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The truths they don't want you to read....

Thursday, June 24, 2010

New ferries on HP?

My initial reaction to the proposal by the Comhairle to fund the purchase of new ferries was one of incredulity, followed by disbelief, followed by laughter. Then followed by a lot of thought.

It actually makes sense in the convoluted world that is now public sector finance. And it may have the virtue of speeding up the whole process and giving the community some say in what might actually be delivered to meet our needs, and not some public sector cash-limited vision of tourists in and sheep'n'tweeds out.

So how would it work? A simple explanation for the layman is never going to be simple, but here goes.
  • The Scottish Government is very limited in what it can borrow
  • The UK Governments has tightened finances, so borrowing is going to get even less
  • Local Authorities can fund almost unlimited capital expenditure by reducing future expenditure (it's called HP in the real world)
  • Local Authorities are funded by the Scottish Government year-by-year
  • The Comhairle agrees to buy the vessels and borrows the money to do so
  • The Comhairle sets aside (say) £1m of revenue expenditure for later years to fund the loan repayments
  • The Government undertake to increase the revenue grant to the Comhairle by £1m
  • The Comhairle reinstates the cuts, as they are now fully funded
Fantastic - in every sense - and totally unnecessary if we didn't have utterly disjointed public sector financing arrangements.

And who said accountancy was boring......


Anonymous said...

Was there not a separate Asset holding Company not set up who could do precisely what you describe AND DOES THE Comhairle not have enough on its plate.
Seaman Campbell not only wants all the Harbours in the Islands he now wants to get into the complicated and crazy world of Marine Finance and mportages. Its nonsense and he should stick to what he is good at - running a cabal to rip us all of on Fuel prices for as much as he can for as long as he can along with the other Island Oil Barrons

Anonymous said...

The end result is that the council get additional funding from the SG to fund the revenue implications of the loan that they get to buy a ship. So the council are the ultimate owners of the ship an Sunday sailings cease at once. Peace love & harmony is instantly restored to the WI; the ills of the world are cured & the inmates continue to run the asylum.

Anonymous said...

Evey time I hear the words Angus Campbel these days Dr No springs to mind. Does he spend all his time stroking a pussy?

Anonymous said...

Oh yes then they can stop the Sunday Ferry!