News broke at the tail end of last night that Bexley Council had been
granted its Capitalisation Order of up to £15 million which will avert bankruptcy.
Earlier this week the Finance Director suggested he may be able to make do with as little as £4 million. That’s only
twice the amount that disappeared from Barnet Council when they failed to
spot a fraud while he worked there. Chickenfeed then!
The facility is presumably similar to that granted by Bexley Council to its own property developer BexleyCo; you know the one, it’s the outfit that has seen a succession of rejected planning applications, wrecked one park with another waiting in the wings and not yet raised a penny for taxpayers.
BexleyCo has been given a £120 million loan facility by Bexley Council and lost £3·68 million last year alone. Remarkably close to the minimum sum that Bexley Council now desperately needs for this year.
(Later: The Capitalisation Order allows £3·87 million this year and £5·125 million next year.)
BexleyCo no longer looks like a good idea, in fact a Cabinet Member said as much.
History showed that governments national and local have decided they know better how to run a commercial operation than private enterprise. From the disasters of postwar nationalisation through to Tony Benn’s determination to subsidise Leyland Motors and beyond we can see the consequences of that misplaced optimism.
Government intervention in markets leads to inefficiencies, a bloated bureaucracy and unjustly highly paid leadership and often notwithstanding any original philanthropic intent ends up with businesses being run by the staff for its staff and customers just an unfortunate irritant.
Unlike private enterprise, government owned businesses seldom have either the expertise necessary to achieve genuine commercial success or the crucial financial discipline that markets inevitably impose on privately funded businesses. No matter what the initial good intentions government run businesses often cease to be competitive and then instead of addressing their cost base they emulate Oliver Twist by going cap in hand to their owners, the tax payers of this country, demanding more money.
Unless you are a banker that is not an option generally open to private enterprise and thus places any Government owned business in a potentially dominant market position and that is certainly not good for the taxpayer. So I have those concerns about both the principle of any government national or local running any business.
That Councillor was Philip Read speaking at a Cabinet meeting held in 2017. He claimed to have spoken against the idea before. So he’s the one guy with foresight?
Maybe, but the prospect of losing his five figure Cabinet Member’s allowance triumphed over integrity. He voted in favour of establishing BexleyCo.