that were members of his own political party — were pointing out how risky his decision to invest almost £½M of our money in a wi-fi start-up company was. A company lead by someone with no track record in the industry; a company where directors seemed not to know they were directors, and a company where the directors that did realise they were directors didn’t understand what their responsibilities are. So for Mr Bluh to now say,

We did all the due diligence but perhaps in hindsight we should have looked at the risk factors a bit harder.

is little better than an admission of total economic blindness. For Mr Bluh to only recognise with hindsight what others with just a little foresight have been telling him for almost two years is, though welcome, inadequate. And at the risk of stating the obvious, if they didn’t look at the risk factors hard enough, then they clearly didn’t do all the due diligence, only some of it.

We were prepared to take the risk and we felt it was a managed risk at the time and, with hindsight, perhaps it wasn’t the best risk.

Even if it were managed at the time — which is disputable — the council then chose to relax that management, disregarding concerns that were raised. Again, there’s no hindsight required here, all the evidence was available at the time, and pointed out repeatedly to Mr Bluh, but he wilfully chose to ignore it. Until he shows some signs of admitting that this isn’t just a matter of hindsight, but something he should have and easily could have avoided, there’s no reason to believe Mr Bluh won’t be squandering our money yet again.

Digital City (UK) Ltd, R.I.P.

Hard on the news that John Richard ‘Rikki’ Hunt has filed for bankruptcy, comes the news that Digital City (UK) Ltd is now in the process of being struck off the register of companies. So that’s £½M of Swindon taxpayers’ money gone, despite the assurances of the Messrs Bluh and Perkins that the equipment installed by the company and the use that could be made of that was worth more than the loan to them from Swindon Borough Council, that it was a no-lose proposition. How a patchy wireless internet service for Highworth, and nowhere other than Highworth, could be worth £½M is hard to see, but that is all we got for the money our councillors squandered on our behalf on this project.

Lest we forget, here are a few things said about this failed adventure with our money by Mr Bluh in December 2009.

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…. 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…. 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.

The ship was holed below the waterline before Mr Bluh squandered our money on it, and is now sinking rapidly to the bottom of the ocean. There were many that brought this to the attention of our arrogant council leadership at the time. They wilfully chose not to listen. Now it will be us, the council taxpayers, rather than those councillors personally, that will be paying for their financial stupidity.

The fall and fall of Rikki Hunt

Once upon a time, not so long ago, the likes of Mr Bluh and Mr Perkins were fond of telling the people of Swindon what a great person they thought Mr John Richard ‘Rikki’ Hunt was. How they thought he was a great person to be leading a company to which they had loaned almost £½M of Swindon taxpayers’ money because, in their view, he was a very experienced business man from which Swindon would benefit.

Of course not all experience is equal. Eddie ‘The Eagle’ Edwards had much experience of ski-jumping… and of coming last. Mr Hunt has now managed the same feat as a business man, going bankrupt to the tune of over £1M, including over £400,000 to the tax-man. As he filed for bankruptcy on 8 March this year, it also puts some perspective on his apparent generosity in ‘gifting’ to Swindon Borough Council his stake in the failed wi-fi company for which he had convinced the aforementioned gullible councillors to part with our money. It would have been no financial loss to him, only to his creditors.

Mr Hunt’s involvement with wifi company Digital City (UK) Ltd was via a consultancy company he set up for that purpose, Avidity Consulting Ltd. That company is now in the process of being struck off the register of companies. How much Avidity received from Digital City — and so indirectly from Swindon taxpayers — for its consultancy services has never been revealed. Also of note, before anyone is overcome with sympathy for Mr Hunt’s predicament, is that his wife, Laura Hunt, is not bankrupt, remaining a company director. For the Hunts, Rikki’s bankruptcy may be little more than a minor business inconvenience, rather than a case of serious financial hardship.

Rikki Hunt cuts and runs

In a move that will come as no surprise to those that have studied Mr John Richard ‘Rikki’ Hunt’s business history, he’s now done a runner from Digital City (UK) Ltd — the wifi network company he set-up — leaving behind almost £½M of overdue debt to Swindon Borough Council. It’s not the first time he’s abandoned a company having lead it to financial disaster, as local football fans know only too well.

As ever on matters related to this shoddy deal, Mr Perkins is on hand, trying to make things sound better than they really are. As usual, most of what Mr Perkins has to say is deceptive. If you’re looking for an honest analysis of the situation, Mr Perkins is not the person to turn to.

He had a lot of problems to overcome which he didn’t appreciate you’d have when involved with the public sector.

Don’t forget — as Mr Perkins seems to have done — that Mr Hunt is very familiar with working with Swindon Borough Council, having been a director of both The New Swindon Company and Swindon Commercial Services.

It’s very difficult for a partnership to go forward when you’re dealing with public money and scrutiny, which quite rightly, there should be.

It seems Mr Perkins has forgotten all the abuse and spite he has vented in the council chamber at anyone daring to question this deal over the last eighteen months.

We’ve learned a lot from this, and I’m sure Rikki Hunt has as well.

I’m sure Mr Hunt has learned a lot… such as how easy it is to get gullible councillors like Mr Perkins to part with taxpayers money, then walk away after eighteen months leaving others to clear up the debts.

With Swindon Borough Council now bunging £610,000 in the direction of its Recreation Centre to right off debts, Highworth will have been the lucky recipient of over £1M of Swindon taxpayers’ money. You could be forgiven for thinking that the local blue nest put keeping their rural voters happy above dealing with the council’s dire financial position. To quote Mr Bluh in the latest edition of Swindon News:

Boiled down, if we are to have a hope of balancing our books, we have two challenges ahead of us. The first is to become as efficient as possible in the way we operate. The second, perhaps more controversially, is to reduce what we currently do.

At the moment, they appear to be doing neither.


Just as I was writing that Digital City (UK) Ltd had been lead to failure, it was drawn to my attention that their website has gone offline, replaced by a standard domain parking page. An internet service provider without an internet presence is clearly not one that’s going to get far.
Get Signal has gone!

Bailing out before a bail out

It is normal practice in any private sector company for the executive to have shares either in that company or, is a subsidiary of some larger organisation, in the parent company. For companies traded on a stock market it is often mandatory for the directors to own shares in their company. That way it ensures that their own well-being is most likely to be guaranteed by them ensuring the well-being of their fellow shareholders. A director without shares in their company — according to the accepted logic — is more likely to perform acts of reckless self-interest that damages the company that employs them.

So when Mr John Richard ‘Rikki’ Hunt claims he is going to ‘gift’ his 30% stake in his failing wifi company Digital City (UK) Ltd to Swindon Borough Council, should that be seen as an act of generosity? No. Given that the company has been unable to keep up its loan repayments to the council, and that it has failed almost every target it has set itself, its debatable whether those shares are worth anything anyway. And now Mr Hunt wishes to remain chief executive of the company he’s lead to failure, yet without the financial incentive almost every other company deems essential to ensure a chief executive does their best for the shareholders. That would seem to be a recipe for financial disaster, though Mr Hunt seems to already have achieved that in a fairly comprehensive manner.

Mr Hunt claims that his company was damaged by public criticism.

There has been a lot of effect on the business with the public noise and debates that have gone on… the kind that is politically damaging to us and the aggression towards the project.

Is political discussion really a surprise when he went looking for funding from politicians? And lets be clear, there has been no ‘aggression’ towards ‘the project’, only to the secretive way in which the decision was made to pour the money of Swindon taxpayers into a company that on the evidence available to those taxpayers at the time had no track record in its industry, no credible plans, and no understanding of the market it was entering. The criticisms remain valid, and the taxpayers of Swindon are currently £½M poorer as a result.

The responsibilities of a director

When Mr Perkins was appointed as a director of Digital City (UK) Ltd last year, I was told by Mr Bluh that he was selected to represent Swindon Borough Council on the company’s board because of his skill and experience in business. The company of which Mr Perkins is a director has failed to make payments on its loan from the council… and that failure pre-dated by a month Mr Perkins claiming that payments were still being made. According to Mr Perkins, that’s all fine and dandy.

I was asked in December whether it was up to date with its payments, and I said yes — because that’s what I had been told. When I made that statement it was correct, based on the information I had at the time.

Perhaps it’s time that Mr Perkins reminded himself of his obligations under the Companies Act 2006.

(1) A director of a company must exercise reasonable care, skill and diligence.
(2) This means the care, skill and diligence that would be exercised by a reasonably diligent person with—
(a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the director in relation to the company, and
(b) the general knowledge, skill and experience that the director has.

At the moment, Mr Perkins’s diligence in checking his facts before making public statements about Digital City (UK) Ltd appears to be falling far short of reasonable expectations.

It’s as though I’d never been away…

Sometimes, returning from a long absence is like awakening from a hibernation: everything is new and fresh. A new beginning. But then there’s times like now when it seems that nothing’s changed.

So what’s not new? Fanciful predictions that the old College building will soon be demolished continue to be peddled by our less-able councillors. Now — as last summer — Mr John Richard ‘Rikki’ Hunt, is begging for money for his tin-pot wifi company that’s taken almost £½M of our money and delivered virtually nothing in return, failing on its commitments whilst it does so.

And the unifying feature of it all? Mr Perkins spouting unadulterated rubbish. For example, Mr Perkins on the old College site:

We’ve been in discussions with the developer for the last few weeks. If that goes through, we’ll start removing the college from Swindon. Hopefully it’ll be going ahead by April.

Would that be April 2012? As the rather more rational Mr Bawden notes, we’ve heard this all before… many times.

We were talking about it when I stepped down. Now five years later, we’re still talking about it! It’s no good saying: it’s all the economy. Until two or three years ago, the economy was going like a rocket…. I get more and more frustrated walking around the town centre, I feel we just don’t really know what to do with it.

Quite. But hey, we’ll soon have yet another person at the council’s expense — over £45,000 of expense — puffing out a smoke screen about grand plans for nothing much in the town centre, when Forward Swindon appoints a new Head of Communications and Marketing.

Mr Perkins on wifi is no more logical, despite his alleged business acumen.

No business in its first year is completely trouble free and most of Highworth is still operating and the technical problems are mostly sorted out.

Given that Digital City (UK) Ltd originally claimed that their wifi in Highworth would be fully functional by 15 January… last year, even someone as politically warped as Mr Perkins should be able to see that’s as shining an example of failure as one could ever hope to see. They may brand themselves as ‘Get Signal’, but in Swindon getting Digital City (UK) Ltd’s signal is one thing you’re guaranteed not to do.

However, things don’t always go as you plan in business, particularly when you are dealing with something that is innovative.

As many have noted — but Mr Perkins and his colleagues choose to ignore — there’s nothing innovative about wifi. Seemingly the only thing innovative about this project has been the company’s ability to pull the wool over the eyes of the likes of Mr Perkins and walk away with £½M of our money whilst delivering almost nothing in return.

Mr Perkins also flatters himself when inviting people to talk with him.

I wish people would come and talk to us if they have a problem, but it has to be in a positive way. Going through reports to find things that are not 100 per cent right is not helpful — business doesn’t operate like that.

As anyone who has seen Mr Perkins in the council chamber will know, taking a positive approach with him is not something he rewards. Mr Perkins in the council chamber has just one mode of operation, a loud-mouthed, bad tempered yob, shouting down anyone he disagrees with, spitting with fury and hatred.

Swindon Borough Council has repeatedly waived the conditions it applied to its loan to Digital City (UK) Ltd. If Mr Perkins isn’t happy with the council being legitimately held to account over how it’s spent our money, then he really shouldn’t be a councillor.