Followers of the Swindon WiFi’asco will already be aware that the Public/Private partnership scheme ran into serious difficulty in 2010 after one of its three partners, (Digital City (UK) Ltd), spent the £400,000 of public money lent to it by Swindon Borough Council but failed to provide the town with the promised Borough-Wide WiFi network.
To all intents and purposes the project appeared to be completely stalled and public attention turned to the subject of the ‘lost’ £400,000 and who, if anyone, the Council would pursue as it tried to get our money back. Significant heat and light was produced by the spectacle of Garry Perkins, the deputy leader of Swindon Borough Council, (also a Director of Digital City), unsuccessfully trying to lay the blame for the financial collapse of Digital City on members of the public. North Swindon MP Justin Tomlinson recently described Councillor Perkin’s claims as ‘nonsense’.
Never afraid of making bold, (and all too often inaccurate), claims, Cllr Perkins then promised that a ‘new investor’ investor had been found and that the £400,000 would be repaid in a matter of weeks.
Yesterday, 3rd March 2011, newly published Council documents revealed that the council appears to be letting both the directors of Digital City, Rikki Hunt & Garry Perkins, completely off the hook as far as recovering the public loan money from either man, and instead has decided that:
The Council therefore needs to explore options for securing additional investment to ensure that the Council’s loan to Digital City is repaid
At 02.00hrs this morning Companies House records showed that Swindon Borough Council were still a minority shareholder of Digital City (UK) Ltd, but it appears to be behaving as if it it owns or controls the company. To be clear, Swindon Borough Council is a separate legal entity from Digital City UK Ltd and, as I understand it, the Council should be seeking to recover 6 months worth of unpaid loan installments and the outstanding loan capital of £400,000 from the Directors of the company. Had the council ‘secured’ the loan by registering a charge against the assets of Digital City in 2009, (something it had stated it would do – and then didn’t), at least some of the defaulted loan would be recoverable by seizing assets. The council forgot or, to be far more specific, Hitesh Patel, the Accidental Director of Digital City and also Swindon Borough Councils Director of Business Transformation, simply failed to register the legal charge within the time limit set out in law. SBC’s legal eagle, Stephen Taylor, recently tried to pass this failure off as a ‘typographical error’ instead of simply admitting that the Corporate Director level of the council is riddled with incompetents.
I think the Council should be pursuing Garry Perkins & Rikki Hunt for the £400,000 (plus missed interest payments), but instead seems intent on spending yet more public money to keep this scheme alive, and Garry Perkins out of court. Perhaps this is why, for several months, Perkins has been hysterically babbling that a ‘new investor’ for Digital definitely exists. Yesterdays publication of council documents make his claim seem slightly more credible today than they seemd last week.
I have no doubt that Garry would have very releived to learn that:
The investor is demanding a ‘confidentiality and non-disclosure’ agreement before it will enter discussions with the council.
For its part, the council says
“A potential investor is interested in investing in a high-speed wireless network for Swindon and is seeking to work with the Council on exploring options and approaches for this to happen. This company has the appropriate expertise and track record as well as the financial security to make the level of investment needed. The potential investor is, therefore, requesting that the Council enter into a ‘confidentiality and non-disclosure’ agreement so that both parties can enter into confidential commercial discussions”
For me, this is where the charade falls apart. I don’t believe any sensible investor would look twice at Digital City. It owns almost nothing of commercial value, has not completed a fraction of the promised wifi network, has only 20 customers paying a maximum of £9.99 each month and has been defaulting on its £400,000 to Swindon Borough Council for the last 5 months. The company is obviously fucked – so why the confidentiality agreement?
The Confidentiality agreement:
The confidentiality agreement serves several purposes, not least of which would be to give the council a ‘legitimate’, (in its view), reason not to answer a Freedom of information request I recently submitted to it, of which 2 of its 11 questions are quoted below:
10a. Will Stuart MacKeller be reviewing the investment/loan, or other financial arrangements, agreements and understandings with Digital City (UK) Ltd, Avidity Consulting and aQovia Ltd ? In all instances: Now the loan has been defaulted on, what steps will Mr MacKellar be taking in his capacity as 151 Officer to recover the outstanding £400,000 loan and missed interest payments due from Digital City (UK) Ltd or other individuals and organisations?
11. Has, or will, the Head of Audit at Swindon Borough Council, be asked or required to audit the material facts of the WiFi update report (as presented to Scrutiny on Monday 7th February 2011) including, but not limited to, the circumstances surrounding the registration or non-registration of a charge against the assets of Digital City (UK) Ltd, the non payment of interest payments by Digital City (UK) Ltd
12. What steps is Swindon Borough Council taking to establish why Mr Hunt resigned as Director of Avidity Consulting Ltd and who is now in legal control of the 30% share of Digital City (UK) Ltd held by Avidity Consulting Ltd after Mr John Richard Hunt resigned and was replaced by his wife, Mrs Laura Hunt?
Secondly, this confidentiality agreement will effectively neuter all aspects of Council Scrutiny of every aspects of the WiFiasco while it is in force. This will be especially useful for an administration that has already declared it wishes to prevent public scrutiny of ‘deals’ it wishes to make in the future.
Thirdly, the confidentiality agreement will be in force until just after the local elections in May, (only 8 weeks away). How convenient is that for Councillor Perkins?, Garry will be able to conduct his election campaign without answering any awkward questions about his Directorship at Digital City, the missing £400,000 or what’s happening now. “Sorry my old mate, I can’t talk about that, it’s confidential Do’ntyerknow”
But, I hear you ask: “This is a lot of trouble to go to if the intention is to save political blushes, avoid the embarrassing spectacle of Swindon Council taking its Deputy leader to court to recover £400,000 of public money and last, but not least, give Cllr Perkins an unfair advantage over his political rivals in the May local elections?” and normally I would agree with you, but I’d ask you to consider the following bit of semi-recent history and then reflect on current wifi’asco related events.
In 2007 the last Labour government funded an electronic voting pilot/trial in Swindon and on polling day voters were able to vote electronically from 64 locations in Swindon.
Each of the 64 polling stations in Swindon was equipped with between 2 and 10 laptop computers and connectivity at each polling stations was provided by either wireless technology, (WiMax), or BT broadband.
I understand that 8 polling stations had to use a BT Broadband connection because their locations were unsuitable for Wimax connectivity but the remaining 56 polling stations were equipped with Wimax connectivity.
At the time, there was quite a bit of news coverage of the e-voting trials but that gradually subsided and interest in Swindon Councils Wimax network waned until it had faded almost completely into the background to the point when nobody seemed to remember our Wimax system even existed when Digital City’s ‘new’ scheme was being hailed by the council as the best, most ‘innovative’ and ‘unique’ thing to arrive in Swindon since Mr Hovis started slicing his bread.
At some point though, someone at Swindon Borough Council apparently remembered it already owned a Wimax system – possibly when they realised the Digital City Scheme bore the flightworthiness characteristics of the Hindenburg – pulled the dust covers off and started pumping serious amounts of taxpayers cash into it. About £98,000 to be reasonably precise, plus the annual licence fees the Council is now paying to Ofcom – all for a system it doesn’t seem to want to talk about.
If I’m right about this, Swindon Borough Council already owns a Borough-Wide Wimax Hi Speed wireless internet system which comprises up to 64 fully functioning Wimax transmitter/receivers mounted on 64 separate buildings. Make no mistake, this is a large industrial grade high-speed wireless internet system which is well-suited to being expanded upon and used as the ‘spine’ of a fully functioning Borough-wide wifi mesh.
At present, members of the public cannot access this Wimax systeme because it is a high-speed ‘point to point’ system, (this type of system is often used where cables or fibre optics can’t easily be put), which delivers internet access to singular points, (imagine shining a laser at a particular point and you’ll get the principle), but it is from each of these individual points that a properly open and publicly accessible conventional wifi system can branch out, (using the same lamp post mounted transmitters used by Digital City in Highworth), along the streets of Swindon.
I also suspect it is no coincidence that the Council intends to spend £1,200,000 (yep, £1.2 million), ‘upgrading’ lamp post in the Borough. An odd thing to do when it is cutting jobs, services and everything else it can to the bone.
In conclusion then, when the Council says it it looking for investors in the Wifi scheme, I humbly ask that readers consider the above and reflect on whether the council is seeking investors solely for the failed Digital City Wifi’asco, or is actually using the heat, light and smoke generated by the WiFi’asco to disguise a much bigger purpose than any of us had previously supposed: That the next ‘deal’ will probably include the much larger but-not-much-discussed Wimax scheme, £1.2 million worth of new infrastructure and last, and most definitely least, the remnants of the failed Digital City scheme in Highworth.
For what it’s worth, I think the confidentiality agreement is intended to achieve so many objectives, (mostly political), that it will almost certainly fail to achieve most if not all of them.