Creditors grab the Brunel Centre

In a rather complex chain of financial transactions, it appears that the Brunel Centre has been forced into the hands of ‘fixed charge receivers’ by the fall in property values in recent years. The centre — which is owned by a Jersey-registered company — had breached some of the terms of a loan — traded on the Irish stock exchange — of over £110 M in the first half of last year. The creditor’s agent — appointed after the default — had also had the centre revalued, reducing its worth by almost a third, down to £87 M, less than the value of the loan. The closure of the Liquid & Envy nightclub was estimated to have lost the centre income of £90,000, but this was less than 4% of their total income.

With the loan due for repayment on 25 April this year, and with over £100 M of the loan still outstanding, the creditors were clearly getting worried about the chances of getting their money back, and have taken possession whilst considering options, including the possibility of selling the centre. The appointment of receivers was announced on 22 December.

Car park design Musings

It seems that unadorned multi-storey car parks have gone out of fashion. Not that they were ever something that could be described as ‘fashionable’. But at least the simple construction of a series of floors, plainly open to the elements, was unpretentious and offer scope for some styling. Looking down Islington Street three such car parks from the 1960s and 1970s are visible. They’re not pretty, but they are functional, with Islington Street Car Park and the Menzies Hotel quite well matched in their brickwork.

Now for the first stage of Muse’s Union Square development something far less simple has been proposed to replace — on a different site — Carfax Street Car Park: a car park encased in aluminium and terracotta ‘fins’. According to the architects, this freak of architecture has

a language for the building where the whole was greater than the sum of the individual parts…. The façade design balances the practical requirement of allowing natural ventilation through the building and creating a striking visual appeal to the building.

Only in the mind of an architect could an overgrown fence be thought of as having ‘a striking visual appeal’.

In comparison with that, the block of 45 flats to be built nearby are almost stylish. And in the artist’s impression of the flats they felt obliged to hide the car park behind some trees!

Swindon housing supply

Today the planning enquiry starts into the planning application from Persimmon and Redrow Homes to build near Coate Water at Commonhead. This is what’s left of the former ‘Swindon Gateway’ project.

With other areas identified for house building — for example Wichelstowe and Tadpole Farm — already having space for many thousands of houses, it is perhaps timely that just two weeks ago the Department of Communities and Local Government published figures for housing supply during the last financial year. For Swindon, the figure for ‘net supply of new dwellings’ is down by 11% compared with the year before. (By comparison, across the whole of south-west England there was no significant change, and for England as a whole there was a decrease of 6%.)

Net housing supply for Swindon

Year	2004-05	2005-06	2006-07	2007-08	2008-09	2009-10	2010-11
Dwellings	1710	1550	2260	1940	970	880	780

At the rate of building seen in recent years, land already identified for new building is sufficient to keep the builders going in Swindon for many years. Even if they forecast a recovery in the housing market, for the developers to argue — as they no doubt will — that there is a desperate need for extra land to be released for housing in Swindon is fanciful in the extreme.

East Wichel — in search of ghosts

Last night in their Inside Out programme the BBC presented a report on Wichelstowe. The report was introduced by Alastair McKee as “The Homeowners who say they’re living in what amounts to a ghost town’, yet the reality is very different.

The BBC have interviewed many people in East Wichel over recent weeks — komadori was one of them. The views expressed by many in those interviews were that it’s a very nice place to live. The community spirit is great and there’s quite a bit going on. It would be nice if there were some more facilities open in the development — such as some shops and a children”s play area — but given how slow the housing market is, it’s no surprise things are taking longer than originally planned. Some of the first that were housed in the area by Sovereign Living feel let down as things haven’t turned out as planned, but most that have moved in since knew it was going to be quite some time before facilities would be available. In short, it’s nice, it could be better, but for most there haven’t been any surprises.

Watch Mr McKee’s report and the impression you’ll get is distinctly grimmer. No mention of community spirit, only of ‘out reach’, despite filming community events. Little mention of what people expected before they moved here, only of what more they would want. Only five interviews were used of the many that were done, and many whose interviews were left out have said their comments were more positive than those used in the report. Even the interviewee in the most critical interview shown in the report has said her interview was edited to leave out the good things she had to say about the community. And where are “The Homeowners who say they’re living in what amounts to a ghost town’? Despite Alastair McKee’s introduction, none of the interviews in the report express that opinion. Fast forward through the programme to leave out Mr McKee’s distortions and listen only to the interviews, and the impression you’ll get is of a far more contented community than the report portrays. Yes, what may one day be West and Middle Wichel look rather forlorn, with roads in place years before they will carry traffic, but the East Wichel community is coming along quite contentedly thank you, albeit rather slower than most living here would have liked.

No doubt to many that watched the programme, Mr Greenhalgh’s defence of Swindon Borough Council will seem rather aggressive. To me as someone aware of the background of the report, he was giving a biased reporter everything he deserved.

Garry Perkins’ reverse commitments

The universe occupied by Mr Perkins is clearly a very topsy-turvy place. In all other places, if one wants to show commitment financially, one gives money rather than taking it. In the Perkinverse, it’s the other way round, Thus with several public sector bodies — including Swindon Borough Council — stumping up £3.5 M to remodel Whalebridge roundabout, as a prerequisite to Muse even starting their Union Square development, Mr Perkins is claiming that this shows commitment by Muse.

The fact that there’s £4 M invested shows Swindon is serious, it shows Muse is serious.

And even the first phase of the Union Square development will mainly be paid for ultimately by the public sector. It consists of a car park — that Swindon Borough Council will buy — sheltered housing, and a health centre — to replace the NHS Carfax Health Centre which will be demolished to make way for the main part of Union Square.

The only commitment in evidence here is that of Swindon taxpayers’ money, being spent up-front, well before the commercial developers have even submitted detailed plans.

Wi-fi’s dead — long live wifi!

The report to next week’s special cabinet meeting of Swindon Borough Council makes it clear that their venture with our money to bring wifi to the whole of Swindon is dead.

So far as the Council’s interests in Digital City is concerned, further legal and financial advice will be required in this matter following which it is suggested that the Chief Executive, in consultation with the Cabinet Member for Finance, be authorised to take such action as he considers necessary to protect and, if appropriate conclude, the Council’s interests in Digital City and ensure that the network assets deployed in Highworth are transferred in the first instance to the Council’s ownership.

Conclude the Council’s interests, i.e. dead, finished, failed. And do we get any apology for that failure? No. Far from it. In fact, reading the report you could be forgiven for thinking the project had been a success.

Despite Digital City having failed to make interest repayments since late 2010, the granting of the loan has still proved to be financially advantageous for the Council. Sums received in interest and arrangement fees total £10.5k, while investment of the sums advanced to the company would have generated £6.9k to date at the Council’s average investment rate of return.

Let’ forget, shall we, that the original proposal said that Digital City would have repaid its £450k loan from us, the tax payers of Swindon, in full within two years. Instead, lets just be grateful. for £10.5k.

In place of an apology, we get a new proposed scheme, between Swindon Borough Council, an unnamed investor “under the ultimate ownership of a Global Telecommunications Company with annual revenues in excess of $3b US.” and that company well known for successful IT projects, Capita. Capita already provides numerous services to Swindon Borough Council. The report gives no indication as to whether Swindon Borough Council would have to stump up more of our money for this deal to go ahead. It also tries to suggest that the return on this new investment will constitute a return on the investment in Digital City (UK) Ltd.

The financial return to the Council is, therefore, enhanced by its investment in Digital City and the resulting Highworth pilot and the Council will now get a return on its investment. This will equate to the loan advance of £400k plus interest by year five or earlier depending on revenue share and this financial benefit will continue to accrue in future years…. Through these arrangements with Capita, SBC has the potential to receive significant return based on sales targets being achieved over 5 years, part of which will be credited against the loan of £400k to Digital City, and accumulated interest. Current indications are that this amount is likely to be repaid over approximately 5 years.

5 years? That’s in addition to the 2 years over which the loan to Digital City (UK) Ltd was meant to be repaid. And unless this new investor is going to take over the assets and liabilities of Digital City (UK) Ltd, then to suggest that this is a repayment of the loan to that company is the most creative of creative accounting. As the report makes clear, no such takeover is envisioned.

The Council’s intention will be to secure an orderly extraction of our interests from Digital City, with its assets being transferred to SBC to ensure that the Highworth infrastructure is kept intact. To ensure this happens, it is suggested that the Chief Executive be authorised, in consultation with the Cabinet Member for Finance, to take such action as he considers necessary to protect and, if appropriate, conclude the Council’s interests in Digital City and ensure that the network assets deployed in Highworth are transferred in the first instance to the Council’s ownership.

So effectively, Swindon Borough Council will exercise its rights under the loan agreement with Digital City (UK) Ltd and take over the company’s network assets. It will then enter a new venture with Capita and an unnamed company. On that basis, the new venture will owe nothing from the first, despite what the report may try to suggest.

The report to Swindon Borough Council’s cabinet is written my Mr Hitesh Patel. Mr Patel is an ex-director of Digital City (UK) Ltd. Mr Patel was also an author of the original recommendation to councillors to invest in Digital City (UK) Ltd. Perhaps, then, it’s unsurprising that he writes about that investment in such glowing terms. But given how poor his advice was the first time around, and that he didn’t know he was already a director of the company he was recommending an investment in, would anyone with any sense really trust his advice again? But then, would anyone with sense have made the first investment? Answers to that on a no-questions-asked cheque for £450k please.

Yet another pub for East Wichel?

It’s less than a month since Swindon Borough Council granted planning permission for Marston’s Inns to build a pub-restaurant near the Croft Road entrance to East Wichel — on Langdean Road between Blackhorse Way and Frogden Road. Councillors criticised that application saying “it wouldn’t win any architectural awards”.

Now Mitchells & Butlers have submitted a planning application for a site almost opposite — on the stub of Croft Road that leads to a veterinary clinic — to build a Toby Carvery. The application refers to the new draft National Planning Policy Framework, saying that as the local plan is, in their view, out-of-date the application should be allowed — despite appearing to contravene almost every planning policy the council has. And although the application acknowledges that

The site is considered to constitute a free standing gateway site to the Witchelstowe (sic) development

the application almost entirely ignores the Wichelstowe design code:

[B]eing situated beyond the boundary of Witchelstowe (sic) it is beyond the remit of the Design Code….Materials and features have been specified to reflect some of the guidance within the Design Code, whilst retaining an appropriate degree of separation.

It’ obvious from the drawings that actually very little effort has been put into the design at all. Imagine an unadorned prefabricated concrete box, and you’ll have a fairly accurate idea of what this building will look like. In comparison with this, Marston’s planning application was positively imaginative.

Anyone wishing to comment on or object to the application must do so by 29 September. Comments and objections can be submitted online.

Hedges on sticks

Welcome though the changes to Swindon Railway Station forecourt may be, the artist’s impressions in the Station Update leaflet — that’s been distributed near the station — show a rather odd fashion in topiary. So the ghostly passengers and ghostly taxis are surrounded not by ordinary trees — that privilege is reserved for customers of the coffee shop — but by what look like carefully fashioned hedges… on tall sticks. Maybe it’s intended to make it easier for pedestrians, so they can walk underneath what would otherwise be low trees.

Hopefully in real life it will look far less bizarre than the artist has made it appear. Hopefully too, they won’t prove costly to maintain in this form either.

Wi-fi — whose approach was it?

Throughout the entirety of Swindon’s wifi fiasco, Mr Bluh has been adamant that no tendering exercise was necessary nor appropriate, because it was not the council’s proposition, it was a proposal put to them by Mr Hunt. In the council chamber Mr Bluh has repeatedly been very clear, Mr Hunt approached the council, not the other way round. As long ago as December 2009 Mr Bluh said

[I]t is only recently we have been approached by Digital City UK who had a technical partnership with aQovia. They came to us because they wanted to set up services to sell in Swindon and we invested in them, so we have not disadvantaged any other businesses in Swindon.

Now Mr Hunt has given a version of events that differs somewhat. If Mr Hunt is to be believed, it was the council leadership that approached him.

What people do not appreciate is that I was talking for a long time about the concept, and the executive of the council approached me. We all looked at the risks and rewards and decided it was worth doing.

Given their track records — and that Mr Hunt believes his wifi proposal “was a good idea and it still is” — it’s impossible to guess whether Mr Hunt has had a lapse of memory, or Mr Bluh was lying. Of course, if the decision to fund this project had been done in a more open way, we wouldn’t be left to guess. But despite all the questions asked, Mr Bluh and colleagues continue to maintain excessive secrecy about the project, and honesty is in short supply.

Market failure

Started a year ago with some fanfare, Wood Street Farmers’ Market has slowly withered away. For the first few months it served as a Christmas Market, with craft stalls to accompany the food stalls. It brought so much trade that many of the shops in Wood Street opened on the Sundays it was there. But after Christmas 2010, with most of the craft stalls gone, interest dropped. In late spring the food stalls started to abandon it too and the shops went back to being closed on Sundays. Now all that are left are a bread stall; two meat stalls — one selling burgers as a take-away as well as raw meat, the other just selling hot pork rolls — a photographer, and a burger stall selling candy floss.

In many ways Wood Street is the ideal place for a market, but with competition from the Sunday Farmers’ Market at the Designer Outlet — which many of the stallholders in Wood Street also attended — and little reason to visit Old Town on a Sunday apart from the market, it was always likely to struggle.

Bluh’s wifi hindsight was others’ foresight

It seems that the current leadership of Swindon Borough Council are going through a rather ‘retro’ phase at the moment, claiming for themselves as original thoughts ideas put forward by others years ago. First there was Mr Perkins who claimed that creating a park on derelict town centre sites await redevelopment was his idea, whereas local residents suggested it in April 2008. Now it seems that Mr Bluh wants to get in on the act too.

Now, whilst it’s always refreshing — and all too rare — when a politician admits they got things wrong, Mr Bluh has a particularly unrefreshing way of admitting his errors. In fact he does so in a way that suggests he doesn’t accept he’s failed in any way at all. As long ago as December 2009 local residents — some that were members of his own political party — were pointing out how risky his decision to invest almost £½M of our money in a wi-fi start-up company was. A company lead by someone with no track record in the industry; a company where directors seemed not to know they were directors, and a company where the directors that did realise they were directors didn’t understand what their responsibilities are. So for Mr Bluh to now say,

We did all the due diligence but perhaps in hindsight we should have looked at the risk factors a bit harder.

is little better than an admission of total economic blindness. For Mr Bluh to only recognise with hindsight what others with just a little foresight have been telling him for almost two years is, though welcome, inadequate. And at the risk of stating the obvious, if they didn’t look at the risk factors hard enough, then they clearly didn’t do all the due diligence, only some of it.

We were prepared to take the risk and we felt it was a managed risk at the time and, with hindsight, perhaps it wasn’t the best risk.

Even if it were managed at the time — which is disputable — the council then chose to relax that management, disregarding concerns that were raised. Again, there’s no hindsight required here, all the evidence was available at the time, and pointed out repeatedly to Mr Bluh, but he wilfully chose to ignore it. Until he shows some signs of admitting that this isn’t just a matter of hindsight, but something he should have and easily could have avoided, there’s no reason to believe Mr Bluh won’t be squandering our money yet again.

Garry Perkins burns his Priory Vale visa

Mr Perkins is not renowned for engaging many brain cells before opening his mouth, but in his latest outburst he might just, unwittingly, have stumbled through a nuance of planning law.

Swindon Borough Council has been busily splashing the cash from a renegotiation of Priory Vale’s ‘Haydon 3’ planing obligation — commonly known as a S106 agreement — around the borough, with little if any regard for its impact on the new housing development. According to Mr Perkins, there’s nothing wrong with that.

We’ve got to look at the town as a whole rather than individual areas. It’s for the use for the good of the people of Swindon, of which Haydon 3 area residents are part. You don’t need passports to go to Old Town because you’re from north Swindon. It’s the same town.

At first, it would seem that Mr Perkins — although he’s the council cabinet member with responsibility for regeneration — is unfamiliar with the relevant planning laws. Section 122 of the Community Infrastructure Levy Regulations 2010 states:

1. This regulation applies where a relevant determination is made which results in planning permission being granted for development.
2. A planning obligation may only constitute a reason for granting planning permission for the development if the obligation is—
   1. necessary to make the development acceptable in planning terms;
   2. directly related to the development; and
   3. fairly and reasonably related in scale and kind to the development.

In other words, it’s illegal to use S106 money for something that isn’t directly related to the housing development the money came from. If a council were to use the money in that way, the developer that was forced to stump up the money could reasonably demand their money back, leaving the council taxpayers to foot the bill for whatever the money had been squandered on.

The critical point here is that the money now being spent is not from a Section 106 agreement, it is from a renegotiation of that agreement. So although it would be illegal for the council to insist before planning permission was granted that the Haydon 3 developers pay for something irrelevant to Priory Vale — such as facilities in Dorcan — it’s within the law to do so now after planning permission was granted.

The occupants of Abbey Meads may quite reasonably feel aggrieved that the money to be spent in support of where they live has diminished from £18.6M to just £700,000 but unfortunately for them — and anyone else living in a new housing development — the council appear to have found a way around the legislation that’s intended to protect them.

Digital City (UK) Ltd, R.I.P.

Hard on the news that John Richard ‘Rikki’ Hunt has filed for bankruptcy, comes the news that Digital City (UK) Ltd is now in the process of being struck off the register of companies. So that’s £½M of Swindon taxpayers’ money gone, despite the assurances of the Messrs Bluh and Perkins that the equipment installed by the company and the use that could be made of that was worth more than the loan to them from Swindon Borough Council, that it was a no-lose proposition. How a patchy wireless internet service for Highworth, and nowhere other than Highworth, could be worth £½M is hard to see, but that is all we got for the money our councillors squandered on our behalf on this project.

Lest we forget, here are a few things said about this failed adventure with our money by Mr Bluh in December 2009.

This is a commercial decision, in the new world in which we all live more and more commercial decisions will be made. An opportunity was put to us, and we were asked if we wanted to invest…. This is a commercial venture that will bring commercial return. The only affects on capital budgets will be if this loan does not get repaid in full…. To get a reasonable level of council tax and to go forward we have been required to find savings and efficiencies. We are doing everything that is humanly possible to keep this ship afloat.

The ship was holed below the waterline before Mr Bluh squandered our money on it, and is now sinking rapidly to the bottom of the ocean. There were many that brought this to the attention of our arrogant council leadership at the time. They wilfully chose not to listen. Now it will be us, the council taxpayers, rather than those councillors personally, that will be paying for their financial stupidity.