Category Archives: privatisation

Eric Pickles: No privatisation of the fire service

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Eric Pickles: Amazing no to fire privatisation

Eric Pickles: Amazing no to fire privatisation

Eric Pickles, the communities secretary,thisweek made an extraordinary statement for a Tory Cabinet Minister. He categorically ruled out the privatisation of the fire service in England. This has not been reported in any national newspaper or TV network.

Even more extraordinarily he made this statement in a very public place in front of  some 80 journalists from the Westminster elite body of lobby hacks as guest speaker  at a Parliamentary Press Gallery lunch. And only one, the questioner, Rob Merrick, a freelance parliamentary correspondent who writes for the Northern Echo and other regionals, bothered to report it.

Evidently such a statement is not regarded as news by journalists.

Yet it is significant. Mr Merrick had spotted that the government was using some obscure measure to  amend an act passed by the Blair government in 2004 to allow the core of the fire service – the  full-time firefighters – to be privatised.

The reason they were doing it was that Cleveland fire authority wanted to become a mutual – a half way house to privatisation – but had found it was illegal. The Tories ever keen to end the state look like ready to oblige.

First Mr Pickles denied that the government was going to privatise the fire service only encourage mutuals. But Mr Merrick came back and said the same change in the law could permit privatisation as well as mutuals. The in an extraordinary statement Mr Pickles said: ” If this is the case we won’t go ahead with the change. I repeat there will no privatisation of the fire service.” So he seemed to suggest that even Cleveland’s mutual plan could be dead in the water.

To me this was extraordinary . First one of the big privatisers in government had actually ruled out full-scale privatisation – not a normal statement from the Tory right.

Second the press -even on the old man bites dog scenario – thought this didn’t  merit any attention.

I know that no privatisation does not equate to no cuts – see what is happening in London and elsewhere now- and it does not stop some of the services being run by private companies. But it seemed that a very senior Tory had decided that they could not turn the whole system over to the private sector. Perhaps the Assetco scandal in London has made its mark. Perhaps they have decided that it is not worth a full-scale dispute between them and the Fire Brigades Union, led by Matt Wrack. But whatever a Rubicon was crossed and nobody reported it. But now he can held to account.

Why Eric Pickles will allow councils to fiddle your cash – MPs’ damning verdict

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Eric Pickles:will he make it easier for councils to fiddle your cash?

Eric Pickles:will he make it easier for councils to fiddle your cash?

Do you believe your council spends your money wisely? Are you sure none of your council tax is wasted through incompetence or fraud? Do you trust all your local politicians to be honest? Probably the answer to all three is no!

Communities Secretary, Eric Pickles, has a flagship policy of scrapping the body that  tries to protect you from all of this – the Audit Commission. His passionate belief is that this body of highly skilled auditors and officials  is a load of bureaucratic nonsense – and has produced figures to claim that the public will save  over £1bn in a decade by scrapping it.

Now an all party committee of MPs led by the indefatigable Margaret Hodge, scourge of  tax avoiding Amazon and Starbucks and chair of the Commons Public Accounts Committee, has come to some damning conclusions on what the government is about to do. There is a full report by me on the Exaro News website (http://www.exaronews.com).

Basically Pickles wants to leave it to local councils, health trusts and the new NHS commissioning bodies to police themselves by appointing their own auditors,taking away a whistleblower hot line to the Audit Commission, and allowing big accountancy firms  free rein to up their charges by picking off individual councils. It also allows  even more cosy relationships to be built between the auditor and the local council and leaves whistleblowers nowhere to go.

Given the present background of mass privatisation of services this plain daft. The most extreme example is Tory controlled Barnet’s plan to hand almost everything over to the private sector – see the Broken Barnet website for detailed coverage (http://wwwbrokenbarnet.blogspot.co.uk). Are locally appointed auditors going to be up to doing a tough job – already Grant Thornton missed the MetPro private securityscandal in the borough. How will they keep up with all the services being privatised?

Some amazing facts are comments in  the report. The government claim it will save £137m a year. The MPs say the figure is more likely to be £2.4m. They warn of a fragmented and more complex audit regime.

And on the appointment of local auditors they say: “The proposals for self-appointment of auditors risk compromising the independence of audit. The Government must intervene to ensure that existing governance structures within local bodies are not duplicated; existing contracts are managed proficiently; economies of scale in audit fees are not lost; quality of audit does not diminish; value for money can be measured comprehensively and consistently; fees, especially for smaller bodies, do not increase as a result of increased tendering costs and potential limitations to the market in audit and; processes for auditor removal, whistleblowing and public interest reporting are rigorous enough so that the regime is sufficiently robust in difficult circumstances.”

The link to the full report is: http://www.publications.parliament.uk/pa/cm201213/cmselect/cmdraftlocaudit/696/696vw01.htm.

Pretty damning stuff. And they call on the auditor general, Amyas Morse, to  offer to take calls from whistleblowers as well as local auditors who could have a vested interest in not upsetting the council.

Otherwise they warn that whistleblowers will contact the media, and in Barnet’s case,it will be  the local bloggers. Too right if Pickles gets his way on this dodgy piece of legislation, your money is at stake.

Fire Privatisation was flawed says AssetCo Chairman in £50m claim

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london fire engine                                                                      London Fire Engine: Pic courtesy i.newsrt.co.uk

The scandal over the privatisation of the vehicles owned by London and Lincolnshire  fire brigade is a never ending saga. First the company pulled out of the UK to concentrate on the Middle East  and then sold its London assets to a baronet for £2 only to have them taken over by Babcock in an emergency deal by the London Fire Brigade. ( see previous stories on this blog).

Now with a new interim report from the firm the real cost to the people who invested in a” couldn’t fail” take over of public assets is revealed in the balance sheet.

And astoundingly the chairman of the rump company, Dr Tudor Davies has now admitted publicly that the  PFI deals with the London and Lincolnshire fire brigades to take over and replace all the brigades’ engines were  based on a ” flawed business and financial model.. without any reasonable prospect of shareholder value.”

For the public record this is his signed statement in the latest interim accounts:

“The new Board has been considering claims to recover value for shareholders given the very significant decline in value following the four separate fundraisings amounting to £53m between 2009 and 2011 when, from the published accounts it appeared the Group’s financial position was satisfactory.

“As explained in the 2011 Annual Report, the massive restatements to the 2009 and 2010 financial accounts and the requirement for a Scheme of Arrangement subsequently showed a very different situation, and the differences arose from the UK businesses.  The funds raised between 2009 and 2011 had primarily been utilised in support of an apparently flawed business and financial model associated with the UK vehicle leasing and maintenance business, without any reasonable prospect of shareholder value.

“Following expert advice, the new Board is at the early stages of pursuing claims against those associated with the past for in excess of £50 million.”

His proposed launch of a £50m claim against dismissed chief executive  John Shannon and chief financial officer, Frank Flynn, among others who quit, may have little chance of success. As this blog has already reported Shannon is selling his mansion in Northern Ireland and was on the way to be declared bankrupt. Flynn’s fate is not known.

But the figures speak for themselves. The accounts reveal that by offloading the company’s UK assets to the baronet, Sir Aubrey Brocklebank, some £84m  of losses was averted.  Last August net liabilities were £51m for the two fire brigades and that  was after creditors had to settle for a £4.9m payment –  losing around 78 per cent of their investments.

Shareholders lost virtually all their money – when the shares were reduced to junk statues – some 300 times below their best value.

Shares are still trading in the remainder of the company which now is exclusively providing fire services in Abu Dhabi in the United Arab Emirates where it has made a £3m profit. One wonders what  Arab Investors would make of the shennaghins in the UK if they knew the full picture.

The lesson of this privatisation exercise seems very clear. It was bad for public services in London and Lincolnshire, bad for the banks and other big investors and even bad for the ” get  rich quick ” small shareholders who lost most of  their cash. Anybody who thought they were going to make a quick buck  out of the emergency services should think twice.

Exclusive: London Fire Brigade sacks the 2cv racing baronet

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Sir Aubrey Brocklebank: Sacked by the London Fire Brigade; Picture courtesy Daily Telegraph

The  incredible scandal surrounding the botched privatisation of London Fire Brigade takes yet another mad twist.

Sir Aubrey Brocklebank, the baronet who bought  the brigade’s entire fire engine fleet for £2 just three months ago, has had his contract terminated by the London Fire Brigade today. His company has gone into administration only  four months afterv it was set up, it was among a string of companies that appear to have been set up by the baronet only to fail.

The eccentric baronet who loves to race ageing  2cv’s at  racetracks across the UK and lives in a three bed semi in Wellingborough, Northants, thought he could make a fast buck by selling on the company. There is a previous blog which will tell you everything you need to know about him on this site.

You the  council taxpayers have been  paying this man £1.5m a month to look after London’s fleet. He got this  at a knock down price because  the Greater London Authority foolishly sold off  London’s fire engines and a 20 year lease on its own maintenance headquarters in Ruislip to a private firm.

The firm was sold on to AssetCo ( which I have written about extensively) whose  own chief executive, John Shannon, dismissed by the firm, after he left it teetering on bankruptcy.  He is now going bust himself. The engines are at present owned by bankers, Lloyds TSB, one of the chief creditors of AssetCo London which had over £30m in debts and haven’t a penny to  replace the ailing fleet of engines from 2014. This has been admitted by Sue Budden, director of finance,of the London Fire and Emergency Planning Authority. She told councillors at a meeting in September: “When they look ahead and look at the big vehicle replacement that is due to start in 2014, I think they can see they are not set up to cover that.” The full story by me is on the Exaro  news website at http://www.exaronews.com.

Now it emerges  surprise, surprise that after a few months that he can’t deliver and the authority has had to use emergency powers to end the contract and has handed it over to Babcock without any tender competition. The interim contract will last next 18 months.

This is their statement:

LONDON FIRE BRIGADE APPOINTS BABCOCK TO MANAGE  999 FLEET

London Fire Brigade has appointed Babcock International Group to manage and maintain its fleet of fire engines and specialist equipment on an interim basis.

Due to a deterioration of the services provided by Premier Fire Serve Limited (previously called AssetCo London Ltd), the London Fire and Emergency Planning Authority, which runs the Brigade, has exercised its right to terminate the contract and appoint a new provider.

 While, undertaking a full, competitive procurement of the services, it has appointed Babcock to maintain the fleet on an interim basis of 18 months until the new provider has been appointed.

 London Fire Commissioner Ron Dobson said: “This move should stabilise the way in which our vehicles and equipment are managed and enable London Fire Brigade to continue to provide the Capital with the world-class fire and rescue service it deserves.”

However London Assembly’s Green Party spokesman Darren Johnson said:

“The sensible long term solution is to bring the contract in house and scrap the PFI arrangement. Many other fire authorities have a straight forward leasing arrangement. I hope that both the Mayor and the Government will see sense and recognise that the experiment with PFI has failed. We shouldn’t be taking financial risks with something so essential as our fire engines. Government funding guarentees for PFI credits could be better spent on developing an in house contract.”

what a mess!

AND THERE IS REPORT FROM DONEGAL REPORTING THIS FALL OUT

WORKERS LEFT SHOCKED AS DONEGAL CALL-CENTRE CLOSES WITH LOSS OF 30 JOBS

BREAKING NEWS: A Donegal call-centre has gone into administration with the loss of 30 jobs.

Workers at the Buncrana-based Assetco Manage Services ROI were told the bad news this afternoon.

The company, is part of a larger company, Assetco London Ltd, which works with London Fire Brigade.

London Fire Brigade failed to renew a major contract for Assetco London Ltd leaving workers out in the cold.

Shell-shocked workers at the company, based at the IDA Business Park in Lisfannon since 2006, were told the news today.

Even worse is the fact that none of the workers will be paid redundancies.

Ironically most of the London-based employees will be taken on by the company who won the new contract, Babcock.

However, the Irish company have not been given part of that new contract and will lose their jobs.

Members of KPMG, who are acting on behalf on London banks, turned up at the Buncrana company’s headquarters today to break the news.

Angry workers say they are outraged at how they have been treated.

A spokesman told Donegal Daily that they are considering their positions and are even thinking of staging sit-in at the plant.

“We have been very loyal to Assetco London and this is how we have been rewarded.

“We would like London Fire Brigade to know this and to know how we are being treated.

“There are 30 families being thrown on the scrapheap just before Christmas it’s just not on,” said a spokesman.

Exclusive:Going bust, the man who fleeced London Fire Brigade

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John Shannon when he was riding high

There may be a God after all or at least an element of rough justice. John Shannon, the former chief executive of AssetCo, the company awarded a massive contract to service and replace London and Lincolnshire’s fire engines  is facing bankruptcy.

He is the man who wined and dined Brian Coleman, the former Tory chair of London fire brigade who is now facing assault charges, and gave Coleman a £350 Harvey Nicks hamper for Christmas.  He also got the notorious strike breaking contract to supply cheap labour to replace firefighters in the capital.

He brought AssetCo to the brink of bankruptcy leaving a trail of unpaid bills – one for the use of a personal executive jet  – and forcing backers of the firm to take a 78 per cut in their debts, including taxpayer-funded Lloyds TSB, now proud and reluctant owners of London’s fire engines. Small shareholders who were daft to bet on privatisation as a one way ticket to riches were ruined when they became worthless.

He lived a life of Riley claiming a salary of around £300,000 a year and paid himself dividends easily equal to that amount while the gravy train lasted. He was actually thrown off the company by his fellow directors after they discovered they were deep in debt and he tried to get a Bahrain bank, Arcapita , to take over the firm. When the dust settled they then discovered – on top of all that – he had taken out loans  of over £500,000 in AssetCo’s name on other failed businesses and overvalued property.

john shannon – now on a creditors’ petition list for debt

But it now looks as though events are catching up with him. A  journalist contact in Belfast has spotted that he is facing a creditors’ petition ( see picture) from people he owes money and they are moving to bankrupt him.

His Northern Ireland seven bedroom mansion set behind electric gates and in seven acres of grounds is up for sale  for £750,000. You can view this here ( http://www.btwcairns.com/property_specific.aspx?ID=18390) .  You can see a sideshow of  the extensive improvements he made  using money from taxpayers in London and Lincolnshire on the estate agents site.

In a way this is a great morality tale of our time. And it is not to the credit of the management of the fire authority who did nothing while AssetCo burnt. Indeed Coleman cosied up to him more than ever. And even top officials took the AssetCo shilling when they retired from LFB, hoping to make money out of the privatisation for themselves.

It will be interesting to see how James Cleverly, the new Tory chairman of  the authority, handles the rest of this contract. He appears to be ignoring the fact that it is in the hands of baronet, Sir Aubrey Brocklebank, living in a three bed semi. So far the dealings done by London Fire Brigade are no pin-up boy for privatisation  anywhere.