Middling managers

Having seen details of a meeting between the Chief Executive of Barnet Council and Nic Beech of Middlesex University, Mr Mustard wondered what the different ways where that they were planning to collaborate on in their 'partnership' (a much misused word is 'partnership', partnerships normally requiring formal documents setting out the obligations and rights of each party or else they aren't worth the paper they aren't written on).

Mr Mustard followed up on his wonderment by asking Middlesex University to enlighten him under the Freedom of Information legislation, viz:

(Two titans if ever Mr Mustard saw them, yes, the statues of Atlas on the cupboard behind)

It took three weeks but the answer came:

Mr Mustard wasn't convinced as he didn't think that two such well paid managers would have, or should have, a meeting without writing down a single word on the back of an envelope at the very least, or a jot on a napkin, a telephone number on the back of their hand, even electronic notes in their phones but no nothing, they were only having an informal meet and greet and not discussing anything substantive like a partnership as the tweet claimed. Something stank here.

Mr Mustard pondered. He changed tack, he sent a carefully crafted and detailed Freedom of Information request to John Hooton of Barnet Council. This is it.

So there wasn't a formal agenda but a meeting arranged by email:

This was followed up by Laura Norton the Corporate Communications and Stakeholder Manager (Mr Mustard boggles at such an esoteric title) who was in the meeting despite it allegedly only being a meet and greet and thus not substantive. Mr Mustard notes that the University didn't mention her attendance at the meeting in their reply.

So far from a pally 'meet and greet' as the University alleged in their response, it was 'a useful discussion' and topics included 'Communications' and 'Diversity and Inclusion' (coyly not mentioned in the University's official FOI reply) and there were 'useful conversations'. This email should have been disclosed by the University as it came within the scope of Mr Mustard's request. Anyone would think they didn't want a local blogger to take any interest in what they are doing (which is now probably working out how they will survive in the post pandemic period).

John Hooton followed up quite quickly in his email of 13 February.

 In the cover letter from Barnet Council extra information was profferred:

There should be an apostrophe in Council's

Ooh gosh a meeting to explain that a Council provides local services and a University teaches students, it must have been fascinating.

It is an affront to democracy that the CEO has so many informal meetings with 'partner' organisations, notice should be given of them and agendas published and action points published. If that isn't done it is far too easy to conclude either that they are just so much hot air or that dirty back room deals are being done. Far more would be achieved with an agenda and in a shorter time period. The well known Dummies series of books has one which includes a section on managing meetings and it includes having an agenda and action points.

Who else thinks that the University's FOI response did not meet with the letter or spirit of the Act? If you ask them any questions make sure you know the answer before you do and then jerk on their chain hard if they are economic with the actuality.

A really surprising omission from the meeting is any discussion of the replacement West Stand at Saracens for which Middlesex University are the supposedly anchor tenant, vital to the economic success of the project. Wasn't the risk to public funds worth a single word?

Yours frugally

Mr Mustard

Saracens Ltd - charitable donations

It used to be the case that companies had to declare within their published Accounts how much they had disbursed in charitable donations but that legal requirement ceased 5 years ago. Mr Mustard has though gone back through the Accounts of Saracens Ltd, the company which the rugby team income goes through, and found the following amounts.

Years to June

The trend was downhill

In 2014 the charitable contributions were 0.08% of turnover. That doesn't seem like much.

For money going the other way the Accounts of the Saracens Sports Foundation for 2017 reveal this information.

Charging £24,000 rent p.a. to the charity, now that does look a bit keen. Surely they should be given space at the ground free of charge?

Mr Mustard wonders if councillors knew any of this when they voted in favour of the funding for the West Stand & to answer his own question he doubts they really got into the details, just saw the word 'charity' & assumed that the rugby club were giving bundles of money to the charity arm, when that doesn't appear to be the case.

Yours frugally

Mr Mustard

Saracens - alternatives to the reckless loan

When the proposal to lend £23.9m to Saracens Ltd (later changed to Saracens Copthall LLP) was considered in July 2018 'alternative options' was a section in the committee papers, as it always is.

The meeting was given a shockingly short set of options by the Deputy Chief Executive, Cath Shaw, either yes or no to making the loan. According to Mr Reasonable she is paid £151,433 a year. You would think that someone paid that much would be able to find some other intelligent or creative alternatives. Of course the leader of the council wants this loan to go through, as he cast his deciding vote in favour of the loan when the committee vote was tied 5-5 in October 2018 and so if she wants to progress in her career, maybe to CEO one day, it is best not to rock the boat. Mr Mustard, or you, will have to come up with some alternatives.

1. Let multi-millionaires fund the loan.

The joke is that the two main men behind Saracens are both fabulously wealthy (which is fine by Mr Mustard who is happy with his lot) and could find this sort of money down the back of the sofa in order to fund their sporting plaything if they so chose. A quick trawl of the internet finds these sort of numbers to give you a scale of their wealth which puts them into the Sunday Times top 1000 rich list.




This is how Mr Mustard thinks the stadium should be funded.

2. Lend just a small portion of the money, say £1m

A 100% loan is risky for one lender to provide & so a consortium of lenders should be found. Other parties who will benefit could provide part of the loan. The Saracens Sports Foundation is active across North London (a dozen more local authorities to ask there) in Hertfordshire (approach St Albans City Council, Hertfordshire County Council etc) in Luton (who have a town council). The club itself has at least 10,000 fans as the average attendance is 9,400 and they don't all go to every game. Why aren't they being offered the chance to invest? Mr Mustard knows two keen fans. Both of them could easily stump £2,290 each and get a seat named after them & some other benefits.

Middlesex University could jointly procure the stand and stump up a capital sum which reflects its percentage share of the usage and then pay zero rent.

3. Pay for the social benefits

The following social benefits are what we are going to get from lending to Saracens Copthall LLP to build a new stand apparently.



A new community garden will be lovely but could be built regardless of a new stand.

What is the cost of the educational opportunities which are being sought? as the council could simply pay for them. They should also be putting the requirement out to tender (it seems to be taken for granted that Saracens alone can provide these). Providing these new social offerings doesn't need a new stand, there is a perfectly good East stand there already. There is plenty of green space around for exercise programmes which again the new stand isn't needed for. There are also plenty of other sports grounds within the borough which could be used and the council itself is building two brand new leisure centres. Can you guess where one of them is?
 

yes, it's at Copthall!

It looks to have all the facilities you could desire to help improve people's fitness and wellbeing.

Thus we see that the council plan to lend out £22.9m without the public knowing the value of social benefits they will garner as a result (cue frantic work by some poor employee of Barnet Council who now has to go and try and put a figure to this).

4. Charge a decent interest rate

Mr Mustard thinks that given the risk the loan rate of 6% is too generous. He did the collect out on a finance company in the City of London which made loans to customers who normal banks wouldn't touch. They charged 10% interest. They went bust and it was one of Mr Mustard's toughest ever assignments to get all the money back, which he didn't manage as it wasn't possible.

You may have others alternative ideas which Mr Mustard may not have thought of. Do enter them in the comment box below.

Yours frugally

Mr Mustard 

Saracens Ltd pay Saracens Copthall LLP

As ever there is a complex corporate structure when property is involved. The above, from the published accounts, shows the state of play at June 2012 of Saracens Ltd which is the trading company of the club.

Move forward 5 years and the financial situation is worse. When will the losses end?

In the July committee report the council said this:

That may well be the case but doesn't now matter as the loan vehicle was changed in the October report to Saracens Copthall LLP. It was also a cosmetic move with assets and liabilities being moved from one pocket to another without any fundamental change in underlying profitability.

The council planned to ask for assurances.

Sounds marvellous doesn't it, an assurance from rich shareholders. The trouble is that if you go back up to the statements made in the published publicly available accounts an assurance (a letter of support) isn't legally binding, it's like a weak promise that you can legally walk away from.

What the council needs to obtain in the way of assurance is a proper personal guarantee for the entire length of the loan, for the full amount of the loan and which cannot be rescinded and from a person with sufficient financial standing to make good their undertaking if it comes to it. In Mr Wray's case he is 70 years old so we need a guarantee that will run until he is 100. Not an attractive proposition is it?

If the council can't get cast irons guarantees the loan should not be made and if they can get cast iron guarantees then the backers should put their own money in, they are the ones with skin in the game, not council tax payers.

Yours frugally

Mr Mustard

Saracens - loan repayment costs

All the facts about this loan are top secret with Mr Mustard not even being trusted, as a member of the public, to be told the planned drawdown dates (as it will be in staged payments as the build progresses) or the frequency of the repayments or even the type of loan i.e. is the capital going to be repaid as we go along or will it be left to the end to repay in one lump sum (Mr Mustard is currently managing a multi-million euro portfolio of Spanish mortgages which have loan terms of up to 30 years on an interest only basis. Some were made to people as old as him so when they hit the ripe old age of 91 they will suddenly have to find £100,000 out of nowhere, their only 'asset' being a Spanish villa worth half what they paid for it and on which they borrowed 70%).

The repayment figures therefore are only indicative of likely repayments if you were to borrow £22.9m in one lump sum and then start repaying even instalments, including the capital, from month 1 all the way through to month 360.

Saracens will have to find £137,297 every month, even when there aren't any matches.

They will repay £49.4m in total (if they manage to) as interest comes to more than the loan. Given that Barnet Council were the lender of last resort, the only body foolish enough to put our (borrowed) money where their mouth is, they should have been charging at least 10% as this loan is, on Mr Mustard's risk rating index, somewhere between reckless Richard and crazy Cornelius.

Yours frugally

Mr Mustard

aka Dismal Derek (copyright Richard, allegedly cautious, Cornelius)

Loan to Saracens - sum per household

Mr Mustard happened to ask recently a question about the number of households in Barnet

This was the contentious item on the agenda

Yesterday evening at the Reckless Policy Committee of Barnet Council (though they call it the Policy & Resources Committee) three members of the public were sufficiently concerned as to ask to comment (speak) for 3 minutes on the subject of the proposed loan to Saracens Copthall LLP. What Mr Mustard said is recorded in the previous blog. Mrs Angry and Barbara Jacobson also gave the idea a thorough kicking.

Due to a conflict and there being a councillor not in attendance and not substituted (this will be checked when the minutes are published) the vote was tied 5-5 with Labour councillors voting against and Conservative Councillors voting for. Richard Cornelius used his casting vote in favour of the loan.

Barnet Council will now proceed to lend £22.9m to Saracens Copthall LLP and to borrow as required from the Public Works Loan Board (not that this is a public work and PWLB don't care about that as they know that a council has to repay them whatever happens).

There are more blogs to come but Mr Mustard just wanted to point out that every household in Barnet is lending, via its council, which exists in order to provide public services (a fine theory if not what is actually happening) the following sum to Saracens.

£155.71

Yours frugally

Mr Mustard

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.

Can't see, can't read, can't win

Mr Mustard has just written to the council's monitoring officer as an innocent error (possibly but why are errors by traffic wardens in the council's favour?) has turned into something which may be more sinister.

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Dear Ms Fiore

On 14 February 2016 my client 'Mr S' parked vehicle AB12CDE in a bay in Page St which does not have, and did not have on the day in question, a time plate (and seems never to have had one since the Event Day zone was introduced). The bay is therefore a free bay and not valid for enforcement action.

Before issuing a PCN it is the duty of the Civil Enforcement Officer to check that signs and lines are correct.

In this case the CEO, whether deliberately or negligently, did not carry out such a check, and the photographs taken by the CEO on 14 February 16 are attached. They disclose no signage.

My client made an online challenge to the PCN in which the lack of a sign was pointed out. The matter should have come to an end at that point. Instead the challenge has been denied (in the name of John Wild but the decision is unlikely to have been his) and the point about there not being a sign adjacent to the bay has been ignored. Whilst the failure of the CEO could of itself be excused as an oversight the second failure by the back office staff to properly consider the challenge changes the scenario to one of deliberately denying the facts in order to obtain payment of the PCN. This amounts, in my view, to an attempt by the council (acting through its contractor for whose actions it is liable) to obtain a pecuniary advantage by deception and given that you are the monitoring officer, responsible for ensuring that the council uphold the law, then you should investigate, along with your colleagues in CAFT, to see if this same combination of circumstances has occurred before and thus establish if there is a course of improper dealings where this particular bay is concerned.

For the avoidance of doubt this is a complaint that the council are trying to obtain monies from my client to which they are clearly not entitled.

Yours sincerely

Mr Mustard

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Doubtless it will all be a big misunderstanding and the facts won't have happened before and it's not a fraud and doesn't need investigating, officers have been retrained etc etc

If you think that you have been diddled by the traffic warden, at the very least you should make a complaint through the usual complaint channels (first.contact@barnet.gov.uk) as unless enough complaints are made the doubtful traffic wardens will not get identified. Honest ones have nothing to fear.

Yours frugally

Mr Mustard

Page St, near Saracens

Have you been given a PCN for parking, on an Event Day, in the bay where the black Mini is parked? If so, you probably shouldn't have paid as there isn't a sign in the bay and probably never was (per google streetview).

If you have been a victim, please send details to mrmustard@zoho.com

Yours frugally

Mr Mustard

How to make Saracens Event Days 100% clear to motorists

These signs might currently cost AU$5,000 a pop (c. £2,350) but the price will fall rapidly as usage takes off.

Mr Mustard can see that these could be deployed on every bay in the Saracens Zone and easily be kept permanently updated with the date of the next event. Motorists would then have no excuse if they missed the date and the number of PCN would plummet (do you see a reason why Barnet Council might not install them? oh you cynic).

Parking management do read the blog and also probably know about this new kind of sign. Let's see what they do.

Yours frugally

Mr Mustard