17 August 2011

La - la land

Some time ago my attention was drawn to a letter sent to the Western Gazette by Mr Vic Medley of Somerton. Mr Medley is a fanatical supporter of the 'old' Somerton Town Council ie the Somerset Suiciders and his fanatical enthusiasm for them is evident from the outset in his letter where he writes (his in bold):

How lucky we are that previous Somerton Town Councils have significantly enriched our town with their own valuable time and financial skill.

Example one: A previous town council bought the doctor's surgery and invested in the redevelopment and consolidation of our central car parks and toilet block (Paddock House, Cox's Yard and the Unicorn) for a net burden to us (the people of Somerton) of only £100,000. This secured the doctor's surgery (land and buildings) and free car parking for a one-off £50 per rateable household or, say, £20 per head.

This is a curious version of events when the reality is that Somerton Town Council borrowed £350,000 from the Public Works Loan Board to buy what they described as "a site upon which to build a community hall." (The PWLB document can be seen in the M&B section titled 'A Somerton Chronology.) Curiously, Mr Medley's heros conspicuously failed to develop this 'site' as a community hall with the result that it is today what it was then - a rather tawdry and unsuitable building which struggles to function as Somerton's 'health centre'. And all for just £350,000 plus interest, paid for by you and me. Fabulous! But Mr Medley was clearly warming to his theme:

Example Two: A previous town council acquired the old Atkins site in Etsome Terrace at a heavily-discounted price. Subsequent to which a previous town council swapped half of the Etsome site for the Edgar builder's land and building at 8 Carey Court and converted it into the well-appointed modern 300-seat community hall that we now know as Edgar Hall.

A previous town council achieved all of this, the purchase of Etsome Terrace, the swap and the conversion of the Edgar building into a magnificent community hall, for just £350,000 plus interest of £137,000 spread over 20 years ie £487,000 in total. Further, we still have the land at Etsome Terrace valued at £500,000 (as residential land) which means if we sold it (which we should not, should we?) we would end up with Edgar Hall for nothing. What an incredible and exceptional deal.

Lets deal with Mr Medley's first error, that 'a previous Town Council' aka the Keenan/Canvin administration, acquired the Etsome Terrace land at a heavily discounted price. Not quite true. When the Etsome Terrace land was declared surplus by Somerset County Council, and after protracted negotiations, it was offered to Somerton Town Council for either £220,000 or for £176,000, the later figure being 'heavily discounted'. But there was a catch which was that the 'heavily discounted figure' ie £176,000, had strings attached which precluded the sell-off of any of the land to developers. Now clearly this wasn't what 'a previous Town Council' wanted so, rather than take the 'heavily discounted', they opted for the significantly higher price. 

But here we are faced with yet another conundrum. Why did the Town Council buy Etsome Terrace? If you are to believe the statement made to the Office of the Deputy Prime Minister by 'a previous Council', the Etsome land was bought to be used for the 'possible provision of a public park'. (The loan application documents are to be found in the M&B section titled 'A Somerton Chronology.) No mention here of flogging the land off for a quick buck.

It would also be a shame to let Mr Medley's comment about selling off the rest of the Etsome land for another cool £500k pass by without commenting about the covenant that Somerton Town Council entered into with Somerset County Council regarding sale of the land. When 'a previous Council' agreed to purchase the land for the not discounted price of £220,000, they were bound to only sell 50% of the land, the rest to be kept for the Town. Mr Medley suggests that somehow the remaining 50% could be sold off in the future but something rather more intractable than the restrictive covenant stands in the way of that ambition. There isn't any 50% remaining. In fact, of the original site, only 14% remains under the exclusive control of Somerton Town Council because 'a previous Council' sold 59% to Edgar Homes and then ceded control of another 27% made up of access roads, leaving only 14% for Somerton.

Mr Medley is to be congratulated for recognising that the Etsome Terrace/Tin Dunny deal was a swap and not the 'two entirely separate transactions' noted in 'a previous Town Council's' press release dated September 2008 but he quickly drifts again into la-la land when he suggests that the Tin Dunny has only cost £487,000 in total.

The reality is that the land at Etsome Terrace had appreciated between 2003 and 2007 (nothing to do with 'a previous Council' but all to do with land values) and the Town Council struck a deal to sell 50% of the land for £950,000 but that was where things became sticky. Firstly, the Town Council let the purchaser, Edgar Homes, run the 'negotiations' and agreed to discount the sale price by around £100,000, reducing the receipt to £850,000 or thereabouts. Then there was the little matter of the £30,000 that the developer was said to have given the town 'in kind'. This was used, by the Town Council, to support the proposal that the developer be excused any S106 contribution. So, by early 2008 the Town Council might have received £850,000 but the money never turned up. What turned up was the swap of the Etsome land for the Tin Dunny which meant that rather than a capital receipt of £850k, the Town Council received the Tin Dunny and a cheque for £129k. Then there was the refurbishment of the Dunny which was estimated to cost £155k (bang goes that £129k) and which went more than 100% over budget, costing some £320,000, the balance paid out of Somerton Town Council reserves. Finally, Mr Medley says:

We have already paid off £245,000 (under £117 per household spread over seven-and-a-half years) of the £487,000 and only have twelve-and-a-half years at less than £10 per household per year to clear the remainder of £242,000.
Councillors on previous town councils gave a lot of unselfish time and effort to make all the above happen, often at their own expense. How lucky we are and how thankful we should be.

The future: The Edgar Community Hall is now making an operating profit. With a little more ingenuity, energy and enthusiasm from the current and future Somerton Town Councils, we should see our local rates start to reduce – if we're lucky!

When I look at Mr Medley's explanations they sound more and more like the words of a spendthrift chancellor seeking to justify reckless monetary policies. We've all heard them saying, 'Its only 1p on taxation' as if 1p from each of us doesn't really matter, at least not to them. But the sad reality is that Mr Medley's heros, those who made up 'a previous Council', raised the Precept for Somerton by around 17% per annum across a period of 8 years, giving Somerton the dubious honour, in 2008/9, of being the highest taxed parish in SSDC.

I think that it would be quite reasonable were Mr Medley to enquire how things might have been managed differently and , once again, I'd point any interested party to that section of M&B titled 'A Somerton Chronology'. That explains the 'bids' made to build a Community Hall and the availability of the Sports Field for such a purpose. A genuine 50% of the Etsome Land could have been sold to GPI Ltd who would have built a new health centre on the site. All of this could have been achieved without touching capital reserves. A Community Hall and a Health Centre and reserves intact. Now that would have been something for 'a previous Council' to be proud of but, sadly, they are lumbered with the consequences of their fiscal recklessness. Lucky that they have such a committed advocate as Mr Medley to misrepresent the facts so well.

Till next time, I'm still Niall Connolly