Speech by Cllr Howard Jones, Leader of the Conservative Opposition Party at Full Council on Tuesday 23rd December 2008 –
Mr Mayor
The reason we are here this evening is to discuss the Scrutiny Panel’s
recommendation with regard to the Executive decision on 9th December 2008 to make a donation to or give a subsidy to the Kingston Theatre Trust to the tune of £600,000 per year for three years - a total of £1.8 Million.
This donation or subsidy is thinly disguised as a support package in
exchange for services.
We on this side are not against the theatre as such- but we are against the expenditure of council tax money on the running of the Theatre.
So was the leader of the Council until recently. We have always been
consistent in our approach to this matter.
He has changed his mind and gone back on promises that he made in the past not to spend Council tax money on the running of the theatre.
There are so many competing demands for money in this Borough that
we cannot find any good reasons in the Executives decision to support this change of mind against the needs of elderly people in need of day care services and users of support services such as Springboard who are now looking for alternatives.
The provisions for the needy at Springboard could have continued for a further four years or more with this level of funding
We realise that the executive – seven members - is the decision making body in this Council but we believe it right that in such an important matter the whole Council – forty eight members - should have the right to comment and make its views known on such an important matter even though an executive meeting has been timed for later this evening which will no doubt rubber stamp its decision in spite of the recommendation of the Scrutiny Panel and whatever this Council meeting may recommend.
We understand that that is the Constitution and that’s the way democracy works in this Borough.
We shall ask for a vote to support the recommendation from the
Scrutiny Panel that “we do not endorse the executive decisions having
regards to the funding stream of £600,00 per annum” Our objections to the payments totalling £1.8 million of Council tax payers money are listed in the document that was produced at the end of scrutiny last week and forms part of the papers for tonight’s meeting.
How can the Council seriously make a pledge of £1.8 million to a
Trust, which is, to all intents and purposes bankrupt. The Chairman of the Trust has told us that without £900,000 before the end of this month the Trust will be insolvent and legally have to cease trading.
This Council is going to give this money to the Theatre Trust without
having completed its due diligence. I find that unbelievably naïve and
bordering on careless and even negligent to give this sizeable sum of money without having completed the due diligence.
It is inconceivable in any business venture that you would give this sum of money to an entity that cannot pay its way and that this Executive and Administration would do it without carrying out a very thorough due diligence first.
Secondly if you were truly prudent you would not give £1.8 million without there being a business plan in place in support the way in which the money will be spent by the Trust. In this case can you believe that there is no business plan to review? There is no three year plan which could help convince anyone that the business is viable and that the Council is supporting a going concern or at least a business with reasonable prospects of surviving with the £1.8million infusion of public cash.
The fact is that everyone now seems to accept that without a very serious form of funding that running a theatre of this type is not sustainable without substantial public subsidy. This certainly denotes a dependency culture and not one as we were told in 2006, when the original business plan was put before the Council, was sustainable and robust. We have serious issues about this when taking into account the amount of money the Trust was short in its budget provisions on that occasion. Was this Council conned into making those loans to the Trust – was someone economical with the truth? I leave you to decide.
In order to rush this through, the Executive made arrangements to
suspend Contract Standing Orders – in other words all the protections
of the Council’s own procurement rules have been set aside. The protection that residents have for rigorous scrutiny of contracts, value for money and good practice have been ignored.
I find this situation nothing short of scandalous and believe that the
Leader of the Council and the Chief Executive have fallen down in their
duty to Council tax payers and to this Council by allowing or using this suspension of Standing Orders to avoid proper procurement to
take place.
We are now faced with a situation where we have no contract to review
and no listing of services supposedly to be provided – actually we have
a shopping list but no contract but nothing firm to base any contract
on .We were given to understand at Scrutiny that the services would
include among other things the use of space and some concessionary
tickets for youngsters –but were these not already offered in
the support arguments for the 2006 failed business plan?
How much will be spent on space and how much on concession – we
do not know - there is no contract to view, no contract to review. You have to rent a lot of space to spend £600,000 in a year!!!
No this is not about services to be provided by the theatre this is just a
trick to justify the subsidy – why not just call it a subsidy and be done
with it?
You may ask why this Executive has approved the repayment of two
loans of £900,000 each totalling £1.8 million in the package, two loans which have been provided for in the books of the Council or should we say written off – it amounts to the same thing
Shall I tell you why?
It’s because the Executive could never justify giving another £1.8
million to the same entity that had defaulted on a loan of the same
amount only a couple of years ago - what would the auditors have
said about that?
They would have been as unhappy as I am. The farce of a loan agreement with repayment of £1.8 million over 100 years is only so that this incompetent Executive can say – there is no outstanding debt – there is a loan but it is in the process of being paid off.
The whole of this story is unsatisfactory – the way it has been dealt with – the slowness of the decision making – the ineptitude of the Executive and I therefore ask you to support the Scrutiny Panel’s recommendation.
What would we have done?
We would have reacted much more quickly to the knowledge that the theatre was in trouble – the timing of these proceedings throughout has been dictated by the Executive – forget stories that we have been trying to wreck this decision – we know it is up to the Executive to decide – if this Council Meeting is a talking shop as some Lib Dems have said then so is Scrutiny – so are all the other Committees – because it is the Executive that has the final say – it has taken them at least since mid November officially to get this issue moving. Although there is evidence that they knew about the financial problems back last summer.
A hysterical member of the Administration or two of them at the Scrutiny Meeting accused us of wrecking the theatre.
Not so - it’s the Executive in their incompetence that is wrecking the theatre if that is indeed what is happening. They are the decision making body – we actually decided to bring forward the Scrutiny to enable the matter to be dealt with in a timely way. We could have waited the five days after the Executive decision to have called the matter in for Scrutiny. That would have been wrecking and had we wanted to we could have done that. We actually recognise the democratic process unlike the members opposite – some of whom spent the whole of their allocated speech time to follow this illogical argument – with no time spent at all on the actual issue being debated by Council – so much for their take on Democracy in action.
It is hard to believe that in the time available – from the moment they knew that the theatre was in financial trouble that there was no time to do the due diligence – no time to demand a business plan –no time to examine other options - what has this Executive been doing?
We were told by the Chief Executive and others at various meetings that all was fine with the theatre when in reality we now know that there have been severe financial problems since the summer.
If we had been in power we would have reviewed the finances of the theatre much sooner and looked at services which the theatre might give to the wider community much like this Executive but at a properly agreed fee in a more timely manner with competitive tenders and proper business plans
We may have considered an option whereby we would have taken a share in the theatre trust as an investment and so we would have had some actual control on how the money – our tax payers money is spent.
We would certainly have required membership of the failed Trustee Board to have been overhauled with many of the members being sacked for incompetence and a more business like membership being appointed.
We may have looked at a plan where we would have invested some money but would have expected to see a return on our investment and a share of any profits made in the future
We would have looked seriously for other companies to rent the theatre – other theatre companies, orchestras choirs and other prospective users to take over the lease. Why is this executive so wedded to the present Theatre Trust – is it because of old associations – are we paying back some sort of old debts in kind?
I don’t know
but hey
what they are doing now is getting us into a real mess – its of the Executive’s own making and it will come back to haunt them year after year. The closing down of this Theatre Trust would have been a final option which we would not have been happy about – but we do not subscribe to the view that this Trust is the only body able and capable of running the theatre.
As far as the issue of closing costs is concerned – this is another
Mirage spread by the Executive. The figures are spurious – questionable at the very least. They take no account of the probability that if we were in power we would find other tenants. Thus the figures are totally misleading – only put forward as a blind – although actually it is hard to see this Administration ever being able to find any one else to run the theatre they are so wedded to this current tenant of the premises. .
To say that the university would not still have its meetings and degree giving ceremonies at the theatre with some other theatre company as a tenant is not sustainable point – because for all the reasons given by Professor Jones at Scrutiny they loved having their ceremonies at the Rose in the heart of Kingston and surely they would deal with whoever had control of the lease to continue their successful ceremonies.
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