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

Thursday, March 20, 2008

Kallin Harbour and RET

Kallin Harbour, GrimsayThe current expansion of Kallin Harbour in Grimsay is a masterpiece of innovative engineering, an grossly overdue, as the photo demonstrates.

It involved lowering preformed concrete boxes into the gap between islands to provide expanded harbour facilities for commercial and leisure craft. Having a number of clients who use the harbour, I know how grateful they are for the work continuing.

And continue it did, after a new funding decision by the Comhairle that is unbelievably complex, Byzantine, and far from the best for the Council as a whole.

Let me explain; and this gets tricky.

Due to the seabed not being quite as expected/surveyed (and there may be another story there), additional costs were forecast. The meeting was held in private so that the Contractors didn't know the budget that was being set, but if they were worth their (sea-)salt then they should know the exact cost of £500k anyway.

The money that should have been available was to come from the Hi-Trans budgets, but the Government have moved the capital elements from a central pot to the individual councils, with the Comhairle getting a £1m windfall/reallocation that has to be spent on Hi-Trans type projects from the Public Transport Budget.

Rather than committing this to Kallin, this £1m has been taken to central funds, and the money has had to be found elsewhere.

'Prudential Borrowing' was the answer. You might know it as HP. Or as the failed and discredited PFI scheme.

It involves funding an otherwise unaffordable capital project on the never-never, by using the savings that the capital expenditure generates to service the borrowings. This was called 'Spend to Save' and was a pragmatic way of encouraging a business like approach to the Public Sector.

Was. Now it is a mechanism to fund the unfundable by forcing savings elsewhere to pay the debt.

It has moved from
* Buy an old car using the savings on bus fares, to
* Build an extension on the house on credit cards, with the hope that you can cut your spending

The funding for this Prudential (sic) scheme is coming from the increased revenue at Lochmaddy Pier as a result of the increased traffic that RET will generate. And any shortfall from a £5 on the 3:15 at Cheltenham, no doubt.

To fund borrowing from a known income stream is sensible enough. To fund it from an unknown source on the back of a newly introduced policy whose impact we do not yet know seems a risk far too far.

Three questions:
  • How will the work be funded until RET kicks in in October?
  • If there is that much extra traffic travelling through Lochmaddy, how will the necessary repairs to that pier be funded?
  • Do the Government expect RET to be used to fund other capital projects, or to improve the travel experience for all passengers?


Captain Swing said...

Let me explain; and this gets tricky

You weren't kidding were you.

You can understand why us mere mortals think Councillors are a bunch of charlatans.

The truth is simpler though, very few, I mean none, of our elected elite understand this sort of high finance either, but pretend they do, it's called bullsh*t, and it's true, in their case it baffles brains every time.

The other big problem with our elected 'members' is that they dare not admit to not understanding high finance for fear it would make them look stupid, as a result they have no control over what goes on. Nothing new there then.

Anonymous said...

Why don't all your grudge bearing anti-councillor 'anons' stand for the Comhairle themselves if they've got all the bright ideas. Or maybe they have - and already been rejected by the voters....

Captain Swing said...

I'm full of admiration for those who are prepared to put themselves forward as Councillors, I'm sure it is a thankless task with little genuine appreciation for a job well done only brickbats when it all seems to go pearshaped. And no I'm not someone who has tried and has been rejected at the Polls. I just wish that we had a better calibre of Councillor. Not ones who are full of their own self importance who are unable to deal with their own ignorance on complicated issues other than to bullsh*t that they do understand, but ones conscientious enough to try to understand complex issues, to question, not just go along with the crowd.

And I'm equally sure that part of the problem lies with the way our Council is organised, the fact that there appears to be no Party Political structure (at least to the outside observer) and therefor no Party Politics for the weaker Councillors to hide behind when being bullied to support ideas or decisions they are not sure about. I realy think it would be in the best interests of all if the idea of an Independent Council were scrapped, it clearly doesn't work as well as a Council that has political parties making party decisions.

The current Independent Council set up, allows a few very determined, and high profile Councillors, to push some of these radical ideas through, and some of the more ordinary Councillors find it difficult to stand up to them.

I'm sure that a lot of the poor decisions made by the Councillors come from ignorance rather than anything else.

Anonymous said...

Best case of economic "out of my depth mode" was our convener saying recently during the RET announcements that the ultimate measurement of its success (RET) would be "lower prices in the shops".

Aye...right. Go to Slovakia then.