September 16: Will PFI schemes saddle KCC with unsustainable debt?
UP-DATED WEDNESDAY
8.00PM
Peter Gilroy has announced that
he is to leave Kent County Council as its chief executive next
May
Read our story here
After a decidedly uneventful cabinet meeting held down
in Dover earlier this week, my heart wasn't exactly racing at
the prospect of covering today's Governance and Audit
committee at County Hall.
This is the cross-party committee on which
councillors effectively take on the role of being the
authority's spending watchdog. It seemed some had been
emboldened by a presentation before the formal meeting about how
they should go about their role.
There were two interesting discussions, the first concerning the
recent investigation into whether KCC had acted improperly in
setting up various commercial ventures.
The Audit Commission report
cleared KCC of any wrong-doing but there was a surprising and
unexpected admission today from former cabinet member Cllr
Keith Ferrin, who told the committee that the council had
brought a lot of aggravation on itself from Kent businesses as a
result of failing to be open and transparent about what it was
doing.
He also said that one of the reasons why KCC became involved in
bidding to run bus services through Kent Top Travel was because it
suspected operators were running a monopoly and the only way to
discover if that was the case was to enter the market itself.
It wasn't exactly a "mea culpa" statement but the first frank
admission I've heard from anyone associated with the ruling
Conservative administration at the time that they handled
things badly. It was also the first time I'd heard the view that
KCC became involved because it suspected there was a monopoly
operating - ironically, precisely the charge that some operators
have thrown back at the council over its activities.
Interestingly, at the time the row between KCC and the business
community was at its worst, KCC did set out a strategy - leaked in
a memo - to go on the offensive and be much more open but that was
vetoed by politicians nervous about it bringing more unwelcome
attention.
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The second discussion of interest focused on the extent of KCC's
involvement with various Private Finance Initiatives
(PFI schemes) and what it meant to the council in
terms of loan repayments and debts.
KCC is involved in a number of such schemes through the
Building Schools for The Future programme. But you
will struggle to discover precisely what ramifications this has in
terms of the repayments the authority has to make to the
private contractor or consortium which meets the costs
up-front because they are kept off the balance sheet - because of
an accounting mechanism that means nothing much appears in them in
the council's official accounts (or anybody else's.
But members of the committee were decidely unimpressed with this
state of affairs, which is down to the Government own
regulations. Cllr Keith Ferrin - who at this
rate will soon have full membership of the backbench awkward
squad - led the charge, saying that it could become a "huge issue"
for the authority and that keeping such schemes off the accounts
meant no-one knew exactly how much the council would have to pay to
meet all the eventual costs.
In fact, he claimed that if a future Government decided to pull
the plug on the BSF programme, KCC could be saddled with such
massive debts that it could be pushed to the brink of bankruptcy.
I'm not so sure of that and I'm pretty convinced the
leadership won't be awfully happpy with such alarmist talk.
But as a result, the committee is to be provided with a report
setting out just what KCC's liabilities are. It should be an
interesting read.
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Kent's 11-plus - right or
wrong?
As thousands of Kent pupils sit the 11-plus, there's a
thought-provoking and intelligent debate about the grammar
school system being played out through the KM group's online site
between two well-known protagonists on opposite sides of
the argument.
If you're interested, you can read the on-going discussion
between Conservative county councillor Chris Wells
(a former cabinet member for education) and Martin
Frey of the campaign group Stop The Eleven Plus (STEP) by
clicking
here.
.
Wednesday, September 16 2009