Boston Borough Council’s million pound loan – day 3

Bluff and bluster 

becomes begging

as council tries to 

squirm off £1m loan hook

Yesterday we mentioned how easy it was for the documentation for Boston £1 million loan to go astray.

Not only can nothing be traced about who authorised it or why – even the company which will benefit to the tune of more than £6 million in interest in local taxpayers’ money is baffled as well.

During one of several attempts by the council to get State Street to look kindly upon penurious Worst Street the powers that be were told: “State Street have no problems in meeting with the council. But they have no documentation other than the receipt for the loan and they believe that the loan is legal and can be defended in the courts.”

However, once or twice legal advice has been sought – with the council once being told: “The conclusion drawn is that in the first instance, the council should give up trying to solve the mysteries.”

In 2009 the council stopped making payments until State Street “co-operated”   – whatever that was supposed to mean.

But the bluff failed when the company tried to get in touch and  was unable to – because the phone number provided by Worst Street rang out with no-one answering … presumably in an deserted office somewhere.

On another occasion, the council’s legal department was unable to issue a new certificate concerning the loan because their certificate book had been “misplaced.”

So they just amended the original one.

And on yet another occasion, a note on a memo asked: “please look in strong room and try to find the original of this document and/or the full loan agreement (if the council bothered to make one!)”

More recently, years of glittering incompetence have given way to pathetic pleading.

In November 2013 a letter to State Street said that whilst the council was not at risk of default, the loan terms were “causing significant financial pressure on the essential day to day services we provide to our residents.”

An appeal was made to the lenders’ “goodwill” in supporting “a very small local council with significant social challenges” – adding imploringly … “As a small organisation, we do not have significant knowledge of investment matters...”

Bulls eye on that one!

How they must have laughed in the State Street board room.

Tomorrow – our fourth and final instalment underlines some of the questions asked, and speculates on what the reason might have been that prompted such an urgent need for money.

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