A budget report, scheduled for discussion at Thursdays Cabinet meeting reveals that TDCs cash reserves, which are set aside to pay for emergencies and unexpected events, will be reduced to £6.6million in the 2017-18 financial year. Comparison with neighbouring council’s and advice from the Local Government accountancy body the Chartered Institute of Finance & Accountancy (CIPFA), suggest that TDCs reserves should be at least 3 times greater than has been allocated for 2017-18. According to the report a council the size of Thanet “would normally hold in excess of £20million” in reserves. However, allowing for the financial risks faced by TDC, the report warns that even £20million “may be on the low side” of what may be required to manage some of the difficulties the cash-strapped council is likely encounter.The report lists a series of major financial blunders for depleting TDCs reserves including
- The secretly approved TransEuropa Ferries fee-deferral deal which cost the council £3.4 million.
- £6 million spent on legal fees and compensation for TDCs unlawful banning of live animal exports from Ramsgate Port
- An overspend of over £3 million on the Margate Dreamland project including a compensation payment of £900,000 to Dreamland operator Sands Heritage
- The forthcoming prosecution of Thanet Council for breaking Health and Safety laws which could be extremely costly.
The report states that the council “carries significant risk by holding such low levels of reserves” and could easily find itself in a position where it “faces a substantial liability which cannot be funded without unplanned actions that could damage services”. In signing off TDCs annual accounts for 2015-16, the council’s external auditor expressed his concerns about the perilous state of TDC finances and recommended the council to “take a prudent approach to addressing the budget gap and identify cost savings and income generation to replenish reserves to help manage the known and unknown financial risks”.
This report is extremely worrying. It confirms what I had suspected for a long time; that the council is in a vulnerable financial position and is unprepared to deal with forthcoming multi-£million claims against it. First there is the ongoing prosecution of Thanet Council for alleged breaches of the Health and Safety at Work Act and the serious physical damage caused to around 20 TDC staff. The court fine and compensation payments which TDC will have to pay could possibly amount to several £millions, taking a large chunk from TDCs already depleted reserves. Also, TDC is yet to agree a final compensation payment to the former owners of the Margate Dreamland site which, I am led to believe, could easily be in excess of £10 million.
The blame for this unacceptable and totally avoidable financial mess rests fairly and squarely on the shoulders of TDCs previous Labour administration who, in my opinion, recklessly squandered close to £14million of taxpayers money by breaking the law over live exports and being forced to pay compensation, for massively overspending on the badly planned and incompetently managed Dreamland project, and defying economic logic by secretly propping up a failing ferry company for more than two years without telling anybody.
I’m disappointed that instead of fessing-up an apologising for their incompetence and instead of investigating the appalling record of senior Labour councillors over their mis-management of Thanet Council’s finances during the period 2011-15, Thanet Labour Party has allowed some of those responsible to continue in office as councillors or to occupy prominent party positions. This is outrageous. It demonstrates Thanet Labour’s contempt for local people and shows just how arrogantly out of touch they are with the local community. I would have hoped, with the reelection of Jeremey Corbyn as Labour Leader, that the old skool gang of self-serving lazy fuckers that masquerade as socialists would have been booted out of the party long ago for creating a toxic legacy which has made the party almost unelectable in Thanet