Boston Borough Council’s million pound loan – day 4

Did dock sale glitch

cause loan emergency?

We hope that by now you have a general idea of just how incompetent Boston Borough Council has been in the 25 years since it took out the mystery £1 million pound loan.

It does not appear to have been authorised, nor approved, and no record for its raison d'être exists.

Six years ago, a report by the then chief executive Richard Harbord listed some of the questions that he would like answering.

They included:

· Why did Boston go for a commercial lender when most councils were borrowing from the Public Works Loan Board?

· Why did they borrow for 60 years when interest rates were so high?

· Was there no alternative of borrowing short term and seeing what happened to interest rates?

He concluded:  “I can only surmise that there was some crisis which required immediate borrowing but on the face of it perhaps unfairly with the benefit of hindsight it does look like a very major case of very poor judgement. The residents of Boston will have paid over £6m in interest by the time this loan is repaid.”

So, what crises were doing the rounds at the time?

One possibly significant player was the Poll Tax, which replaced domestic rates on 1^st April 1990 and which led to a large decline in the proportion of local authority income raised through locally determined taxes.

There was also a recession which was officially the longest in Britain since the Great Depression some 60 years earlier. Unemployment rose from 1,600,000 to nearly 3,000,000 between April 1990 and February 1993.

Locally, 1990 was the year that Boston Borough Council sold the municipally owned docks to John Sutcliffe & Son, a family stevedoring company, which bought them for £4 million, turned the business around and sold it in 1999 for £8 million.

Readers with long memories remember a glitch in the sale, which meant Boston Borough Council received less than expected. If anyone else has such a recollection, please let us know.

Meanwhile, the council had authorised a spend of £2.9 million of its capital programme for 1992/93 – including £1,956,000 on various housing projects … among them £630,000 to repair its prefabricated reinforced concrete housing stock.

This spend of just under £3 million was apparently more that the anticipated income.

Whatever went wrong – and even though there may have been “different governance models, decision-making structures and delegations of authority” at the time – there should be an in-depth inquiry now, to get to the bottom of this humungous cock-up.

Boston’s council taxpayers deserve an explanation.

People with answers are still alive, and should be asked.

And if there is no documentation available concerning this loan, why was it thrown away?

Amusingly, after years of claiming that there was next to no information available, some members of the Insignificant Seven – aka the Worst Street Cabinet  – are touting the line that by an amazing coincidence all the documentation that has now emerged turned up in a filing cabinet that was that was being cleared out last November.

If so, then there are fairies at the bottom of our garden!

  

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