April 25 2013
Taken for granted
Over the past few months Pembrokeshire's Best has carried a series of articles on the European grants awarded to Mr Cathal McCosker and his associated companies under the Haven Towns Regeneration (HTR) scheme covering Pembroke and Pembroke Dock.
Naturally, Old Grumpy takes a keen interest in these matters, but I was rather stymied by the fact that all these grants were awarded during secret sessions of PCC's Cabinet and though, as an elected member, I had copies of the Cabinet reports, the confidentiality requirements of the Code of Conduct prevented me from joining in.
However, I understand that these reports have now been released under the Freedom of Information Act, so they are now in the public domain.
Below is a table showing details of the grants awarded so far.
The table reveals interesting relationships and patterns which appear to require an explanation.
So, I made an appointment with the council's European Office for 2.00 pm on Monday to view the grant application files and the tenders on which the grants were based.
At 8.30 on Monday morning, I received a call from the European Office informing me that I would be unable to see the tenders and bills of quantities because the council's monitoring officer had ruled that they contained "personal information".
The result was that when I arrived at the office on Monday afternoon all the interesting bits had been removed from the files, so my various hypotheses as to how these patterns and relationships fit together remain untested.
So much for the "accountability and transparency" referred to on page 1 of the Pembroke and Pembroke Dock commercial property grant scheme procedure manual.
That being the case, we will have to make do with the facts as laid out in the table below.
Grants are listed in descending order of value.
Address Applicant Architect Builder Total cost Non-eligible cost Eligible cost Grant approved 50 Dimond St (PD) 50 Dimond St Ltd* Kinver Kreations G & G £382,000 £183,454 £198,546 £122,920 29 Dimond St (PD) C McCosker Kinver Kreations G & G** £188,371 £52,111 £136,260 £81,073 10 Meyrick St (PD) C McCosker Kinver Kreations G & G £114,273 Nil £114,273 £71,333 27 Dimond St (PD) 27 Dimond St Ltd* Kinver Kreations G & G £224,821 £111,446 £113,735 £70,413 25 Dimond St (PD) 25 Dimond St Ltd* Kinver Kreations G & G £227,418 £115,461 £111,957 £64,842 18 Main St (P) E Burnett Kinver Kreations G & G** £128,262 £47,091 £81,171 £44,829 40 Dimond St (PD) L James F Fisher Assoc Ivor James £78,645 £15,610 £63,035 £39,025 31 Dimond St (PD) P D Regen Co Pembroke Design D Jones £66,485 £5,073 £61,412 £35,590 24 Main St (P) J Roberts and D Dickinson W Beynon ATR Construction £54,008 £4,417 £9,591 £34,714 83-85 Main St (P) King Vet Group Acanthus Holden W G Evans £54,008 £7,247 £46,761 £32,733 50 Main St (P) H Sulutuy Pembroke Design Woodenbale £42,650 £3,934 £38,716 £23,350 Club Martello(PD) P Nunnery Pembroke Design L Scourfield £31,552 Nil £31,552 £21,781 6 Westgate Hill (P) Bevan an Buckland Pembroke Design L Scourfield £43,518 £11,672 £31,846 £19,716 3 Castle Terrace (P) Acanthus Holden W G Evans £29,544 £3,048 £26,496 £16,404 2 Castle Terrace (P) W Bevan Acanthus Holden W G Evans £28,448 £3,286 £25,162 £15,578 16 Meyrick St (PD) Pembroke Design Pembroke Design Tomlor Ltd £16,074 £14,963 £1,110 £9,264 Old Kings Arms (P) S Wheeler Pembroke Design Tomlor Ltd £12,471 Nil £12,471 £8,729
* McCosker controlled companies.
** G & G not the lowest tender.
So what can we tell from these figures?
First, anyone seeking one of these grants would be well advised to contact Kinver Kreations.
Second, if you are a builder (other than G & G) and Kinver Kreations ask you for a tender, don't bother, because even if you put in the lowest bid you are not certain to be awarded the contract.
As the report on 29 Dimond St Pembroke Dock records: "The grant has been based on the lowest valid tender though, should the grant be approved, the applicant has decided to appoint an alternative contractor.[G & G]"
And with respect to 18 Main St Pembroke the report says: "Kinver Kreations Ltd has recommended that the second lowest tender from G & G builders (applicants' preferred choice) be accepted in the sum of £96,890."
One thing I did learn from my visit to the European office is how the EU's de minimis rule operates.
This rule is part of the EU's competition policy and is designed to ensure that no individual applicant is awarded grants exceeding £200,000 in any three year period.
That explains 50 Dimond St Ltd, 27 Dimond St Ltd, and 25 Dimond St Ltd which are all companies controlled by Mr McCosker.
But, as companies have a separate legal personality, they don't count towards the cumulative £200,000 de minimis limit.
This is all perfectly legal, though whether it is within the spirit of the law is another matter.
Actually, according to Companies House website, there is no such company as 25 Dimond St Ltd, though I did find one called Old Butchers Shop Dimond Street Ltd controlled by Mr McCosker.
This, I assume, is because No. 25 is the former Gordon's butchers.
One thing that stands out in the table above is the great discrepancy between what I will call the "McCosker" grants and the rest.
While the 12 other grants add up to £323,191 (average £24,860) the McCosker awards come to £410,581 (average £82,116) or more than three times as much per property.
But by far the most interesting feature of the table is the gulf between the McCosker grants and the others in respect of the amounts of non-eligible costs included in the contractor's tenders.
Non-eligible works in the McCosker tenders come to £462,462 (average £92,492) while for the remainder it is £151,033 (average £11,980).
And this seems to be a Kinver Kreations' phenomena because easily the largest figure for the non-McCosker properties is in respect of 18 Main St Pembroke (£47,091).
Excluding that from the non-McCosker contracts leaves an average of just £8,788 for the other 11.
It is difficult to see why these non-eligible items are in the mix at all.
All that the council is interested in is the cost of those works that are eligible for grant aid and having what is an entirely private contract between the applicant and the builder intermingled with the grant work only causes confusion and makes the evaluation of the tenders more complicated than it need be.
The procedure manual issued to applicants seems to cover this point with the instruction: "The specification should be agreed prior to the applicant obtaining quotations in order to avoid the need for revision."
It seems this procedure was followed for the very first grant Mr McCosker received (10 Meyrick Street, 9 January 2012) and it is not clear why it was abandoned thereafter.
Now, for those not familiar with the subject, I should say something about bills of quantities (BoQs).
Suppose you wish to build a new house and you invite two highly and equally reputable builders to tender based on a (BoQ).
Both tender exactly £100,000, so you might think it is simply a matter of tossing a coin.
Well, it would be if payment was only to occur when the house is finished..
But say there are to be two stage payments - the first when the building is roofed in, and the second on completion.
Now you would be well advised to be on the lookout for what is known to quantity surveyors as front-end loading.
Suppose A has front-loaded the rates in the BoQ with the result that he will be due £60,000 once the slates are on, while, on the same basis, builder B will be due £40,000.
If you engage A you will in effect be giving him an interest free loan of £20,000 for the second half of the contract.
What's more, if A goes bust halfway through the job, you will have only £40,000 left in the kitty, so, even if B is willing to complete the contract based on his original rates, you will be £20,000 out of pocket.
The danger with tenders that mix eligible works and non-eligible works is that the rates in the BoQ might favour the grant-aided items.
So, in the example above, if the the first stage of the house attracted a 50% grant it would be better to accept A's tender because then you would get a grant of £30,000 compared to £20,000 with B.
Indeed, the ideal situation would be a tender which charged £100,000 for the first stage (£50,000 grant) and nothing for the second, though you might expect the grant awarding body to be alive to that possibility.
Not having been allowed to see the tenders and BoQs, it is not possible to know if all the tenders for these HTR grants have been apportioned between eligible and non-eligible works before deciding which was the lowest though, as all the reports refer to the lowest tender in terms of the gross value of the contract (grant aided + private), it is fair to assumed that they weren't.
And, of course, as explained above, the lowest gross tender is not necessarily the one that represents best value for the taxpayer.
It will come as no surprise to regular readers of this column to learn that all these grants were dutifully nodded through without question by the Cabinet.
According to an email I received from the European Office the reasons why the tender documents were considered to be "personal information" was that they may reveal "Details of ownership; contributions to be paid by the owner; costs/specifications of work supplied by the contractor engaged by the owner."
Details of ownership are contained in the reports released under Freedom of Information Act and, in any case, anyone prepared to fork out three quid can obtain the information from the Land Registry.
Contributions paid by the owner are also contained in the released reports.
It is true that private contractual arrangements are nobody's business except the contracting parties, but when public money is involved - and it is close on £1 million in this case- it is a different matter.
I can understand the council's caution following the recent unauthorised release of the psychiatric reports of abused children, but this is taking things a bit too far.
Recycling has come to resemble a religious devotion with one contributor on the Western Telegraph's website opining on the subject of fortnightly black bag collections: "Because I recycle I only have very little waste to put out for collection. So this scheme will not make any difference to me!"
I don't suppose such people have a two nappy-age children in the house.
And if reports in the papers are to be believed: that much of our carefully recycled plastic is stuffed into containers and shipped to China and India for landfill, it isn't very environmentally-friendly either.
However, I forecast that, in 20 or 30 years time, all the world's major religions will have united under the great god Gaia.
The ecomaniacal movement, shall we say.
The Roman Catholic Church, having surrendered its objections to birth control and abortion as part of this coalition agreement, has insisted on retaining the confessional.
A penitent is speaking in hushed tones to the priest.
"Father, I put a plastic milk container in the black bag."
"My son, if you are truly repentant, the Lord will forgive."
"But, father, that's not all - an empty bean tin and three wine bottles as well."
"My son, if you are truly repentant, the Lord will forgive."
"And I put last week's Western Telegraph in with the rubbish."
"An understandable reaction, I'm often tempted to do the same myself. Go forth, my son, and bin no more"
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