Barleythorpe Hall - A Conservative Deputy Leader that just squanders your money and rots a valuable historical asset!
says UKIP Dave Richardson
http://www.4rutland.com/dave/barleythorpe-hall-a-conservative-deputy-leader-that-just-squanders-your-money-and-rots-a-valuable-historical-asset
Some years ago we put together a scheme to develop a brand new Care Village.
This came about as a consequence of attending a meeting to discuss the existing Elderly Home at Barleythorpe Hall, where we were informed that to meet new Government Registration Standards the Council would have to spend £400,000. We ascertained this would only meet the minimum standard. In fact when Councillor Gale, Roper and myself visited the existing home we found 40 substantial things wrong, including many sharing rooms, no en-suites, single glazing windows, gas heaters in the rooms, narrow corridors that could not take a wheelchair, etc. As a consequence we suggested exploring building a brand new home that would meet maximum standards for many years to come. The obvious and perfect site was land already owned by the Council right beside the Doctors Surgery; Hospital; Learning Disability bungalows and railway station.
The end result was the development of the Rutland Care Village, since we had decided to look at all aspects of Social provision, hence the name of the Working group became; “Future Provision for Social Services Working Group”. As a consequence, instead of just providing a brand new home, a whole Social Care Village was developed with 75 beds, instead of the previous 36, with a proper dementia unit and an Intermediary Care Unit for those coming out of hospital, it also included higher dependency bungalows; a day centre Social hub; etc.
The site was leased for 35 years, the Council received a substantial capital receipt for this development in the order of £0.5M; there was also a saving of £150,000 per year on the contract from the previous running of the home at Barleythorpe, guaranteed for 10 years, a saving of £1.5M to the Council. It also released the existing home at Barleythorpe Hall which was valued at that time at anything from £2M to £3M.
Effectively this project saved £1.9M and should have realised a capital receipt between£2M and £3M.
The Working Group wanted the Hall placed on the market before it was vacated, we recommended that if a good offer came in we should take it, so that we had a turnkey operation with the new owner stepping in as the building was vacated.
In 2007 the Conservatives took control of Rutland Council, with the Conservatives electing Councillor Begy as Leader and Councillor King as the Deputy Leader.
One of the first actions by Councillor King, backed by the Conservatives, was to decide not to place Barleythorpe Hall on the market. Instead Councillor King wanted to become a developer and the Conservatives decided that rather than placing the Hall on the market they would create their own outline planning application for the site to develop houses and convert the Hall into flats, the cost for this was projected at £250,000. This of course was a complete waste of public money. The Council is not a developer, just because Councillor King decides he wants to build houses and flats on the site does not mean any prospective purchaser would want the same, there were expressions for some to continue using it as a home, for example.
Due to the time lapse created by Councillor King’s scheme, the dip in the housing market occurred and the window to sell was missed, although we are aware of several prospective purchasers offering in excess of £2M who have complained their enquiries have been stalled. The consequence is that this very historical building in a beautiful restraint village, which belonged to the famous Yellow Earl, Lord Lonsdale of AA and boxing Lonsdale Belt fame, has now stood empty and rotting for over 7 years. That, in our opinion, is an absolute disgrace.
Had the Council realised a sale when we wanted it of, say, £2M, then it would have saved a staggering£1.12M in interest payments alone on borrowing by the Council, which runs at 8%. Never mind the £250,00 spent on unnecessary outline planning application, the cost of securing the building over 7 years which is probably in the order of £100,00 plus.
A total in the order of £1.5M wasted.
What we have had is a magnificent building allowed to deteriorate, be vandalised, to have the new and valuable kitchens disappear with no explanation as to where they have gone. Sadly this is what Rutland gets when it decides to allow Councillor King to take charge and the Conservatives merely vote anything he suggests through without any form of scrutiny.
In fact, it is now suggested that Barleythorpe Hall is so deteriorated that the Council is unlikely to realise anywhere near this amount for it, especially as Councillor King has now managed to construct a Sixth Form College right beside it and a Football Club with a floodlit Pitch!
So effectively Councillor King has managed to totally squander your asset!
Yet the Conservatives believe he is doing a sterling job! And this was just for starters!
This is not Good Governance, the Council has a responsibility and duty to run “Effectively, Efficiently and Economically”, the 3 E’s. What is more, Councillors are duty bound to ensure this. That is why we voted against Councillor King’s crazy development scheme, which now shows we were totally justified.
We also believe the District Auditor has a major responsibility in this, since it is he that signs off the Good Governance Statement and that the Council is running “Efficiently, Effectively and Economically”, yet he has never commented on this matter, despite it being raised with him by us.
It was our intention to roll the capital receipt of £2m to £3m into the building of a standalone “state of the art” Sports Centre, since the Council already had £1.1M available for such from the sale of the Ferrers Primary School site. Again all blocked by Councillor King, who instead preferred to squander at least another £1M on putting a greenhouse on a clapped out swimming pool, which is now closed!
So Councillor King and the Conservatives who support him, have lost the opportunity of realising at least £2M for the Council/taxpayer and cost the taxpayer at least £1.5M of their money in rotting their asset.
What has happened here is a complete and utter waste of public money. No one in their right mind would sit on a valuable asset for 7 years just allowing it to rot.
Below is just one of the email correspondence with Scrutiny Members, recommending they look more closely at assets and projects put forward by Councillor King, there had been a response from Councillor King which suggested he had a complete lack of understanding of the finances and he is the Portfolio Holder, or else he was, yet again, merely trying to mislead Councillors.
Dear Fellow Scrutiny Members,
Some time ago I wrote an email to all Scrutiny Members reference assets and that “Members would be advised to look closely at other assets and projects put forward by Councillor King and assess just how much they have so far cost RCC and the Taxpayer”.
In my original email I referred to the incredible losses that have been incurred with reference Barleythorpe Hall having been sat empty, now over 6 years!
I stated that “by losing any potential sale and realising the asset value of £2M, Rutland Council has now lost a further £500,000 in interest that could have been realised“.
Councillor King then sent Members his response to this, stating; “The Director of Resources calculates that a loss of 4 years interest for a sum of £1m would be £120,400 (interest rates have been nearer 1% in recent years) . At no time as this Hall be valued at over £4m, which is the price it would have to be to lose £500k in interest.”
Members should know that the capital realised from an asset sale can only be used for a capital project or for paying off debt incurred against previous capital projects, which is the Prudential borrowing. My calculation was of lost interest which was against the interest we are currently paying in Prudential borrowing, which I had allowed at a modest 5%.
I would refer Members to recent Council Reports which state:
“In order to adopt this approach the prudential code requires the Council to satisfy itself that any borrowing is prudent, affordable and sustainable and within its approved limits. The revenue impact of borrowing is approximately £80,000 per annum for each £1m borrowed. This equates to 0.4% increase in council tax.”
In fact in Cabinet Report128/2011 September 2011 under Major Property Disposals, it stated:
“Funding of the capital programme is dependent upon capital receipts and where these are not optimised borrowing will be required which will have a revenue impact. For every £1m borrowed it costs the Council £87,500 annually (in interest and Minimum Revenue Provision (MRP).”
I was therefore being very conservative in my calculation of loss of interest at 5%, taking the £80,000 per annum on £1M, it would mean Rutland Council have lost in the order of £160,000 per annum for 6 years, or a staggering:
£960,000!!
Add this to all the additional costs that have been incurred takes this sum to well over £1M. Now compare this with the capital receipt Rutland Council looks likely to now realise and ask yourselves if this is good asset management!
What does not make sense is the fact that Rutland Council bought a Business Centre for around £1.3M when it already had Barleythorpe Hall stood empty on substantially more ground, which could potentially have made a 6th Form College. Rutland Council has had to borrow to purchase the Business Centre, which means a further cost already well over:
£100,000
However, where was this costed into the budget? This should have been part of an “Option Appraisal”, as should the Barleythorpe Hall sale.
What we have is not Asset Management, we have Asset Mismanagement, when will Members start to question the Portfolio Holder, who has done nothing but lose substantial sums of capital on one ridiculous scheme after another. I have said throughout we need facts, then and only then can Councillors make sound judgments.
Yours sincerely,
Councillor D.Richardson
P.S. I have copied the District Auditor in on this since he has to make an assessment against efficiency, effectiveness and economy, he also has to ensure the Prudential code is adhered to which means having proper “Option Appraisals”, particularly for borrowing against capital projects and I have not seen one for the borrowing of £1.3M to purchase the Barleythorpe Business Centre.
