Comment to Policy & Resources Committee 23 October

Here are the words that Mr Mustard will utter this evening shortly after 7pm

Reckless, Richard, is what this loan would be.

For 31 years I have collected debts and provided credit consultancy. I regularly deal in millions. I didn't know when I started in 1987 that I would still be in business today.

Saracens Copthall LLP has accumulated massive losses.

Saracens Ltd has accumulated massive losses.

Ironically, the latest Saracens Sports Foundation accounts show reserves of a quarter million pounds. I admire their good works which take place in Chorleywood, Harrow, Harpenden, Feltham Young Offenders Institute, Hertford, Welwyn and loads of other locations. Those works will continue whether Barnet Council makes this reckless loan or not.

It is reckless Richard to lower the prudency requirements in the Treasury management strategy.

It is reckless Richard to lend for 30 years, a distance into the future that you cannot foretell.

It is reckless Richard to borrow in order to lend.

It is reckless Richard to fail to consult the public about this radical plan.

It is reckless Richard to borrow such a vast sum other than for the provision of local services.

It is reckless Richard to think that Barnet Council know better than commercial banks. The council's history with banks isn't a good one. The Icelandic bank investments didn't turn the expected profit.

It is reckless Richard not to have due regard for the sage advice of CIPFA to 'avoid exposing public funds to unnecessary risk'.

It is reckless Richard not to think of good value viable alternatives, why not just pay Saracens to provide the community benefits you desire rather than this huge risky loan?

There is little doubt in my mind but that my words will be futile and the loan may well get repaid at the start but I seriously doubt that it will endure for 30 years. I will be berating you later if it doesn't.

As I think you should be asking yourself the questions and not me, I will return to my seat.

Please don't be reckless Richard.

Fiscal reality has not yet dawned at Barnet Council

That recent quote is to be contrasted with earlier statements in the press that the new West Stand would cost £20m. Inflation in building costs isn't rare as contractors seek to find extras which were not in the original specification.

So where will the money come from? Barnet Council of course.

At the recent Policy & Resources Committee an item to lend money (an unstated amount, it was in the secret papers as you, Mr & Mrs Council-tax-payer, are not entitled to know how your council tax is going to be thrown about) to Saracens for up to 30 years, was deferred to a future meeting.

Apparently it was going to be lent to them at 'commercial' rates' - commercial for Saracens or commercial for us? Mr Mustard hears you ask. 

Do Barnet Council have a good record when it comes to matters of banking? er, no.

A Labour Party press release, repeating a council officer (member of staff) email, showed that £1.13m in interest was lost. The council were without their deposited funds from 2008 to 2015 and flat rate interest for the seven years was 0.59%. In 2008 a saver could have obtained a decent interest rate from a High Street bank.

Investing in an Icelandic bank might have seemed like a good idea at the time but anything which seems to be too good to be true might well be.

Given that the finances of Rugby weren't, and probably still aren't, generally producing surpluses, you have to wonder about the wisdom of lending to that sector and how anyone can tell what will happen over the course of 30 years.

What is the purpose of a local authority? To provide local services.

What is the purpose of banks? To make loans.

Is this the only commercial loan that Barnet Council wish to make? as if it is, the situation stinks of preferential treatment.

Mr Mustard couldn't find any mention of making loans in the treasury strategy for 2018-19.

Have you got a loss making business within Barnet?

Do you need a massive loan?

Do you need long term finance, up to 30 years?

Send an email to cllr.r.cornelius@barnet.gov.uk and see what Richard says in response. He usually does reply to emails, Mr Mustard has found.

Yours frugally

Barnet Council

There has been trouble at t'mill in Coventry & Northampton and history should be taken account of, mind you everyone knew Capita's reputation and the council blundered blindly into a 10 year contract.

Update:

Mr Mustard meant to point out the irony of the long term loan to Saracens being listed on the same meeting at which the council's own serious budget pressures were being discussed. Perhaps that is why the item was deferred as clearly borrowing to lend doesn't really fit with the programme.