17 December 2017
Just for a change, let’s have a look at one of the commercial investments of Aylesbury Vale District Council (AVDC). Like other Councils in Bucks it is dominated by Conservatives.
On 6 December, there was an extraordinary debate at the Council meeting about a company ADVC set up called Aylesbury Vale Broadband Ltd (AVB). Allegations were made about conflicts of interest, misuse of public funds, and AVDC breaking the law.
This is a long and detailed blog but if anyone is interested to see how financially incompetent the Conservatives are – and how they cover it up – read on.
The facts first.
In June 2015, AVDC set up AVB to provide superfast broadband, mainly to villages in Bucks. It is 95 % owned by AVDC and 5% by a company called Ironic Thought.
Ironic Thought, according to its last accounts up to November 2016, had a turnover of £42,000, made a loss of £22 and had assets of £1190. It is owned by Andrew Mills who is an Australian Technology Consultant. He is a Director of AVB. He was initially paid a consultancy fee by AVDC but was then appointed as the Managing Director of AVB in July 2016.
AVB was funded by a loan of £1.5 million, borrowed at commercial rates, under the new Home Bonus Government scheme. The project was expected to generate on-going revenue for the Council to be declared in the annual accounts presented annually to AVDC’s Scrutiny Committee.
The Cabinet member responsible for setting up AVB is Councillor Janet Blake, the Cabinet Member for Commercialisation and Business Transformation. She has been a Director of AVB since it was set up. In 2015, AVB set up a pilot for delivering superfast broadband in the villages of North Marston and Granborough area. I understand these villages are in Councillor Janet Blake’s constituency of Stewkley.
In September 2016, a Cabinet paper by Councillor Janet Blake stated the pilot had been a success, recommended expansion of AVB across the Vale, and asked for approval of the draft business plan for AVB. The business plan is confidential and not available to the public. The paper said there were no further resource implications.
Companies House provides the latest (shortened) accounts for AVB. As at June 2016, AVB had total net liabilities of £56,000.
Apart from Councillor Janet Blake and Andrew Mills, its Directors at that time were Councillor Neil Blake, the Leader of the Council, and a Council officer. Councillors Janet Blake and Neil Blake are married.
Councillor Neil Blake said at the Council meeting on 6 December that AVB is now up for sale.
Concerns before the debate
Opposition Councillors, both Lib Dem and Labour, have voiced their concerns about the company in the Bucks Herald, including AVDC’s refusal to disclose financial information to all Councillors.
The Chairman of Hogshaw Parish Council said the village was offered the chance to become part of the pilot in 2015. He said
“We listened carefully to Mr Mills’ proposals, took independent expert advice, and eventually reached a formal community decision to withdraw from the scheme.
We felt that what was promised was undeliverable, technically and commercially.
Why didn’t AVDC call for tenders from the private commercial sector to deliver broadband services to remoter villages like ours, allowing up-to-date technology and competition to be freely marketed?”
Councillor Christensen, a Lib Dem Councillor, put down a motion at AVDC’s Council on 6 December. It asked the Council to agree to undertake a detailed external audit of AVB starting no later than one calendar month from the sale of AVB or by 31 January 2018 whichever is the sooner. The audit would be conducted by a qualified person appointed by the Chief Executive and with the agreement of all political parties. The audit would report no later than 3 months after it started and its report would be published in full and in public.
The audit would include reviews of:
- the management of the business including the performance of the management team, delivery of services to target villages, performance against business plans, and the use of capital;
- the effectiveness of the scrutiny process; and
- the oversight provided by Cabinet members and Officers while acting as Board members of AVB.
Five minutes later and without any advance notice, Councillor Neil Blake read out an amendment to the motion which proposed to give responsibility for the proposed audit to AVDC’s own Audit Committee, including deciding what the audit should cover. The amendment proposed that the audit would be carried out by AVDC’s own internal audit team. The amendment removed the timescales and the commitment to publish the report.
After a confusing and fractious debate, Conservative Councillors voted for Councillor Neil Blake’s amendment and it was agreed.
It looks as though AVB has been a disaster. How big a disaster no-one is saying as it is apparently commercially sensitive. Not only has AVB failed but so too has the scrutiny and audit process in AVDC in preventing a waste of public money.
Any audit into the disaster has been kicked into the long grass by Conservative Councillors – and any audit carried out will be done in secret.
Questions to be answered.
1. What is the answer to the question posed by the Chairman of Hogshaw Parish Council? Why did AVDC set up a company to install broadband rather than tendering for the service?
2. Has AVDC breached EU regulations in providing loans and support to AVB which is in commercial competition to other private sector companies?
3. Why did AVDC set up a company with Ironic Thought and appoint Andrew Mills as Managing Director?
4. Why did AVB carry out its pilot in villages in Councillor Janet Blake’s constituency? Isn’t this a misuse of public funds in using her position as the responsible cabinet member to use taxpayers’ money to provide services to her constituents and not others?
5. How could Councillor Blake recommend expansion of AVB on the basis of a successful pilot when AVB was operating at a loss? Where is the evidence that the pilot was successful? Where is the business plan for its expansion?
6. Why has AVDC refused to disclose all information to all its Councillors? Isn’t this breaking the law? Lib Dem Councillors said they have taken legal advice on this point and they and Labour’s Councillor Stuchbury have pressed the Council on the legality of it withholding information.
All Councillors are responsible if things go financially wrong. How can they be held responsible if they aren’t provided with information on which to take an informed view?
7. How much taxpayers’ money has AVB lost? Estimates vary between an awful lot of money and a shocking amount. Where are the accounts?
8. When and why did AVDC decide to sell AVB? Where are the papers explaining the sale?
9. How does AVDC propose to sell AVB? I understand it has decided to sell to a preferred bidder without proper due process. Is this right?
10. How many residents have paid a deposit to AVB for broadband connection and have been left in the lurch? How much have residents lost? Will they be compensated and how?
11. The Audit Committee had concerns about the governance and operation of AVB in March 2017. Why weren’t the problems identified earlier and adequately addressed?
12. It is unclear whether any of AVDC’s scrutiny committees identified the problems with AVB and ensured they were adequately addressed. How and when did the scrutiny committees scrutinise AVB?
13. Did Councillor Janet Blake declare a conflict of interest in the motion at the Council on 6 December as she is a Director of AVB and then leave the Chamber? If not, did she vote on the motion and is this in breach of AVDC’s constitution?
14. Did Councillor Neil Blake declare a conflict of interest in the motion at the Council on 6 December as he was a Director of AVB and his wife still is? Did he also declare a conflict of interest being responsible as Leader for AVDC’s scrutiny and audit functions which it was proposed would be the subject of the audit.
Not only did he not leave the Chamber but he also put down an amendment to the motion and played a leading role in the debate in which he had these conflicts of interest. I also believe he voted for his amendment. Is this in breach of AVDC’s constitution?
15. Have there been other occasions when Councillors Janet Blake and Neil Blake (and other Councillors) have not recognised their conflicts of interest and have taken decisions or influenced decisions when they should have reclused themselves?