April 1 2004


Above the law

 

The editorial in this week's Western Telegraph is yet another chapter in the paper's long-running campaign in favour of the Bluestone Project.
I should state at the outset my almost complete indifference as to whether or not this project goes ahead.
My only practical concern is that the scheme appears to require a £13 million public subsidy to get it off the ground.
I would have thought that, if it is a sure-fire winner, as the promotors, and the Western Telegraph keep telling us, it wouldn't need dollops of taxpayer-funded rocket fuel to make it fly.
However, what does interest me, greatly, is the insight the case gives into the workings of our democratic system and, more particularly, the Western Telegraph's apparent ignorance of the principles involved.
Firstly, as I have pointed out ad nauseam, we live in a democracy under the Rule of Law.
The Telegraph's contention that "The definition of democracy is that the will of the majority prevails." is, therefore, only partially true because the majority can only do that which is lawful.
The inspiration for the Telegraph's comment is the possibility that the legality of the National Park's decision to grant permission for Bluestone may be challenged by the Council for National Parks (CNP).
The Telegraph asks: "What right do that group have to reverse a Pembrokeshire decision, made by Pembrokeshire people about a Pembrokeshire plan?
Well, to begin with, as the name suggests, the responsibilities of National Parks go far wider than the communities in which they are based.
They are assets of the whole nation.
Furthermore, National Parks came into being by virtue of an Act of Parliament which clearly sets out the purposes for which they were established.
It follows, therefore, that anyone who believes that a National Park authority has failed to keep within the statutory limits has a right to seek judicial review.
In any case, the CNP does not have the power to "reverse" the decision, that can only occur if the High Court declares it unlawfull.
By seeking to deny CNP, or anyone else, the right to challenge the committee's decision in the courts, the Telegraph is, in effect, saying that elected members are above the law.
I know from my own experience that some of them think that is the case, but it is a sad day for democracy when such a patently flawed doctrine is expounded by the county's leading newspaper.


Funny numbers

 

By now you should all have received your newsletter from Pembrokeshire County Council with the headline "Value for your money".
My statistical consultant has drawn my attention to the bar chart on Page 4 which purports to show a comparison between the level of Council Tax in Pembrokeshire and other authorities in Wales.
Taking Powys as an example, my statistician warns: "Beware the graph that doesn't start at zero".
She tells me that distorting the scales of graphs and bar charts in this way is one of the most common forms of statistical chicanery.
I can see her point because, to the casual observer, Council Tax in Powys is four-times that in Pembrokeshire.
However, if you calculate the percentage difference between the two, you will find that Powys is actually 29% greater.
That is a significant amount but not as significant as the twelve-fold difference between what the graph shows and the actual figures.
If you have nothing better to do, you could draw the bar chart to the true scale by extending the columns down the page as far as the horizontal line immediately above "£421.50".
Alternatively, you could relabel the scale starting at zero and making each division equal to £100.
I will analyse this piece of taxpayer-funded, pre-election, political propaganda in greater detail, next week.


Flying blind

 

Another issue which has risen to the surface is the County Council's threat to evict the County Show from Withybush airfield.
This, I understand, is to enable the airport to be upgraded as part of some ambitious national air transport network.
Withybush airport is already one of the County Council's more spectacular white elephants (in a crowded field) and the prospect of feeding it with even more public money should fill us with dismay.
I notice that this year and next the council is set to spend £1.2 million on new hangers and a couple of years ago £800,000 went on resurfacing the runways.
Shortage of time means my research on this subject is limited but, from the documents I have immediately to hand, I can tell you that the losses for 2002/03 were £217,000 and for the current year £257,000.
For next year the projected deficit is down to £169,000 though that is mainly achieved by reducing the amount allocated to capital financing from £127,000 in the current year to£55,000 next.
Being a simple soul, I would have thought that given the large amount of capital investment over the past few years the cost of capital financing might have risen.
But, I suppose, that sort of silly idea comes from too much time spent in the real world.


Funny business

 

Accompanying Dr Michael Ryan's letter to Cllr Brian Hall, dated 16 October 2000 (Ryan - Hall) is a six-page business plan.
The proposed management structure for the new company envisaged Cllr Hall as Chairman of the Board, Marketing Director and Deputy CEO, while Dr Ryan was to fill the positions of CEO and Company Secretary.
Among 14 fine-sounding headings detailing the functions the company would undertake are: "ISO audit, certification and training services (ISO/HACCP, EFQM/MBNQA, and environmental health and safety and QA Office 2000 etc." and "Technology transfer, innovation and entrepreneurship development."
It seems that Cllr Hall was somewhat over-qualified in his previous post: running a two-pump filling station in Pennar.
And goodness knows what heights Dr Ryan might have scaled if he hadn't wasted the first two decades of his working life as a policeman and road safety officer in Dublin.
Finance was to come from four investors who were each to be persuaded to purchase £30,000-worth of "Redeemable preferential (sic) shares".
It seems that Dr Ryan and Cllr Hall took a bullish view of their own worth.
The business plan shows that, over the first three years, Dr Ryan was to be paid £130,000 (£40,000, £40,000 and £50,000) while poor old Hall was reduced to struggling by on a mere hundred grand (£30,000, £30,000 and £40,000).
The business plan also shows Hall and Ryan drawing £10,000 each in expenses, while the director of operations and director of finance - both to be appointed - were each to cost £31,000, annually.
Despite planned expenditure of £187,000, on staff costs alone, the company was projected to make profits of £53,000 (year 1), £29,000 (year2) and £48,000 (year 3)., though it is difficult to see how the figures for the first year are arrived at except by the dubious practice of treating the preferential (sic) shareholders' funds as revenue.
As things turned out, these ambitious plans to take over the running of Pembrokeshire didn't come to fruition, though, I am told, it was not for want of trying.
Firstly, it seems, nobody was killed in the rush to buy £30,000-worth of "redeemable preferential (sic) shares".
Not surprising really because, as Dr Ryan says in his letter to Cllr Hall: "...financiers look at the caliber (sic) and business background of the promoters before they look at the viability of the project."
It appears that our financiers took one look at the "caliber" of this pair and decided to leave their money in the building society.
The only fig-leaf available to the county council is the constant refrain that the company Euro-Ryall Ltd, set up by Hall and Ryan in December 2000, has never traded.
I am not sure this is true.
I have copies of the company's books for 2001, including a profit and loss account.
My accountant informs me that you can't have a profit and loss account unless you are trading.
What is true is that they never made any money - in fact they lost £658 in the year for which I have the accounts - but, as any businessman will tell you, one of life's easier achievements is to trade at a loss.
The reason for these losses, rather than the hefty profits envisaged in the business plan, is that they were unable to persuade anyone that their "expertise" and "core skills" were sufficient to let them "get [their] hands on the Masterplanning and project Management" of the various schemes they had lined up (See Ryan - Hall ).

 

Bubble and squeak

 

In his recent budget speech, Gordon Brown hinted at moves to free up the supply of housing land with a view to overcoming the shortage of new homes.
This shortage, most economists agree, is the principal cause of the rapid escalation in property prices which many pundits predict will eventually derail the economy.
However, balancing the supply and demand schedules for building land, is not without its problems, especially in the short term.
If, for instance, the introduction, by the Chancellor, of a more relaxed planning regime, or some fiscal gizmo, reduced the price of a building plot from £60,000 to £30,000, then, all other things being equal, new houses would be £30,000 cheaper than before.
Unfortunately, as there is a seamless market in housing, it would also reduce the price of all existing houses by a similar amount, because, as the price of that empty plot down the road has gone up over the years so has the one that on which my house and yours is built.
And nobody in their right senses is going to pay more than the going rate for my garden.
I often think that policy making is like choosing which bank of the river to walk along.
You tend to choose whichever looks the easier going from your starting point.
However, as you make progress downstream, you look across and see that the other side has none of the thorn bushes and brambles that are impeding your progress.
The river is not too deep to cross but there are some rather fierce crocodiles (in this case the dreaded negative equity) laying in wait.
The temptation is to struggle on and hope you find a bridge or a ferry by which to cross safely.
But, after a few hours walking, neither materialises - all that has changed is that the water is deeper and the crocodiles bigger and more numerous.
Mr Brown should get his feet wet now before the housing boom turns to bubble and bust.

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