Spotlight

WTC: Budget/Precept ‘Deferred’

Nigel December 15, 2024 Whitby Town

WTC: Budget/Precept ‘Deferred’

– an “In My View” article by NIGEL WARD, summarising the annual Budget meeting of the WTC Finance, Policy & General Purposes Committee (FP&GP) held on 10th December 2024 (having been postponed from 3rd December 2024. due to key members inability to attend).

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I must begin with my apologies for submitting this report rather later than intended; I have been struggling to obtain all of the information that I would normally include to substantiate my findings.

I have meanwhile reported on my address to the Committee elsewhere and would urge readers to review that article as background material to what follows here below.

“WHITBY: The Silenced Majority” (pub. 14/12/24)

When it came down to the nitty-gritty, the FP&GP meeting may fairly be described ashaving been ‘inconclusive’. Throughout a thorough debate, well-chaired by Councillor Sandra TURNER, the salient fact emerged that the new Clerk/RFO, Mr Adam CHUGG – who assumed his position on 1st October 2024 (barely nine weeks ago) – has found himself in the extremely unenviable position of being called upon to produce a draft Budget for the Council’s 2025/26 Financial Year, not only at very short notice, but faced with a Public Record riddled with glaring omissions, ‘bequeathed’ to him by the former Clerk/RFO, Mr Michael KING. (Mr KING left his position on 15th August 2024).

Thus, Mr CHUGG was further disadvantaged by the complete absence of any ‘overlap’ with the outgoing Clerk, during which his search for necessary documentation could have been greatly assisted by Mr KING. This, alas, was not to be.

So I would suggest that Mr CHUGG’s task has been analogous to that of a man in very dark glasses confronted by a race-against-the-clock to complete a 1,000-piece jigsaw with scores (perhaps hundreds) of pieces missing – and not even the box-lid to guide his progress.

And bear in mind that this daunting task has been carried out alongside the pressures of the normal day-to-day running of the Council – the writing, researching, drafting and completion of necessary Reports, Agendas, Minutes, etc, without which the Council would have ground to a dead stop – whether or not anyone would have noticed.

1). The FP&GP Meeting (10/12/24)

The meeting itself began in the normal prosaic manner, with:

1. Apologies for Absence; (the absences of the nominal Chair – Councillor Linda WILD – and the Town Mayor, Councillor Bob DALRYMPLE (drew raised eye-brows in the Public gallery).
2. Declarations of Interests;
3. Public Participation; (I have reported on my Public Participation address to the Public Gallery and the Committee in my previous article, here (link). Another Member of the Public [MOP] spoke about the Council’s failure to follow up on repeated reports of trip hazards around the town).
4. Minutes of Meeting held on 8th October 2024;
5. Action Outstanding from Previous Meetings; and
6. Utility Contracts (Gas & Electric).

2). Agenda Item 7. DANFO

It was at Item 7. DANFO that the ordure came into contact with the air-recirculatory system.

DANFO is the name of the company with which the Council entered into contract to operate the town’s public conveniences, back in 2017, when Councillor Heather COUGHLAN was the Town Mayor.

I hold a copy of that contract – undated and unsigned – though surely there must have been a dated/signed copy held by both parties? In my fifty years in the record/radio/TV industry – a world in which mind-bogglingly ambiguous contracts are a stock-in-trade of the unscrupulous – I have never seen such a bizarre document.

To pick out one crucial discrepancy, Clauses 8.1(iv) and 10 (the reporting of malfunctions) are totally negated by 24.1.

And surely the Council’s delegated signatories must/should have been the (then) Town Mayor and the (then) Town Clerk/RFO (Mrs Pam DOBSON, formerly of Marlborough Town Council)? But where is that signed/dated contract?

Nevertheless, a modest profit was made in the first two years of the ‘deal’ (2017/18 and 2018/19).

3). Councillors’ Research

Charles ARNOLD-BAKER’s “Local Council Administration” – the Councillors’ ‘Bible’

Councillors are under a legal duty to scrutinise the Council’s financial and contractual arrangements. These duties are clearly specified in the “Councillors’ ‘Bible’“ (see above), without which, Councillors are left to ‘wing it’.

To say that matters became somewhat hazy after the 2017 ‘deal’ may be the understatement of the century. There would appear to have been ‘discussions’ with DANFO (arguably in 2019) as to the distribution of revenues which may (or may not) have resulted in an “agreement” to vary the terms of the contract, though it would appear that no written record of this “agreement” (which would have required the formal written consent of both parties – the Council and DANFO) can be located. It should go without saying that any “agreement” that was never committed to paper has only one useful purpose – on the loo-roll. Some Councillors have been attempting to get to the bottom of all this for over a year.

Then again, there are Minuted references to ‘discussions’ in 2021 (by which time Mrs DOBSON was no longer Clerk/RFO – and Mr Michael KING had been appointed to that role):

RESOLVED that the Clerk (Mr KING, since resigned) in consultastion with Cllrs DALRYMPLE, JACKSON (since resigned) and Mrs WILD be given delegated authority to meet and negotiate variations to the contract with DANFO . . .

However – and this may be critical – I can find no Report/Notes/Minutes recording the outcome of these “negotiations” anywhere in the Public Record – and nor can any of my Councillor colleagues, who have pressed the Clerk/RFO and await a response.

To be clear, I draw no conclusions regarding the absence of Councillor Bob DALRYMPLE and Councillor Linda WILD from the FP&GP Meeting of 10th December 2024 – or that of Councillor HARSTON. These things happen.

But neither I (nor any of my Councillor colleagues) have been able to unearth any details of what exactly was ‘discussed’ or what formal “variations” (if any) may (or may not) have been made to the 2017 contract. In which case, it stands as dated and signed – if it ever was – though I repeat that I cannot locate such a document. How can this entire episode have been erased from history? And why?

Moving on to the financial implications, it has been variously estimated that (due to failures in the cash-collection procedures in 2023/24) somewhere between £48k and £65k never materialised and it is a consequence of this missing sum that is understood to be contributing to the perceived need to increase the 2025/26 Precept (Local Council Tax) by a staggering 31.6%.

Much of this discrepancy has been attributed to a long-term wi-fi failure of a card-reader situated at the entrance to the public conveniences near the Bandstand – a failure unnoticed for 7 or 8 months, in which only £13.47 was recorded in total revenue – as against a pre-estimated income of circa £55k. It should, of course, have been noticed within days and the then Clerk/RFO should have reported the problem to DANFO and to his financial overseers, the FP&GP Committee. I find nothing on record.

I could easily trot out chapter and verse of these breath-taking lapses in due diligence (and may do so in the future), but, really? What is the point? The ABJECT FAILURE of the FP&GP to safeguard the Public Purse is so manifest as to admit no remotely credible case for the defence.

In my view, the FP&GP Committee should be VACATED immediately and RE-POPULATED (not excluding the possibility that one or two of the more capable existing members should be free to re-apply). Anything short of that is an insult to the intelligence of the Precept-payers.

Meanwhile, Members of the Public have been pursuing their own research.

4). MOP Research

MOPS – Members of the Public – whose trust has been tested to the limit.

Efforts by Members of the Public (MOPs) via FOIA requests to elicit further information on the subject have thus far drawn a blank:

Granted that Mr CHUGG is preposterously overburdened by the paucity of data easily accessible in the Council’s Public Record, it bears remembering that FOIA requests MUST be processed with 20 working-days. The two examples above are wildly out-of-time. Articles s.1(1)(a-b) of the Freedom of Information Act 2000 requires Whitby Town Council to state whether or not the information is held and, if so, to provide it:

Does the inability to comform to the requirements of s.1(1)(a-b) of the Act mean that the Council holds this information – or not? If so, why has it not been provided? If not, why does the Council not admit as much – and how can it set a Budget without the data which it appears it may not hold? Are the members of the FP&GP aware of the requested information? Have they ever seen it?

Beyond these two FOIA requests, I have spent literally hours interviewing present and past Councillors about what they know (or knew, or believed at the time). The gerneral assupmtion seems to have been that the Clerk/RFO dealt with it.

Even Councillor COUGHLAN – Mayor at the time – has stated in Committee that, though she was on the Council in 2017, she cannot recall the precise details of the DANFO negotiations.

The entire affair seems to have been swept out of the WTC Offices in the draft following Mr KING’s departure.

5). Agenda Item 8. BUDGET PREPARATION

The second major stumbling-block in the process of evaluating the draft Budget arose on the subject of the Council’s Reserves (the Reserves are separate monies – some of them ring-fenced – which, together, amount to what could be described as a ‘rainy day fund’. They exist to ensure that the Council is financially sound enough to deal expeditely with unanticipated contingencies that brook no unnecessary delay. (For example. the collapse, under an exceptionally heavy snowfall, of the roof of the Pannett Art Gallery, for example, or the Whitby Museum).

The legislation does not specify the precise percentage of the overall Budget that should be set aside as Reserves. However, all of the major quasi-governmental bodies advisory provide copious guidance, one of the most helpful and authoratative being that of the Chartered Institute of Public Finance & Accountancy (link).

The Clerk/RFO (Mr CHUGG) has made clear to members of the FP&GP that, though not mandatory, it is deemed appropriate for small authorities to hold Reserves is the range of 30-70% of the overall Budget – over half a million pounds in the case of WTC, and I endorse the Clerk’s opinion. That would suggest that something approaching 40%-50% would be on the lean side of prudent – meaning that WTC’s present Reserves should stand at roughly £200k-£250k. (It should be noted, however, that back in 2017, when the overall Budget was ‘only’ a tad under £300k, Reserves in the range £110k-£190k would have been considered adequate.

The following table tracks the reality over more recent years:

It is noteworthy that prior to the appointment of Mr KING as Clerk/RFO, the WTC Precept held constant for seven consecutive years.

£200k-£250k Reserves appear in the Budget – or the Bank Accounts.

I am no accountant. Absolutely not. But I am entitled to wonder how it is, taking into consideration the DANFO deal and the depleted Reserves, that the overall Budget could have been far, far smaller – by as much as £200k+.

In that event, Councillor Chris RIDDOLLS call for a zero increase (or even a decrease) in the Precept would have been viable. Certainly, Councillor Sandra TURNER’s call for an increase not exceeding single figures would have been a slam dunk.

But spare a thought for Mr CHUGG, who can only tabulate what he can find. If the cupboard appears bare, we must look to Mr KING – who is long gone.

So, in the end, the FP&GP did the right thing. It asked Mr CHUGG to dig deeper – and we are all free to contribute to that feat of palaeoarchaeology – and help him to bring a more cogent draft Budget to Full Council early in the New Year.

Happy 2025, Good People!