All good things must come to an end: thank you and goodbye from the Futures Forum blog

We seem to have reached a certain point where we are very much looking to new futures, new starts and a lot of anticipation.

We have a substantially new Town Council in place - which met last night and voted for continuity but with renewed vigour:
Sidmouth Town Council appoints chair and vice-chair | Latest Sidmouth and Ottery News - Sidmouth Herald
Futures Forum: Sidmouth Annual Town Meeting > Monday 20th May > challenges and opportunities

The District Council is now dominated by Independents:
Futures Forum: District Council elections: "Independents deliver blow to the Conservatives'" > further reports

And will be meeting tomorrow:
WEDNESDAY crunch day for Indies at EDDC … and us | East Devon Watch
Futures Forum: As Independents seek to create a working coalition, the District Council meets for the first time since local elections > Wednesday 22nd May

The EU parliamentary elections will be happening on Thursday - and will be having a profound effect on life in the West Country:
European Elections 2019: Why should you vote? | Latest Sidmouth and Ottery News - Sidmouth Herald
Futures Forum: Brexit: and the EU elections: the latest South West poll results
Futures Forum: Brexit: and the EU elections: Democratic Audit looks at what will happen in the South West

Back here in Sidmouth, not only do we have well-established festivals looking forward to the summer: 
The Sidmouth Folk Festival – 2nd – 9th August 2019
Paul Taylor-Mills returns to Sidmouth with Summer Play Festival 2019 | Latest Sidmouth and Ottery News - Sidmouth Herald

But we have thriving relatively new ones:
Sidmouth Sea Fest delivers diversity and creativity | Latest Sidmouth and Ottery News - Sidmouth Herald
Futures Forum: Sidmouth Sea Fest > staging 'Fish out of Water', a new play on the life of Stephen Reynolds

As far as this blog is concerned, it started six years ago with Port Royal:
Futures Forum: Port Royal future: ‘Let’s get the community on board’

And we seem to have sorted at least the Drill Hall for the moment:
Futures Forum: Plans for Port Royal: selling the Drill Hall, rather than producing a masterplan > East Devon's MP calls for a "masterplan for the Port Royal and Ham car park in Sidmouth"

A less successful end-game has been the struggle over Knowle, which began here:
Futures Forum: Save Our Sidmouth

And has ended here:
Futures Forum: Knowle relocation project: parkland transfer to Town Council > latest
Futures Forum: Knowle relocation project: an overspend on loans
Futures Forum: Knowle relocation project: or, how a new HQ costing £8.7m is valued at £3.5m

It seems the right moment, then, to allow fresh blood onto the Sidmouth scene and to make this the last - but the blog itself will remain online as a resource.

Meanwhile, here's a list of other news sources to dip into:
BBC Local News: Sidmouth
ITV Local News: Sidmouth
Sidmouth Nub News

Also:

News from Sidmouth Town Council
Latest News from Sid Valley Help

And of course:
Sidmouth Herald
Devon Live: Sidmouth

Local News - Radio Exe

Plus the excellent and provocative:

East Devon Watch

And there is a lively local social media page:
Sidmouth Community public group | Facebook

Finally, there are of course the Vision Group's very own daily news pages: 



Recent News - Vision Group for Sidmouth
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District Council borrowing in order to hold onto its council housing

The shenanigans of the District Council when it comes to money is often reported on by this blog...

Whether about its 'investment' in highly speculative property markets:
Futures Forum: District Council's £20m investment fund: "Property investment brings with it the potential for significant risk if things go wrong."

Or about its 'savings' over its relocation project:
Futures Forum: Knowle relocation project: an overspend on loans

The Herald has just put together a story on how much the District Council is in debt: 
East Devon District Council's has £86.8 million in outstanding loans to pay | Honiton, Axminster and Seaton news - Midweek Herald

And as covered by the VGS:
District Council borrowing goes up by £3m - Vision Group for Sidmouth

However, as pointed out by Cllr Cathy Gardner, yes, the District Council has questions to answer - but actually a lot of the borrowing it to make sure it can keep its social housing, as reported on the VGS Facebook pages:
Vision Group for Sidmouth - Home | Facebook

And by the East Devon Watch: 

EAST DEVON ALLIANCE COUNCILLOR GARDNER CLARIFIES SIDMOUTH HERALD EDDC DEBT STORY

23 APR 2019

East Devon Alliance councillor Cathy Gardner has contacted EDW to clarify the story:

“To my knowledge (as a District Cllr), EDDC has over £80m in debt because it had to borrow money to hold on to its council housing when the conservative government were making councils sell it off. So this is debt for a good & bad reason!

I’m surprised that the ‘politically neutral’ press officers have not added this to their comment to the Herald. I’ve objected to the council proposing to borrow money to invest in commercial property (to generate income), something else forced on them by the conservative government cuts to council grants (now zero).

The relocation from the Knowle is another matter. If re-elected I will continue to push for transparency on costs and to see if any of the Conservative group can ever prove break even.”

East Devon Alliance Councillor Gardner clarifies Sidmouth Herald EDDC debt story | East Devon Watch
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Knowle relocation project: parkland transfer to Town Council > latest

Earlier this month, there was an announcement that there would be a transfer of Knowle parkland to the Town Council this autumn:
Futures Forum: Knowle relocation project: parkland transfer to Town Council

At the Town Council meeting on 8th April, the issue was brought up again: 

SIDMOUTH TOWN COUNCIL 

Minutes of the Meeting of Sidmouth Town Council held at the Council Chamber, Woolcombe House, Sidmouth, on Monday 8 April 2019 at 6.30pm 

• District Councillor Rixson asked whether Pegasus Life had been approached to contribute to the management costs of the Knowle Parkland. The Town Clerk replied that in early discussions, Pegasus Life had indicated a willingness to make a contribution to the management costs as their residents would benefit from the open parkland adjoining the proposed development.

Transfer of Knowle Parkland 

The Town Clerk reported that Pegasus Life now had a revised phased timescale for the construction of their development at the Knowle. This meant that the Knowle Parkland would likely be offered for transfer to the Town Council in the autumn/winter of 2019 instead of in three years’ time as previously advised. Refurbishment work had also been carried out on the railings and brickwork along the Knowle boundary to Station Road as requested by the Town Council.

PART ‘B’ 
Transfer of Knowle Parkland 

– Financial Consideration The Town Clerk reported that following negotiations between the Chairman and Vice-Chairman of the Council and District Council representatives, the Knowle Parkland had been offered to the Town Council along with a sum of money representing 2 years’ worth of maintenance costs. Members were asked to consider this offer and advise the basis for further negotiations. 

RESOLVED: that: 
1. The Town Council accept the transfer of Knowle Parkland with the sum of money offered for 2 years’ worth of maintenance costs. 
2. In addition to (1), the District Council must supply evidence of recent tree surveys and management and any remedial tree works carried out prior to transfer of the land. 
3. Pegasus Life be asked to make an annual contribution to grounds maintenance costs as this work will directly benefit their residents. 


Mins-STC-080419.pdf
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Knowle relocation project: an overspend on loans

How much exactly has the relocation from the old District Council HQ cost?
Futures Forum: Knowle relocation project >>> a spanking new HQ for £5.6 million... or for £10.6 million?

How much exactly is the new HQ worth?
Futures Forum: Knowle relocation project: or, how a new HQ costing £8.7m is valued at £3.5m

What is clear is that a lot of money had to be borrowed:

Here is one estimate of the amount of money being spent on the relocation project:

Expenditure:
= £10.5 million (+ new road) for the Honiton HQ + £1.5 million for refurbishment of the Exmouth Town Hall 
= £12 million for both sites

Income:
= £7.5 m for Knowle from PegasusLife

Deficit:
= £4.5 m to be financed by borrowing

Futures Forum: Knowle relocation project: ready to move, but at what cost...
Futures Forum: Knowle relocation project: financial profligacy in a time of austerity

And a 'twenty-year' window of borrowing is always fantasy in public administration:
Futures Forum: Knowle relocation project: fantasy 'cost savings over twenty years' are of no interest to people in East Devon

But, then, the District Council's ways with money always seem to be a fantasy beyond our ken:
Futures Forum: District Council's £20m investment fund: motion to debate the issue rejected

And public finance bodies are warning that things are going to get worse for councils:
Council tax increases in England | CIPFA
Running out of road: the councils using rainy day reserves | Public Finance

As reported across the country:
South Tyneside Council borrowing tops £630m - Shields Gazette
Mix 96 - News - Bucks County Council borrow £302 million
Figures show Redbridge Council more than £200m in debt as experts warn of risk | Politics | Ilford Recorder

Including in East Devon - and as noted by the EDW blog, this is not unconnected with its vanity project: 

“MORE THAN £86.6MILLION IN OUTSTANDING LOANS IS OWED BY EAST DEVON DISTRICT COUNCIL”

22 APR 2019

EDDC blames the overspend on loans (see last paragraph below) on “the purchase of assets related to service delivery, these being assets required “for recycling and refuse collection”. Are we to believe that it has ALL been spent on waste contracts and NOT on the £10 MILLION on HQ relocation (originally described as “cost neutral”)?

Owl would be interested to see a breakdown of the costs (but bets they will be conveniently avoided under a “commercial confidentiality” clause with the contractor …

“More than £86.6million in outstanding loans is owed by East Devon District Council” | East Devon Watch

Here's the story from the Herald: 

District council has £86.8 million in outstanding loans to pay

PUBLISHED: 12:00 21 April 2019

Harriet Clugston

More than £86.6million in outstanding loans is owed by East Devon District Council (EDDC).

The amount the authority has borrowed has also increased by £3million in just one year.

Experts have warned councils are risking taking on too much debt while others say that councils are simply adapting to plug funding gaps made by Government cuts.

The Chartered Institute of Public Finance and Accountancy says delivery of public services could be put at risk by unsustainable borrowing, after debt among UK local authorities rose to more than £100 billion.

By the end of December, EDDC's outstanding loans stood at £86.6 million, according to figures from the Ministry of Housing, Communities and Local Government. This was a four per cent increase compared to a year ago, and one per cent higher than at the end of 2013-14. All the outstanding loans were long term advances, which last for more than one year and are used to finance large projects or purchases.

The Chartered Institute says many cash-strapped councils are taking out large loans to buy property, as the rent they collect can be higher than the interest they pay on the loans.

Funding for councils fell by almost half between 2010-11 and 2017-18, according to the National Audit Office.

The government's Public Works Loan Board was the sole lender to EDDC as of December. The loan board offers low-interest loans to councils, without requiring them to prove they can afford the repayments. There is no limit to the amount councils can borrow from it.

Don Peebles, head of policy at the Chartered Institute, said: “With government funding in decline, it is unsurprising councils are having to adapt and find alternatives. While councils are borrowing for a wide range of purposes, such as building houses and investing in major infrastructure, one trend which has been concerning is the growth in investment in commercial property - which exposes public finances to new risks.”

A spokeswoman for the MHCLG said: “Councils are responsible for managing their own finances and making the right decisions for the communities they serve – including making appropriate investments. Guidance on council investments was updated in April 2018 with new codes that strike the right balance between allowing councils to continue to be innovative while ensuring that taxpayers' money is properly protected.”

An EDDC spokesman said: “The annual increase in borrowing identified was used to finance the purchase of assets related to service delivery, these being assets required for recycling and refuse collection.”

East Devon District Council's has £86.8 million in outstanding loans to pay | Honiton, Axminster and Seaton news - Midweek Herald
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Knowle relocation project: parkland transfer to Town Council

It had been feared that the parkland at Knowle would be out of bounds for some time:
Futures Forum: Knowle relocation project: District Council "have not yet agreed anything" about developers using the public car park and meadow for 'storage space'
Futures Forum: Knowle relocation project: How have PegasusLife been allowed to use the public car park and meadow for 'storage space' and what exactly does the promise of a 'bigger and better car park' once work is finished mean?

It seems, though, that the remaining parkland would be open 
- although, as the Herald notes, "the developer has decided to build its 113-home retirement community in phases, rather than one go, meaning it will be able to contain its construction materials without using the public car park" 
- meaning, according to the East Devon Watch, that it "won’t be much fun for those in Phase 1 (or their neighbours) to live on or near a building site until other phases (how many?) are completed":
PegasusLife ‘to build in phases’ at Knowle | East Devon Watch

Here's a report from the Herald: 

3.5hectares of parkland could be open to public from autumn

PUBLISHED: 06:55 15 April 2019 | UPDATED: 12:57 15 April 2019

Clarissa Place

The parkland at The Knowle. Ref shs 15 19TI 2187. Picture: Terry Ife

‘Significant’ parkland which would not be available for three years could belong to the town as soon as autumn.

The parkland at The Knowle. Ref shs 15 19TI 2185. Picture: Terry Ife

Sidmouth Town Council revealed on Monday night 3.5hectres of land at Knowle could be transferred sooner than expected after members were told the land and car park would not be available until the completion of PegasusLife's 113-home retirement community.

Town clerk Christopher Holland told the meeting the developer has decided to build its 113-home retirement community in phases, rather than one go, meaning it will be able to contain its construction materials without using the public car park.

In November, the Herald revealed the developer had been allowed the use of the lower car park and meadow as storage space for the duration of the works.

The council is in discussion with East Devon District Land about the land and the lower car park, which it hopes can be extended at a later date.

The parkland at The Knowle. Ref shs 15 19TI 2177. Picture: Terry Ife

Mr Holland told councillors: “It's good news at the end of the day, when we were discussing a three year deadline a number of you expressed some disappointment that it was going to be so long, so this is bringing things forward quite a bit but very dependent on Pegasus themselves.

“With trees come responsibility, if you want to have public parkland open to the public to view, it's the same as The Byes, you have to manage your trees carefully. All we are trying to do in our negotiations is get enough finance with the park to be able to look after it in the first few years without it being an additional burden on the Sidmouth tax payer.”

The parkland, which contains an arena space, was once a site for performers during Sidmouth's annual folk festival, and could be used for public events.

Councillor Ian McKenzie-Edwards said: “My person feeling here is this is a very significant and valuable piece of land within Sidmouth. I will feel a lot happier when it's in our bank and its secured. I can see in the future great economic and social benefit from the use of this land.”

Councillors raised questions about carrying out a tree survey and maintenance works had been carried out following the last sit visit three years ago.

Mr Holland confirmed the majority of the work had been carried out including large section of railings completely replaced or rewelded, and the brickwork around the buttresses of the trees where they were pushing out have been done.

Cllr Marc Kilsbie added: “I have the same observation and mindfulness that there are no restrictions and caveats put in there preventing what can and cannot take place on the parkland. Otherwise if there are huge restrictions on how it can be used it's a white elephant not an asset.”

Knowle parkland in Sidmouth could transfer to council by autumn | Latest Sidmouth and Ottery News - Sidmouth Herald
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Sidford business park >> A PUBLIC Inquiry to be held >> "The appeal will now proceed by means of an Inquiry and not a Hearing"

The Planning Inspector will be hearing an appeal over planning permission for an industrial estate north of Sidford:
Futures Forum: Sidford business park >> campaign group's latest update > BREAKING NEWS: Applicants submit appeal against decision to reject planning application

A correspondent has notified this blog that the Inspector will be conducting a public inquiry, rather than a hearing. 

There are concerns that the letter sent out by the District Council is rather 'vague': and yet it is clear that this will be a PUBLIC Inquiry, similar to that held for the Knowle appeal sessions:
Futures Forum: Knowle relocation project: BREAKING NEWS >>> PegasusLife appeal allowed > further reports 

As the correspondent notes: "Local folk need to be made aware of this, especially with local elections approaching".

Here is the letter sent out by the District Council:

18/1094/MOUT | Outline application accompanied by an Environmental Statement (with scale and appearance reserved) for the change of use of agricultural land to employment land (B1, B8 and D1 uses) to provide 8,445 sqm of new floorspace, new highway access, cycle and footway, improvements to flood attenuation, building layout and road layout, new hedgerow planting and associated infrastructure. | Land East Of Two Bridges Two Bridges Road Sidford
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Knowle relocation project: buildings about to bite the dust

How 'green' is the District Council's new build  HQ in Honiton?
Futures Forum: Green buildings in East Devon

Not as green as the old build HQ in Sidmouth:
Futures Forum: "A truly green alternative to EDDC's proposal"
Futures Forum: Knowle relocation project: saving energy costs - and challenging the justification to move

How much in danger is the new HQ?
Futures Forum: Knowle relocation project: how vulnerable is Honiton HQ builder? >>> Interserve goes into administration

Not much, according to the District Council: 

Interserve collapse 'will have no impact' on new council HQ

Interserve Construction Ltd were the contractor that East Devon District Council had used to build their new HQ in Honiton

East Devon District Council say the collapse of Interserve should not impact on their new Blackdown House HQ.

Interserve - one of the UK's largest providers of public services – went into administration last week after shareholders rejected a rescue deal for the company, which has 45,000 UK staff, and 68,000 globally. Interserve Construction Ltd were the contractor that East Devon District Council had used to build their new HQ in Honiton, which opened last month, but they have not ‘gone under’.

A council spokesman said that as a result, their contractors remain on site to work through the list of remedial works that need to be carried out on the £8.7m new building.

An East Devon District Council spokesman added: “We have kept a close eye on Interserve’s fortunes and we were sorry to hear that Interserve PLC has gone into administration. However, Interserve Construction Ltd did not go under and therefore the contractor can continue.

“East Devon took possession of its new headquarters Blackdown House in January 2019 and the building is operating well and at capacity since staff moved over fully in February. As with most new buildings it is generally the case that there is a list of remedial works to carry out and Interserve’s contractors are on site and working through the list. The council is monitoring these works closely, but for the moment we are on track with Interserve to finish off the list and meanwhile our new HQ is working well and fully open for business.”

The new Honiton Blackdown House HQ replaced the council’s former HQ at The Knowle in Sidmouth, while one third of the council staff are to be based at Exmouth town hall.

Shareholders of Interserve Plc on Friday voted 59.38 per cent against a rescue plan to address their mounting debt pile. The plan would have seen their stake reduced to just five per cent with lenders being handed the lion's share of the business.

However following the plan being rejected, Interserve said that in the absence of any viable alternative rescue plan it would formally apply to the High Court to go into administration. Administrators EY have been appointed under a so-called pre-pack administration, an insolvency procedure in which a company arranges to move its assets to a another owner before administrators are officially appointed.

Interserve collapse 'will have no impact' on new council HQ - Devon Live

Next week should see the Knowle given over to PegasusLife - who will then begin demolition:
East Devon officially opens new council HQ as they hope to hand over Knowle to developers by end of March
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Green buildings in East Devon

The 'greenest' building in East Devon is probably the largest cob building in the UK - in Ottery St Mary:
Futures Forum: Building Cob Castles in East Devon... on Grand Designs > five years on
Keppel Gate - Kevin McCabe Cob Building Specialist

Certainly mud makes for a very sustainable, local building material the world over:
Mud brick | YourHome
Shibam-Hadramout-YEMEN- the "new york" in the desert. - YouTube
Thermal behaviour of adobe and concrete houses in Yemen
The incredible adobe mud skyscrapers cities of Wadi Hadramawt, Yemen - SkyscraperPage Forum

If we look at what the District Council has been promising...

Ten years ago, we had the 'Carbon Management Plan':

brown-and-williams-and-carbon-trust-2009.png (1008×649)
Cynical smiles of the day | East Devon Watch

One of the features was a promised Return on Investment after x years or x use of m3 of energy - which many energy and construction firms offer:
Grundfos UK
Energy Efficiency made in Germany - Energy Efficiency
ClimateHouse Agency

But the District Council doesn't seem too keen on measuring this:
Futures Forum: Knowle relocation project: District Council rejects motion "for the ongoing costs to be published to show confidence that this project will breakeven"

Perhaps we need to look at something a little intelligent:
Intelligent building, definitions, factors and evaluation criteria of selection - ScienceDirect
4 inspiring examples of intelligent buildings
Building automation - Wikipedia, the free encyclopedia

If you're really looking for something intelligent, we need to go to Italy:
Muse_the story - YouTube

Meanwhile, we have LEED:
Leadership in Energy and Environmental Design - Wikipedia, the free encyclopedia

Which is facing its critics:

Twenty years ago, the U.S. Green Building Council piloted its LEED certification, which has reshaped architecture and real estate. But how much does it dent buildings’ energy use?

Reconsidering LEED Buildings in the Era of Climate Change - CityLab

LEED Was a Huge Advance 10 Years Ago, but Here Are the Four Biggest Problems With It – Commercial Observer 

And we have BREEAM:
BREEAM: the world’s leading sustainability assessment method for masterplanning projects, infrastructure and buildings - BREEAM
BREEAM or LEED - strengths and weaknesses of the two main environmental assessment methods

And again, it has its critics:

The cost and value of sustainability
A growing body of research evidence is challenging the perception, still held by many, that sustainable buildings are significantly more costly to design and build than those that simply adhere to regulatory requirements. Research by the Sweett Group[4] into projects using BREEAM, for example, demonstrates that sustainable options often add little or no capital cost to a development project. Where such measures do incur additional costs, these can frequently be paid back through lower running expenses, ultimately leading to saving over the life of the building.
BREEAM - Wikipedia, the free encyclopedia

There is an even more exacting certification process:
LBC | Living Future
Living Building Challenge - Wikipedia, the free encyclopedia

But can we get to 'zero-emissions' building?
Welcome to ZEB
Zero-energy building - Wikipedia
Futures Forum: Climate change > and getting buildings to 'net zero'
Futures Forum: A solution to our housing problems: the 'impossible' zero-carbon house

Back in East Devon, the District Council had made a lot of noise about 'reducing energy use' by relocating - and by giving us a 'BREEAM' building:
Futures Forum: Knowle relocation project: District Council cabinet meets Wednesday 3rd December: analysis of proposals

But, actually, not demolishing a building is the greenest thing to do:
Futures Forum: Knowle: old bricks vs new build: embodied carbon
Futures Forum: Knowle relocation project ... What do you get for a £15m refurbishment? ... part one
Futures Forum: "The greenest building is the one standing" >>> Why do developers prefer to demolish buildings than renovate them?

And if you can't do that, then go local - as with this charming new-build in Colyton:
Futures Forum: A solution to our housing problems: local materials, local labour
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Knowle relocation project: how vulnerable is Honiton HQ builder? >>> Interserve goes into administration

Last week we were being warned that Interserve was about to go bust:
Futures Forum: Knowle relocation project: how vulnerable is Honiton HQ builder? >>> "Interserve is likely to go into administration"

It just has:
Interserve shareholders vote against rescue deal | Reuters
Timeline: Interserve's path to administration | News | Construction News

However, it's still going to carry on - for the moment:

The company and the Cabinet Office, which oversees state suppliers, said there would be no disruption to the public services that Interserve manages and job losses were not expected in the short term and the pension scheme was protected.

Interserve’s chief executive, Debbie White, said: “Interserve is fundamentally a strong business and with a competitive financial platform in place we see significant opportunities as a best-in-class partner to the public and private sector.”

But the failure of another outsourcing firm, little more than a year after Carillion’s collapse, sparked fresh calls by trade unions and Labour’s business select committee chair Rachel Reeves for public services to be taken back in-house.

Interserve goes into administration after rescue deal rejected | Business | The Guardian

Now its competitors are looking to pick up some of the pieces:

Interserve’s uncertainty continued over the weekend as rivals expressed an interest in buying the most profitable part of its business.

It is understood fellow outsourcer Mitie contacted Interserve’s administrator EY over the weekend, as well as a consortium of banks and hedge funds which now own the firm, about buying its support services arm.

Another source said rival Serco was also considering a bid. Chief executive Rupert Soames is understood to be “watchful and interested” in the support services business in the interests of maintaining public services.

It is unclear how the Cabinet Office, which manages the outsourcing of public services, would view a rival taking over the business.

Rival outsourcers could buy out Interserve (IRV) support services business as Mitie (MTO) makes inquiries | City A.M.

The question for East Devon is what guarantees the builder of the new HQ in Honiton gave - as posed by the East Devon Watch blog:
Better hope new EDDC HQ is in good nick … | East Devon Watch
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Knowle relocation project: how vulnerable is Honiton HQ builder? >>> "Interserve is likely to go into administration"

We might never know how much the new District Council HQ cost:
Futures Forum: Knowle relocation project: District Council rejects motion "for the ongoing costs to be published to show confidence that this project will breakeven"

There are all sorts of unofficial figures out there:
Futures Forum: Knowle relocation project: or, how a new HQ costing £8.7m is valued at £3.5m
Futures Forum: Knowle relocation project >>> >>> a spanking new HQ for £5.6 million... or for £10.6 million?

We do know that the builders of the new HQ are facing considerable difficulties:
Futures Forum: Knowle relocation project: how vulnerable is Honiton HQ builder? >>> and how 'financially stable'?

And it seems that they are reaching the end of the road - and as suggested by the East Devon Watch blog, this might pose problems for the District Council should anything further need doing to their new HQ: 

BETTER HOPE NEW EEDC HQ IS IN GOOD NICK …

10 MAR 2019

… as its builder is on the ropes and 45,000+ people could lose jobs. Unless we, the taxpayers, pick up the bill – again.

Better hope new EEDC HQ is in good nick … | East Devon Watch

Here's the full report from the BBC: 

Government outsourcing firm Interserve faces administration

Simon Jack

Business editor

10 March 2019

Interserve is likely to go into administration on Friday.

Directors of the company, that employs 45,000 people in the UK, have told the BBC the firm has "a mountain to climb" to prevent it collapsing under the weight of its nearly £650m in debt.

A plan to swap the majority of that debt for new shares requires the support of more than 50% of the shareholders and the company's biggest shareholder - US hedge fund Coltrane which owns 27% - is currently dead set against the plan. Since many small shareholders don't vote - even in a crisis like this - the support of Coltrane is seen as crucial in getting the deal through. The board's plan would see current shareholders awarded 5% of the company - with the rest going to the creditors.

It is tempting to see Interserve as the next Carillion. An-overly indebted private provider of public services going to the wall after years of suicide bidding to win government contracts at the same time as paying out big salaries and dividends. While there are similarities, there are important differences.

Piece-meal sale?

If the company collapses on Friday - this is what will happen.

Accountants EY will be appointed administrators, they will then sell the company for a nominal amount to the current lenders (a mixture of banks and bond holders) who will own 100% of the new company.

The board then expects those lenders to sell the business units off piece-meal. The board does not expect any interruption to the company's underlying contracts or any immediate job losses.

The real impact will be on the debate over the appropriateness of using big private sector contractors to carry out essential public service work.

Game of chicken?

The government has been monitoring the Interserve situation closely and while it has felt unable to award a company close to collapse much new work, the Cabinet Office and the Department for Business Energy and Industrial Strategy are comfortable services won't be interrupted.

In fact, Interserve - minus its crippling debts - will arguably be in one of the strongest financial positions of any outsourcer.

There may yet be a last-minute deal to save the company. It is after all a curious game of chicken. If Coltrane insists on blocking the deal - it will get zero rather than the teaspoon of value its being offered under the board's plan.

The biggest loser - apart from the shareholders - will be the reputation of an outsourcing business model that will doubtless once again become a political football.

Government outsourcing firm Interserve faces administration - BBC News
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Knowle relocation project: failing to sell public space to cover costs

The District Council will be making a long-term loss on its new office block:
Futures Forum: Knowle relocation project: or, how a new HQ costing £8.7m is valued at £3.5m

It will also be making an immediate loss on the whole relocation project:
Futures Forum: Knowle relocation project: financial profligacy in a time of austerity
Futures Forum: Knowle relocation project: ready to move, but at what cost...

These losses are despite selling off parts of the Knowle parkland:
Futures Forum: Knowle relocation project: and green space
Futures Forum: Knowle relocation project: and its Arcadian garden

And all of this is in the context of national campaigns to save public green spaces:
Futures Forum: Knowle relocation project: 'Save our open spaces' campaign 'too little and so very, very late'

Which is in part due to councils trying to raise cash to pay for local services - which is not even the excuse the District Council in East Devon has used in the sell-off of its own parkland...

The Rural Services Network reports on councils struggling elsewhere:

04.03.2019

COUNCILS SELLING PUBLIC SPACES TO COVER COSTS

An investigation by The Bureau of Investigative Journalism (TBIJ), the results of which have been published by HuffPost UK, has found that local councils across the country are selling off publicly owned property to raise funds to provide services.  

TBIJ sent Freedom of Information requests to all 353 councils in England to gather information. It found that in some cases, the money is being used to make council workers redundant.

The investigation shows that since 2010 local authorities have lost around 60 per cent of funding from austerity cuts which has meant that community centres, libraries, youth clubs and council buildings and land have been sold to raise money.

The HuffPost UK calls this a ‘double-blow’ for communities that are ‘permanently losing public spaces…only then to use the funds to support the loss of jobs and services’.

The articles points out that this starkly contrasts with Theresa May’s statement at the 2018 Conservative Party Conference that austerity in the UK is over.

Full article:

→ HuffPost UK - Public Spaces Are Being Sold From Under You: Why We’re Investigating The Local Council Funding Crisis

Councils selling public spaces to cover costs - Rural Services Network
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