Wednesday, 27 January 2016

Speculation on Sea

The Rainbow Alliance in charge at Southend Council had previously confirmed its intention to pursue a speculative policy of seeking to acquire commercial property to deliver income streams and capital appreciation and the latest budget proposes the allocation of £6M over the next 3 years providing a pot for this purpose.

It is being funded by increased borrowing and adds to a further figure of £1M for the possible acquisition of properties in Queensway.

Ignoring the irony of this policy bearing in mind council leader Ron Woodley’s previous stance on borrowing this policy continues to raise major concerns.

If properties are in Southend they will be added to an existing range of properties owned by the Council in the Town and make the council’s finances increasingly dependent on the strength of the market in this specific areas. It is a policy based on putting all your eggs in one basket! If properties are sought outside the Town then they are in areas of which the Council, its members and officers have no specific knowledge and may be unaware of the resulting perils.

Effective property acquisition often requires quick and reactive decisions to be taken and is completely unsuited to the restraints imposed on a democratically accountable organisation like SBC.

Council officers are generally very able and dedicated in the areas they are qualified in – however commercial property acquisition in circumstances requiring good returns on both an income and capital basis is generally not one of them.

If the market slumps and the Council is sitting on the wrong investments the effect could be substantial – the problem is that by the time that happens those responsible for this decision will be long gone leaving a future Conservative administration to pick up the pieces as normal.

I fully accept that the Council needs to identify and develop alternative income streams wherever possible but it does not seem to me that the risks of this policy has been fully highlighted to the public.

Tuesday, 26 January 2016

Ron Woodley - Southend's answer to Jim Hacker

I have always been a great fan of the Yes Minister and Yes Prime Minister situation comedies and there were regular occasions when as Council Leader I would be faced with an explanation from council officers which could have been lifted straight from the mouth of Sir Humphrey Appleby.

However it would seem that some members of Southend’s current rainbow alliance also lean towards the Jim Hacker approach to politics. For Christmas I received Graham McCann’s fascinating background account of the series’ “A very courageous decision” and he highlights the inspiration the writers took from some real life politics to include examples of leading politicians arguing for a particular reform when in opposition but then defending the policy they were attacking when in power.

In Southend politics nowhere is this better demonstrated than in Leader Ron Woodley’s stance on borrowing. In opposition he constantly attacked the level of council borrowing, although he was always reluctant to identify any specific projects dependent on that borrowing that he would not have undertaken.

Now in power he heralds the new approach to borrowing and the reductions he has delivered. This is complete and utter hogwash. Admittedly the repayments on borrowing have been lower than initially anticipated however this has been as a result of the treasury management skills of officers and the far lower interest rates which have applied over the period – certainly nothing to do with the policies introduced by Ron and his pals.

In fact in the last budget I presented in 2014 the proposed borrowing for the coming year of 2016/17 was identified as £15.9M. In the proposals recently released by Cllr Woodley for 2016/17 he advocates internal and external borrowing totalling £31.2M with an additional call of £8.3M on earmarked reserves and revenue contributions – otherwise known as stripping the cupboard bare! This includes a significant number of new schemes and additions to the capital programme funded by borrowing.

And yet he still argues that he has been tough on borrowing. The interesting question is does he really believe this rubbish or can he just not confront the fact that his opposition stance on borrowing was wrong. Incidentally we also heard him say year after year that major economies could be made by cutting red tape in the Civic Centre. He has not delivered on that either!