Private Archives - Aberdeen Voice

ACC 2013 Taxes: A Good Year For Usual Suspects

Oct 032014

Previous administrations sold off property at a fraction of real value (funny, no one can find the details of the police investigation that was meant to happen – watch this space). They also wrote off £11 million in unpaid debts. Here is a snapshot of where you tax money was deployed last year. The trend of arms’ length bodies, quangos, quasi-charities, consultants and private companies hiving tax money off continues apace. Here is a small snapshot of where some of your money has gone. By Suzanne Kelly

Congratulations to Sir Ian Wood, lifetime achievement winner of a Northern Star business award. How wonderful.
A ceremony was held this past week; dignitaries ate dinners, media bodies were hired (Fiona Armstrong, compere) to appear and/or film this event, run by the Chamber of Commerce.

As self-congratulatory beanfeasts are concerned, this is not without precedent. But perhaps you should realise that you are helping to fund all these events at least in part, while being told there is little in the way of funds to keep schools open, to help the homeless, to provide round-the-clock care to those who need it and so forth.

Figures for this year’s awards are not made public, nor are they ever likely to be completely transparent, as there are now so many entities taking a slice of the pie.

Last year charity Station House Media Unit received some £2,300 for filming this event. The Chamber of Commerce has received a huge sum of money from us this year. During the Union Terrace Gardens referendum, it sent invoices between ACSEF unnamed contractors and the city council footed the bill.

When asked to name some of these suppliers – for instance whoever it was who received £150 (give or take) for a photo commissioned to show that UTG was ‘inaccessible’ (there is a huge sloping entrance by His Majesty’s Theatre), the Chamber wrote to say it was a private entity, and as such was not required to explain a thing.

A long, long time ago if you paid your tax, the government would directly use your money to buy goods services and employ people. Alas, this led to huge problems – such as your being able to clearly trace how much of your money was spent and where it went.

This is the age of the devolved responsibility entity, of quangos, special purpose vehicles and other entities which serve to obscure where your money goes and make salaries paid to those who act in these middle-man bodies invisible.

Tax money here in Aberdeen flows rather steadily to bodies such as Aberdeen Inspired, ACSEF, Aberdeen Chamber of Commerce, Station House Media Unit, and a host of consultants large and small.

While some of these bodies undoubtedly do good work – did they really provide value for money in 2013? And those that are social enterprises – does that put them above scrutiny? Does doing charitable work or providing training mean that any transparency as to how taxpayer money is spent should go out the window?

Here is a brief outline of how Aberdeen taxpayer’s money was employed in 2013 in a few situations.

A Tree For Every Citizen.

With great pride, Councillor Aileen Malone explained that this scheme had to be done in the most cost-effective way: it was only fair to the taxpayers seemed to be her approach. She was the convener of the Housing & Environment Committee, and pushed this scheme through claiming shooting the existing deer on Tullos was the only affordable thing to do for this great scheme (see Aberdeen Voice issues past).

In 2011 the taxpayer coughed up some £40,000 pounds to kill deer, raise fences and spray pesticide on the trees.

Here is a look at the invoices paid in 2013 for keeping the Tree for Every Citizen scheme going (note – this may not be a full list of costs):

Company/Consultant	Invoice date	Brief Description	Amount inc. VAT
Bryan Massie	19/12/13	TFEC – Site management, weeding	2493.49
Bryan Massie	(invoice 629)	TFEC – Tullos maintenance	9,943.98
Bryan Massie	17/5/13	TFEC – herbicides – St Fitticks, Westfield, Seaton, Balgownie	4303.80
Bryan Massie	17/5/13	TFEC – Tullos ‘beating up’ and tree shelter	16,682.04
Bryan Massie	12/2/13	TFEC – Tullos	28,968.00
		Sub Total	62,391.31
C J Piper / Chris Piper (noted for report claiming only a ‘vociferous minority’ objected to the TFEC scheme, said report not mentioning the tens of thousands of pounds he would be paid)	1/10/13	Preparation of strategy; time at £375 per day	12,000
C J Piper / Chris Piper	26/9/13	Scoping, survey, spatial plans	6,000
C J Piper / Chris Piper	26/7/13	Professional fees £950; travel 675	6,000
		Sub Total	24,000
Minimum cost to taxpayer 2013 for Tree For Every Citizen Scheme			86,391.31

Combined with previous expenditures of £83,598 known to have been spent on the scheme, perhaps we could have let the meadow and the deer stay. (note: a petition asking for full disclosure of the costs, and a moratorium on shooting more deer until population figures are known at the least is awaiting approval from the city for its wording; it will be launched soon. This petition will also ask for a ‘comfort letter’ from the SNH/Forestry Commission: the city had to pay £43,800 back for the failure of Phase 1).

So £83,598 added to the above £86,391 makes £169,989. How the procurement exercise for our experts was carried out likewise remains a mystery.

Fence-Sitting.

But if Aileen Malone insisted fences were too expensive back in the day she had the deer shot as being an economical solution (in logic defying animal welfare charities such as the Scottish SPCA and Animal Concern) – she did have a point: fencing is rather expensive. Here is a summary of invoices received from Alpha Fencing in 2013:

Alpha Fencing.

Invoice date	Brief Description	Amount inc. VAT
26/314 (included in 2013 accounts)	Airyhall	20,333
26/3/14		8,205
30/8/13	Duthie	4,671
22/8/13	Glashieburn	2,185
4/2/13		8,939
12/8/13		7,875
	Total	52,208

Perhaps there are other fencing contractors; Alpha catches the eye as they were involved in work on Tullos. If other fencing contractors likewise earned money from the taxpayer last year, perhaps we will be told what companies are involved.

Big Loser.

One area in which money was saved concerned the loss of the Big Partnership contract. Despite having operatives charging between £40 and £65 per hour, the invoices were not huge, and stopped c. May 2013.

Stewart Milne.

Stewart Milne’s companies have not done too badly out of the Aberdonian taxpayer. There was the small matter of land in Westhill sold to one of the Milne companies for a pittance, with the understanding that any profit would be shared with the city. That never happened and the Milne entity took the city to the highest courts in the country before losing (cost of this legal action unknown).

At the same time, the Milne machine won work worth nearly £10 million. In 2013 invoices submitted for contracts with Milne were as follows:

Brief Description	Amount
Hayton Road	30,044
Bryon Park	47,130
Rorie Hall	28,097
Total	105,271

Aberdeen Inspired

Perhaps someone from Aberdeen Inspired will be inspired to share with the business rate payers – i.e. the consumers – precisely what it does with all of the money it is given from the council. We’ve had bunting; the city has stumped up extra money for those trash compactors dotting the street. (nb – is there no waste segregation in these bins and if not, are we not just adding to landfill by using them?).

Inspired has also decided to use mobile phone signals to trace our footfall in the area; tracking how much time is spent inside a shop for instance. Data protection lobbyists are very concerned about the technology involved; Inspired insists it is completely anonymous.

At any rate, what is kept secret is how much anyone connected with Inspired is paid, how their procurement process works, and who is making the decisions. In case you think there is nothing more to Inspired than small change for craft stalls and banners, here is what they received from ACC last year:

Invoice date	Brief Description	Amount inc. VAT
2/10/13	Bid Levy Collection, both outstanding and collection, plus VAT	148,326.32
2/7/13		715,292.94
14/2/14 (in 2013 accounts)		30,038.73
12/8/13		28,235.52
29/3/13		21,695.80
2/10/13		9,550.00
	Subtotal re Bid Levy	953,139.31
4/12/13	Trash bins	18,489.60
25/10/13	Trash bins	18,489.60
(date unclear)	Ice rink	12,000.00
(date unclear)	‘wayfinding project’	31,830.60
	Subtotal non Bid Levy	80,809.8
Total invoiced by Bid/Inspired to ACC 2013		1,033,949.11

It would be interesting to see where all of this money has been used, what the overheads including salary are, as the tattered bunting blows in the breeze. No doubt some good work has been done – but what is the cost, what has been done with this consumer-generated, taxpayer-supplied million pounds: and has it resulted in increased sales for those who voted the scheme into existence?

SHMU

Station House Media Unit engages in training, and helping disadvantaged area residents interested in the media; it publishes brochures for and/or with the council. Last year SHMU was criticised when it used photographs created by people who had not given advance permission and who had not been offered payment for their work – this would be a standard business practice for any publisher.

SHMU reacted badly to exposure of this situation; it may well be a charitable institution doing good work – but that does not put it above scrutiny.

Considering that so much of its funding comes from the public, it would be interesting to see what salaries are paid, what the overheads are, how procurement is done, etc, etc. – but again, this is a body that while funded largely by the public is not accountable to the public under Freedom of Information legislation.

Here is a selection of some of the funds SHMU received last year: the Council had 43 pages of documentation pertaining to funds sought / funds released to SHMU:

Invoice date	Brief Description	Amount
29/11/13	Pertains to community support fund grant offer;	1,624
31/5/13	Filming Start Awards (Chamber of Commerce award ceremony to business; Sir Ian Wood received a lifetime award in 2014)	2,300
	Quarterly funding of 13,750/quarter	55,000
Winter 2013; Spring 2014	7 community magazines	11,929
4/12/13	Additional cost for 7 magazines	1,624
(date unclear)	Training	8,500
7/12/13	Connecting communities through community media	16,750
Sub total for this selection of SHMU invoices		97,727

There were a number of youth employment-related invoices as well.

But far and away the biggest earners of the invoices examined were the Chamber of Commerce and PricewaterhouseCoopers.

Secret Chamber.

The Aberdeen and Grampian Chamber of Commerce acted as a de facto go-between during the Union Terrace Gardens referendum; ACSEF would commission work across a wide spectrum of services and price brackets. This would be invoiced to the City Council via the Chamber of Commerce.

Invoices of this type seen by Aberdeen Voice did not disclose who or what organisation performed the work undertaken. What procurement procedures were followed and if any ACSEF members directly benefitted from these invoices remains unclear at present: there seems to be no obligation ACSEF or the Chamber of Commerce to say how taxpayer money was spent.

Thirty one documents were presented by the City Council’s finance office covering invoices and funds paid to the Chamber in 2013. Some were for miniscule amounts such as breakfasts. Some were just a bit larger:

Invoice date	Brief Description	Amount
29/11/13	Sponsorship of transport to Rio	£542.48
30/4/13		2112.00
28/6/13		2112.00
13/11/13		324.00
29/11/13		542.48
18/6/13	Northern Star	7,800.00
1/10/13	Membership	2,838.00
6/8/13	Offshore Europe Breakfast	588.00
28/2/13	Research	4,560.00
31/12/13	Research	4,560.00
28/2/13		1080.00
31/12/13		540.00
29/11/13		2,160.00
29/11/13		7,020.00
20/2/13		1,140.00
Total for approx. half of the 2013 invoices		£37,918.96

Beancounters Beanfeast.

The accounting firms have done quite well this year. KPMG made a tidy £10,740; this was positively modest compared to PricewaterhouseCoopers.

PwC may be remembered for its projections during the UTG referendum: its projections for the web’s construction and associated prosperity were, shall we say, enthusiastic. As per an earlier article on the subject:

“PricewaterhouseCoopers have come up with some grandiose projections including the creation of some 6,500 permanent jobs and £122 million flowing into Aberdeen every year until c. 2023: all because of the granite web. PricewaterhouseCoopers were first paid £41,000 and change for TIF-related work in March 2010. Other invoices followed, and so far I have been shown by Scottish Enterprise £71,000 worth of PwC invoices.”

The firm still enjoys the generosity of the Aberdonian taxpayer. Its consultants received hundreds of pounds per day each; its invoices covered a spectrum of services from the (scandal-hit) crematorium to fraud work. Here is a list of their 2013 invoices to ACC in round figures:

Invoice date	Brief Description	Amount
15/7/13	Pinewood	1,800
3/2		170,949
20/3/13	HMRC	1800
15/7/13		9,600
15/10/13		5,200
9/7/13		2,400
3/12/13		33,270
17/7/13		30,229
16/9/13	(included c £19K for crematorium)	78,142
15/4/13		165,889
18/12/13		59,281
21/11/13		86,540
8/11/13		13,678
1/5/13		2,940
29/5/13		11,206
6/8/13	Letter to HMRC	900
Total to PricewaterhouseCoopers 2013		673,824

Summing Up.

The city has joined the ranks of other municipalities that have ‘outsourced’ functions in order to save money. This growing trend does not always stand up to scrutiny. Consultants are needed to run services which, if were previously not-for-profit when in the public sector, need to be profitable for those who have chosen to run them.

In days gone by, the reason people paid tax was that there were some functions – education, good health care, etc. – which ideally should be free of the need to turn a profit. Our taxes were meant to benefit the people and the causes that needed help.

As more and more outsourcing is done, transparency moves away. The city’s accounts this year allude to an incident of fraud. Is it possible that the more people and entities that grow around managing services, the higher the chance there is of fraud? Does the increasing lack of transparency lend itself to those who would commit fraud?

Can a private company such as PricewaterhouseCoopers that stands to make money if (for instance) a granite web is built be entirely trusted to be 100% impartial on weighing up the practicalities of a project which would benefit its profit line?

Should the city weigh more carefully how its arm’s length bodies engage in procurement? From the 2013 figures, a case could be made that the city needs to look into its financial arrangements more carefully (and that’s before we look at the costs of outsourced health care).

Audit Scotland had some strong recommendations to the council several years back. If lessons have been learnt, let’s hope we get a clearer picture in the future of where our money is going.

Comments enabled – see comments box below. Note, all comments will be moderated.

[Aberdeen Voice accepts and welcomes contributions from all sides/angles pertaining to any issue. Views and opinions expressed in any article are entirely those of the writer/contributor, and inclusion in our publication does not constitute support or endorsement of these by Aberdeen Voice as an organisation or any of its team members.]

Despairing NHS

Creative Writing, Opinion 1 Response »

Sep 062013

By Oliver Swingler.

In the darkness,
Six feet under,
Bevan turning in his grave
Sixty-five years of free healing,
The NHS he cannot save.

All the doctors,
And the nurses,
Cleaners, porters do their best,
But their efforts no longer valued
In the growing profits quest.

Drug companies pay for research
And they promise us a cure
But all they want is extra profit
And to hell with the sick and poor.

Clegg and Cameron keen to finish
Dismantling done by Brown and Blair,
PFI debts, target culture.
Reorganised for millionaires.

Shipman, Savile, Stafford hospital,
Just how bad can scandals get,
Whistle-blowers, enquiries ignored,
But you ain’t seen nothing yet!

Oh our caring,
Oh our sharing,
Now despairing NHS,
Thou art lost and gone for profit,
Privatised to serve the rich.

Image credit: <a href=’http://www.123rf.com/photo_8687649_lonely-senior-woman-in-the-hospital-bed-hooked-up-to-an-iv.html’> lisafx / 123RF Stock Photo</a>

Comments enabled – see comments box below. Note, all comments will be moderated.

The TIF Bankruptcy Case For The City Garden Project

Aberdeen City, Featured, Opinion 2 Responses »

Aug 172012

As crucial Aberdeen City Council votes loom large for the future of Union Terrace Gardens, Mike Shepherd considers the TIF business case and finds it lacking.

Just imagine you are the managing director of a big business. An opportunity has come up to build a new development.

Private investors have promised you £70 million, but it means that you have to borrow £92 million and the government have said they could find £20 million of grant to fund the rest.
Half the shareholders are revolting as they think the venture looks far too risky and the existing company debt is humongous.

The time comes to make a decision on the investment and submit a business case for borrowing to the board of directors. It turns out that the private investors can only come up with £55 million and now the grant funding has fallen through because the funds never existed in the first place.

Calamity – the project now has a shortfall of £35 million. What do you do? The sensible thing would be to walk away.

Not Aberdeen Council. I refer of course to the TIF business case written by council officials recommending that the council borrow £92 million for the redevelopment of Union Terrace Gardens and other city centre projects.

The final business case for TIF has been made public and will be voted on at the finance committee on Friday 17th August.
(The agenda for this meeting can be seen at http://committees.aberdeencity.gov.uk/ieListDocuments.aspx?CId=146&MId=2668 )

A critical reading of the report makes one thing obvious – they haven’t got all the money!

Yet, it hasn’t stopped council officials from producing a business case where the critical points are buried in waffle and padded out to 187 pages.

Out of the badly argued case (with assumptions, inconsistencies and dodgy data) emerges this conclusion on page 141:

“Underpinning the TIF business case is the requirement for £182 million of investment in enabling infrastructure. At present the business case shows that there is a commitment for £90 million of investment from the private sector and the need for £92 million of public sector investment.”

However, there is a shortfall of £35 million on the public sector funding required for the project.

£70 million is recognised as the private sector investment in the quote above, yet they are £15 million short. As page 46 notes:

“This includes £55 million that has already been pledged to the City Garden Project by private donors and a further £15 million still to be raised.”

So where is this extra £15 million supposed to come from? Page 50 records that:

“Aberdeen City Garden Trust will provide capital funding, act as developer for the City Garden project … ACGT have also undertaken to raise a further £15 million of philanthropic donations, to supplement the £55 million already pledged to this project from philanthropic donations.”

The begging bowl is going out for £15 million. Chaps, you have less than a week to get the money.

The remaining £20 million of, “investment from the private sector” comprises “potentially £20 million of grant funding” for an Art Gallery extension. But does this money exist?

Further reference to page 50 shows that:

“The remaining £20 million of grants is attached to the Aberdeen Art Gallery Project. Officers will pursue a variety of grants to secure the required funds.”

Note the use of the future tense, “will pursue” here.

Council reports show that officers have yet to apply for any funding and, with the exception of a possible £4 million of Scottish Heritage Lottery funding, no other sources of money appear to have been identified.

So what happens if they don’t get the £20 million grant funding for the Art Gallery?

To page 50 again:

“Should there be a funding gap officers will need to consider how additional funds will be attracted, generated or secured via other fiscal arrangements.”

Anybody fancy a Monet, Turner or a Cezanne? Going cheap …

This isn’t a business case, it’s a bankruptcy case.

Last year, in a discussion with a council official, I mentioned the possibility of the City Garden Project proving a financial disaster and bankrupting the council. I was cheerfully told that a public body can’t, technically, go bankrupt although it can end up in a state that closely resembles it (Greece comes to mind).

But make no mistake, Aberdeen Council are going to get burnt here. Councillors are being asked to vote on borrowing £92 million for a project where there is a very large shortfall on external funding and no guarantee that any of this money will ever turn up.

It would of course be sensible to delay the vote until the money does actually appear. Yet there is an insanely mad rush to progress with this project, even if it doesn’t make any sense to do so.

What is not discussed anywhere is the mechanism by which Aberdeen Council will guarantee the loan

Another problem with the report is that no detailed costings for the various projects are given. For example, the £140 million cost for the City Garden Project is a nominal cost from the original technical feasibility study written over three years ago. It is certainly not the final costing.

This means that councillors could be committing to a multi-million basket of projects with no clear provision of accurate costs. I find this situation alarming and hope for our sake that they do so too.

So who takes the risk on the borrowing? This is made clear on page 50:

“Aberdeen City Council also recognise that the risk sits with them.”

The report mentions that the borrowing would be from the Public Works Loan Board. What is not discussed anywhere is the mechanism by which Aberdeen Council will guarantee the loan.

The Scottish Futures Trust, operating on behalf of the Scottish Government, have provided guidance as to how a TIF business case should be submitted to them.
See http://www.facebook.com/l/QAQE16FGI/scottishfutures.ehclientsTIF

In Section 4.4 it is stated that:

“Economic assessments to be carried out:

By an objective economist with a recognised track-record of economic assessment for public bodies”

On page 72 we find that Aberdeen City Gardens Trust is identified as providing:

“Core expertise to assist in a robust TIF business case in order to support ACC’s efforts.”

Let’s remind ourselves who Aberdeen City Gardens Trust are again by referring to page 46:

“ACGT will provide capital funding, act as developer for the City Garden Project …”

An earlier draft makes it clear that the advisors to the ACGT were also involved in providing critical input on economic uplift that is supposed to result from building the City Garden Project and related schemes.

Thus a private company seeking to take over a lease and operatorship of council property have been allowed to influence a report justifying the case for Aberdeen Council borrowing £70 million to fund a project that the company has a direct interest in.

In a statement published by the Press and Journal last Monday I wrote:

“The Council would most certainly not allow developers to provide direct input into a report recommending planning acceptance; so why is it appropriate to allow developers to provide economic advice to councillors when the outcome could clearly act in their favour?”

I have complained vigorously to the Chief Executive of the Council on this matter. It is very bad governance. I have also drawn this matter to the attention of the Council Monitoring Officer and asked her to investigate this.

Councillors will vote on Friday as to whether this business case is approved or not.

It would be sensible to delay the vote until the business case can be proved to be robust. Aberdeen Council also needs to find an objective economist, someone who is not directly involved in the project, to give advice.

Otherwise madness would lie in approving the business case and exposing Aberdeen Council to financial disaster.

Comments enabled – see comments box below. Note, all comments will be moderated.

Letter To The Sane World – A UTG Overview

Aberdeen City, Articles, Community, Environment, Featured, Information, Opinion No Responses »

Feb 292012

Shakhaf Barak wrote to a friend highlighting the history behind the current referendum that is dividing the city. He has kindly allowed Voice to use it, almost verbatim as the deadline approaches for voting.

Dear Friend,
Here in Aberdeen there is a bitter referendum taking place, and it could go either way. Over 70,000 people have voted thus far, in a city of barely 212,000 souls, and both sides have reported each other to the police. Central to this story is a 250-year old city centre park, Union Terrace Gardens, and the billionaire oil tycoon seeking to redevelop it.

Union Terrace Gardens are similar to Edinburgh’s Princes Street Gardens, lying in the natural amphitheatre of the Denburn valley, the Denburn being a stream which flows right through the city, underground where it borders the Gardens. Much of Aberdeen’s best architecture was clearly envisaged to overlook this area.

The Gardens are home to a cluster of 260-year old elms trees that once formed part of the Corbie Haugh, a historic wood which ran through the valley. This is among the largest concentration of healthy mature elm trees in Europe, and they are reputed to have escaped Dutch Elm Disease, not only due to their isolation, but also because the pollution of the city has afforded some sort of protection from it.

Both the park and its beautiful Victorian toilets are Grade A-listed, and all of the trees are under preservation orders. Up until as late as 2003, the Gardens formed the centrepiece of Aberdeen’s Britain In Bloom entry, and they were truly stunning, but since then expenditure has all but ceased, and the toilets have been closed for several years.

In 2008 a local arts organisation, Peacock Visual Arts (PVA) was granted planning permission for an award-winning and sympathetically-designed arts centre to be built into the hillside of the Gardens. This would have meant felling a small number of trees but none of the elms. The design was universally acclaimed and it was hoped that this scheme would help regenerate interest in the Gardens.

Enter Sir Ian Wood, one of Scotland’s richest men, and chief of Wood Group PSN. Sir Ian decided that he’d like to redevelop the Gardens by building a five-storey bunker in their place, whilst covering over the adjoining railway line and urban dual carriageway, with the entire roof of this construction forming a flat civic square at street level. It was not entirely clear what would be installed in the bunker, although speculation was rife to say the least.

He offered the council £50m towards the cost of this project, which was mooted to cost £140m. This was possibly an optimistic figure since Union Square, a similarly sized shopping mall with none of the technical difficulties or prior excavation work, cost £250m to build. The council felt this offer was too good to refuse, but the some members of the public were up in arms.

Sir Ian decided to put the proposal out to public consultation and promised to walk away should the public reject it.

The ‘consultation’ was commissioned by Aberdeen City and Shire Economic Future (ACSEF), a publicly-funded unelected QUANGO, and conducted by The BiG Partnership, Scotland’s largest PR company.

It many ways it resembled a marketing exercise. The bulk of participation was via a website, which asked several questions with a somewhat loaded feel to them. For technical reasons, the question on whether or not to proceed with the plan defaulted to a YES vote.

If, during completion of the questionnaire, any previously-given responses were subsequently amended, this again defaulted back to a YES vote. When the results were released, it became apparent from the comments sections that may people who had intended voting NO had instead been recorded as YES voters.

Over 10,000 people participated in the consultation, and In spite of it’s technical oversights, the public voted against the Civic Square proposal by 54%-46%, a healthy and significant majority. However the PR machine kicked in and somehow spun that the 202,000 people who had not participated possibly represented a silent majority in favour of this scheme.

Critics described it as a cross between Tellytubby Land and a skate park

Sir Ian decided not to walk away, and the project went to a council vote. The council voted in favour of taking the plan forward at the expense of PVA who by that time had 80% of their £20m funding in place. It has subsequently been alleged that some of the PVA funding was diverted into the new project.

The BiG Partnership now re-launched the plans under a new name, The City Garden Project (CGP). It was claimed that the outcome of the public consultation was that the public were broadly in favour of a garden as opposed to a civic square. Any implication that they were actually in favour of preserving the existing gardens was ignored.

The interested parties now felt that the best option was to redevelop the Gardens by building a five-storey bunker in their place whilst covering over the adjoining railway line and urban dual carriageway, with the entire roof of this construction forming a new garden at street level.

The whole thing had an air of déjà vu.

This time it was decided to hold an international design contest, paid for with public money. Six designs were shortlisted from hundreds of entrants. One, The Granite Web, bore a striking resemblance to Civic Square concept, albeit with less concrete and more greenery. Critics described it as a cross between Tellytubby Land and a skate park.

The local press heavily promoted the Granite Web design from the outset of the contest, leading with it on their front page and providing it with more photo coverage than the other designs. It was almost as though it had been ordained.

The public voted, and spoiled ballots aside, all indications were that The Winter Garden design proved the most popular. An independent poll confirmed this and put The Monolith in second place.

Tellingly both of these designs retained much of the topology of the existing Gardens. Word on the street was that The Granite Web was not a popular choice, but we’ll never know for sure, because a decision was taken not to release the results of the so-called public vote to the public.

It was then announced that the winner of the private-public vote would be put forward to the selection panel, along with another design. The self-appointed selection panel consisted of Sir Ian, some other influential people from the oil industry, an architectural consultant on the project payroll, and a councillor who backed the project.

The two designs discussed were the acknowledged public favourite, The Winter Garden, and you’ve guessed it, the joker in the pack, The Granite Web. When the panel announced the result, it should have come as no surprise to anyone that they had chosen The Granite Web, yet there was a shocked silence, and even those had come out in favour of the redevelopment initially appeared bemused if not downright confused.

The original Civic Square was mooted to cost £140m, with £50m coming from Sir Ian, £20m from the private sector, and the rest to be borrowed through a Tax Incremental Funding (TIF) scheme. Any over-run would be covered by the council (read local taxpayer) .

Only £5m of the private sector contribution has materialised thus far, but there has been an announcement that The Granite Web would be significantly less expensive to build than the previously-envisaged, but somewhat less complex, civic square. Sir Ian has offered to personally fund up to £35M of any cost over runs, should they occur.

The TIF proposal cheerfully bends all the guidelines of TIF funding. TIF is intended to be used to redevelop brownfield sites, with the loan being repaid over a 25 year period through increased rates recouped from any businesses setting up in the redeveloped area. The city council had already approved planning permission for two new industrial estates on the outskirts of town, under the business case for the TIF funding, these new estates become part of the TIF zone, so in The Granite Web’s case, sections of the TIF zone are located several miles away from the actual redeveloped area.

The predictions are for 6,500 jobs and £122m annual revenue to the local economy, all based on the new industrial estates, which have no obvious linkage to The Granite Web, operating at full capacity. Even if one were to accept that any new jobs could be somehow attributed to The Granite Web, the figure of 6,500 seems unlikely given that the London Olympics is only projected to create 3,500 jobs.

Either way, the setup feels a bit shaky; the truth is that these jobs and their associated revenue will accrue with or without The Granite Web.

By this time, councillors seemed to be getting edgy and unwilling to green-light the project, so they decided to hold a public referendum. Any group wishing to campaign was required to adhere to an £8,000 spending limit, and for this they were provided with 300 words of text in the voting pack.

The packs went out, but unfortunately some of the Retain lobby’s statements were mangled due to a ‘computer error’. The voting packs were closely followed by a big money public relations mail bombing campaign by The BiG Partnership promoting The Granite Web. Publicity materials went through every letter box, pro Granite Web articles dominated the press, and adverts were played around the clock on the local radio stations.

Apparently this expenditure was permitted by virtue of being funded by an ‘unregistered’, and as yet anonymous, campaign group – whatever that means! I guess it’s a bit like not having to pay tax because your parents never applied for a birth certificate, who knows? By this point, things were becoming surreal to say the least.

The referendum closes on 1 March and it’s a bitter fight that has divided the city. For example, an oil company boss has made a complaint to the police alleging mail hacking and cyber bullying. The police claim they are taking this allegation seriously. There have also been two arrests possibly related to claims of vote-rigging, but ultimately no one was charged.

The town has gone berserk and it’s civil war all over Facebook. It’s as if we’re all experiencing a really, really bad shared dream. I just dread to think what we’ll all be waking up to on Saturday morning.

The Great City Gardens Project Gravy Train

Aberdeen City, Articles, Community, Featured, Information, Opinion No Responses »

Feb 282012

A person might think that a chamber of commerce exists to promote local businesses. Here in Aberdeen this is true as well. But as Aberdeen Voice’s Suzanne Kelly learns – the taxpayer is funding at least some of the PR work for the City Gardens Project – and the Chamber of Commerce and ACSEF seem to be leading the City Council by the nose.

The proposed City Gardens Project/Granite Web is a contentious idea which would see a mix of public and private interests building huge, granite ramps over Union Terrace Gardens.
While this idea may not even get off the ground, it has been a gold mine for some fortunate businesses via the Aberdeen & Grampian Chamber of Commerce – at the taxpayer’s expense.

This article will primarily deal with money that the City Council was invoiced by the Chamber of Commerce for PR-related work. Before doing so, a little recap of other financial facts will add perspective.

PriceWaterhouse Coopers have come up with some grandiose projections including the creation of some 6,500 permanent jobs and £122 million flowing into Aberdeen every year until c. 2023: all because of the granite web. PriceWaterhouse Coopers were first paid £41,000 and change for TIF-related work in March 2010. Other invoices followed, and so far I have been shown by Scottish Enterprise £71,000 worth of PwC invoices.

These invoices are made out to Scottish Enterprise, and Scottish Enterprise is funded by the taxpayer. Unfortunately, these projections have been seized upon by the press and turned into ‘facts’ (The Press & Journal published these and other items in a box entitled ‘facts and figures’ on 19 January next to an article about the PwC projections and the garden’s many projected benefits).

The unelected and free-spending and secretive ‘Vote for the City Gardens Project Group’ have likewise promoted these figures in their literature as being reliable facts as well. They are projections, and arguably very optimistic ones at that. Whether or not these glowing projections (that we will have more permanent jobs from our web than London expects from its 2012 Olympics) are based on the fact that PwC is being paid by the side that wants to build the web is something the referendum voters may wish to ponder.

A Freedom of Information request I lodged with Scottish Enterprise some time ago revealed (details of which I have previously published) included:-

Item	Description	Date	Amount
1	Technical Feasibility Study to undertake an engineering, cost and design appraisal of the development options for UTG, each incorporating an arts centre.	Jun 2009	£162k
2	Architect, Design & Project management fees for a Contemporary Arts Centre project	Feb 09/May 10	£226k
3	Consultation Report – City Square Project..	Mar 2010	£113,915
4	Union Terrace Gardens (TIF)-Tax Increment Financing	Mar 10 Oct 10 Nov 10	£71,959.65
5	Scottish Enterprise holds 22 copies of invoices relating to ACSEF approved spend for activities relating to stakeholder engagement, events management, and communcations. [sic]	2009-10 2010-11	£51,766.60 £22,712.72

(source – Scottish Enterprise email exchange with Suzanne Kelly May 2011)

While this £648,000 was being spent, Aberdeen City Council was battling with potential job and service cuts in order to balance its books. It seems that these costs have largely been paid by the taxpayer via Scottish Enterprise and other vehicles, and I can find nothing to show that the Wood Family Trust, which has offered £50,000,000 to further the project, has paid towards any of these costs. The PR and promotional invoices referred to at Item 5 have been paid by the Aberdeen City taxpayer.

Before moving on to Item 5, which is the subject of this article, some of these other items are worth a further glance.

At Item 2 you will notice we are now talking about some kind of ‘Contemporary Arts Centre project’ – is Peacock already being edged out of the picture at this point?

Item 4 would seem to correspond to PriceWaterhouse Coopers invoices which I referred to. How much more money has been spent on PWC since this May 2011 exchange is unknown.

From what I have been subsequently sent by Scottish Enterprise, the bulk of the invoices at Item 5 were from the Aberdeen & Grampian Chamber of Commerce to the City Council. In the words of Scottish Enterprise:-

9 invoices relate to financial year 2009/10 – these total £51,766.60

16 invoices relate to financial year 2010/11 – these total £36,692.95. This total is higher than the original figure stated due to the invoices received after the date of that response
There has been no spend on the City Garden Project from the ACSEF budget during the current financial year (SK notes – it is only February – there is time)

(source – Scottish Enterprise email to Suzanne Kelly February 2012)

Arguably a mere £88,459 is small change as Aberdeen City contemplates borrowing £92,000,000 (minimum) if the project goes ahead. However, this is money which the City paid from its own budgets – it is taxpayer money. Should a financially-pressured city use pubic money for propaganda purposes – PR, events and photos designed to promote the City Garden Project? Is the Wood Family Trust contributing any money towards these expenses yet? I simply do not know.

A spreadsheet of the expenses comprising Item 5 can be found online at http://oldsusannahsjournal.yolasite.com/ I would recommend looking at these 50 or so items.

If you look at the wording in the table above, ACSEF is apparently approving this expenditure. ACSEF is a public-private quango, and at the time of writing, Stewart Milne is on its board. He owns the Triple Kirks land adjacent to Union Terrace Gardens, and he wants to turn this landmark into an office complex which will likely enrich him if it goes ahead in my opinion.

Despite several emails, no one in a position of power has the slightest qualm with Mr Milne potentially having a conflict of interest. Why precisely ACSEF is allowed to commission and recommend for payment invoices to the City Council is a matter I personally find worrying.

Virtually none of the invoices from the Chamber to the City specify who / what company actually performed the services in question. What company got all the PR work? Who took the photos? I do note that Zoe Corsi of the BIG Partnership is on the Chamber’s Board of Directors – as are other key players such as Tom Smith, one of the two directors of the private entity, Aberdeen City Gardens Trust. This company seems to be in the thick of the decision-making processes; it is apparently the company which is holding onto the results of the design finalist public vote – which it refuses to release at present.

The taxpayer apparently paid for that exhibition and the public vote – and yet a private company seems to be withholding the results. The argument has been put forth that it is no longer relevant. Many people took the opportunity to write on the voting papers that they were against all the schemes and wanted the gardens retained and improved.

The public should have had this ‘no’ option at the final selection vote, but it seems councillors who asked for a ‘no’ option were outmoded by the Project Management Board (note – see the website listed previously for details of how all these companies and entities have interesting personnel overlaps).

It may be of interest to accountants that the party which actually performed the work not specified on these invoices, and with only a rare exception is VAT ever charged. It would be interesting to know whether or not the Chamber of Commerce adds any fees or commission charges to the work it is invoicing the City for.

Highlights of the list of invoices include:-

£180 paid for a photograph showing ‘inaccessibility of Union Terrace Gardens’
over £25,000 paid for ‘Stakeholder engagement’ events and so on since October 2009 to August 2010
£3500 paid to ‘Comedia’ for Charles Landry to attend event / speak
Redacted line items and handwritten notes adorn several of the invoices
One invoice – No. 42407 shows only one line relating to ‘coach hire’ – this is £246. However, the total shown on this one page invoice is for £7444 – what has happened?
A January 2010 Advertising bill from Aberdeen Press & Journals for £ 2,820 ( See: http://fraserdenholm.blogspot)
£11,000 in February 2010 charged from the Chamber to the City for “Development of images, movie, powerpoint and exhibition material for City Square Project as per attached sheets”

As to the redacted text on the invoices, redacted text has started showing up in Project Monitoring Board minutes and reports again, despite Councillor McCaig’s previous intervention to cease this practice. One company which has had its name redacted from recent documentation is Brodies.

The value of three Brodies invoices which I received copies of is around £12,000. One of these invoices from April 2011 is for:

“City Gardens Project – Development Constraints Report (Legal [sic] To fee for professional services in connection with the preparation of a development constraints report relating to the title of Union Terrace Gardens, Aberdeen, and surrounding land.”

I suppose our City’s in-house legal department cannot be expected to know whether or not it has free title to Union Terrace Gardens. Happily, experts have demonstrated the land is Common Good Land. As such, whether any of these garden projects can or should be legitimately carried out will be a big question in the future.

Earlier we saw how ACSEF was allowed to recommend these expenditures; we have seen how the Chamber of Commerce invoices the City for ACSEF-approved costs. If we were to put in some of the over-lapping names from ACSEF and the Chamber of Commerce into the equation, we would be able to see that:

ACSEF [including Stewart Milne, Jennifer Craw (of Wood Family Trust), Tom Smith (Director, Aberdeen City Gardens Trust), Colin Crosby (Director, Aberdeen City Gardens Trust), Callum McCaig (ACC) ]

approved invoices generated by the Aberdeen & Grampian Chamber of Commerce [Colin Crosby; Zoe Corsi (BIG Partnership) , former director Tom Smith]

for the City Council [Callum McCaig]

to approve to further the aims of the Garden Project (CGP entity members include John Michie, Colin Crosby, Jennifer Craw).

Given the above, I suggest that the time is right for an entire re-think of how this project has been allowed to develop, and a full investigation into the demise of the Peacock plan and an investigation into the genesis of the current state of affairs might not be a bad idea as well.

While this is going on, a local care home has announced it will no longer provide 24/7 on-site staff as there is not enough money. Residents were told to drink less fluids at night time.

PwC: An Internationally Renowned Institution

Aberdeen City, Articles, Community, Featured, Information, Opinion No Responses »

Feb 232012

“They rubbish job projections made by internationally renowned institutions” was one of many statements made by Aberdeen City Councillor John Corall in an article headlined “Development opponents ‘tired, blinkered people’” which appeared in the P&J on 20th Feb 2012. Richard Pelling takes a good hard look at PriceWaterhouse Coopers and begs to differ.

Which “internationally renowned institutions” made the job projections that Councillor Corall was referring to? PwC? They did the TIF business case which contains the only job projections I’ve seen (see Think of A Number in AV for more details). PwC are indeed internationally renowned and hit the headlines frequently, even without taking their role in the Global financial crisis into account.

On 6th April 2011 the BBC reported that “Satyam and PwC are fined in US for accounting fraud” noting that Satyam (an Indian outsourcing company) which PwC audited had falsely reported “more than $1bn in profits over five years” – this cost PwC India a $7.5 million fine from the US Securities and Exchange Commission.

Closer to home, in January 2012, the Yorkshire Post reports that PwC were fined £1.4 million for “wrongly telling regulators for seven years that JPMorgan Securities was keeping its clients’ money safe”

Anyway, the fact is that PwC prepared the City Centre Regeneration Scheme (CCRS) business case for Aberdeen City Council, but Stewart Carruth – Aberdeen City Council’s director of corporate governance – is a PwC old boy, so everything will be in order and we have nothing to worry about there.

Outside of ACC, the projections in the business case are, however, being presented by some as hard facts. For example, in their City Garden Project FAQ Diller Scofidio + Renfro state that the CCRS “will attract 6,500 new jobs and contribute £122m into the economy”. These are projections, not hard facts.

Projections and predictions often go wrong …

Who could have predicted that the once mighty Glasgow Rangers would be insolvent? Couldn’t happen to them could it?
Now, way back in June 2002, Unison published a paper ironically titled “A Web of Private Interest” which looked at how “internationally renowned institutions” had built the case for and benefitted from privatisation in its many forms, citing some work done by PwC :

“PwC has now stepped in with what it calls new “hard evidence”. PwC, which describes itself as No.1 in the privatisation league table, has stepped up its promotion of PFI with a report that claims to have evidence that “PPPs work”
– ( Public Private Partnerships: A Clearer View, October 2001).

This will be balm to the ears of a government that says what works is all that matters.

However, PwC’s evidence turns out to consist of 90 anecdotes about the benefits of PFI from senior managers directly responsible for introducing it. There is no financial or service data despite major criticisms that PFI increases costs and reduces staffing, service volume, and terms and conditions of employment. Asking those with the job of introducing PFI to their services whether the policy is good or bad is by any standards a pretty lame research method. But after 9 years of PFI the government is still relying on evidence of this sort from one of the policy’s main financial beneficiaries.”

Now we all know what happened with PFI don’t we? Turns out that it wasn’t such great value for us at all, we (the public) take all the risk and the private companies take all the profit – still the accountants, lawyers and consultants make their money either way, so it’s easy to see why they would promote a business case for PFI or TIF.

Yes, TIF is not PFI, but the institutions building the business cases are the same and the accountants, consultants and lawyers will no doubt trouser a tidy sum, so take their projections with a pinch of salt and always bear in mind that the public usually bear all the risk.

Vote Retain Union Terrace Gardens.

AV Footnote:

An Aberdeen Voice writer contacted PwC and asked if the firm was comfortable with the way its projections were being used. The Press & Journal printed the large claims in a box called ‘Facts and Figures’.

PwC were asked to confirm:

“…that those are indeed your projections and you stand by them”, and “…these figures appeared in a newspaper recently (Press & Journal,19 January) under a column, ‘facts and figures’. Can you please confirm whether or not PwC thinks its projections should be labelled ‘facts and figures’?”

Did PwC happily confirm the figures were robust and reliable? Not exactly:

“Our work was undertaken on behalf of our client. It would not be appropriate to discuss this with anyone other than our client” was their spokeswoman’s reply.

Aberdeen Against Austerity Responds

Aberdeen City, Articles, Community, Featured, Information, News, Opinion No Responses »

Feb 232012

Aberdeen Against Austerity, a group campaigning against the £140m redevelopment of the historic Union Terrace Gardens, has released the following statement in response to the P&J article headlined, “Police probe attacks on city garden team” of 21 February 2012. The statement is published verbatim as received by Voice with only minor graphical changes made to AAA’s release to comply with Voice’s house style.

These allegations by Mr Smith and as yet unnamed others are strong indeed – e-mail hacking, online bullying and harassment and personal threats are all criminal offences.
We at Aberdeen Against Austerity are not responsible for any of the alleged offences and do not believe any of our fellow Retain Union Terrace Gardens campaigners would stoop so low either.

We are opposed to unlawful tactics being employed by anyone in this important debate over the future of our city, as dirty tricks cheapen both sides’ arguments. However, we worry that the sensational coverage of these criminal allegations in the Press & Journal and Evening Express will serve as a deterrent to ordinary people speaking out, who oppose the City Gardens Development.

The referendum campaign is being fought on a far from level playing field. Six of the seven groups registered against the development are comprised of ordinary citizens (the 7th being the group of Labour City Councillors). By registering as campaign groups we have all been bound by the referendum rules, which allow a maximum spend of £8,524.45, although most groups have no budget at all.

Of the pro-development campaign groups, only three are registered, allowing the vast majority of campaigning to be done outwith the rules, and at huge expense, by PR company The BIG Partnership on behalf of those who propose the City Garden Project. Their Vote for the City Garden campaign has so far included 4-page flyers and newspaper-style brochures to every house in the city, constant radio advertising on all the local stations, a Facebook page manned by full time staff and daily coverage in the local newspapers.

As with any modern debate, much campaigning is being done online and this is where Mr Smith alleges bullying is taking place. Both sides are being equally forthright in their postings on social media, but Aberdeen Against Austerity are certainly not interpreting the strong wording of some of our opponents as bullying or harassment.

We have chosen to rise above any personal slurs and engage in debate based upon facts and we can still have a wee smile at those posts which satirise us and our efforts, because as Aberdonians we retain a sense of humour.

Aberdeen Against Austerity wonders if Sir Ian Wood, who has donated £50m of his own money to the controversial City Gardens Project, will be reporting local comedians Flying Pig Productions to the police for this week’s P&J column The Butter-Fingered Philanthropist.

WhaT IF?

Aberdeen City, Articles, Community, Environment, Information, Opinion No Responses »

Feb 222012

Aberdeen is a city on a downward slide. That makes for uncomfortable reading, doesn’t it? Our gut instinct, being the proud city we are, is to reject this notion out of hand, though deep down we all know it is true, says Graeme Campbell.

The cause of the rot is not easy to identify. Opinions will differ and any debate would most likely be fierce. It is perhaps best to say the gradual slip in the condition of our once grand and glorious city can be pigeon-holed to two vague categories – poor planning and the slow decline of the energy sector.
Or perhaps over-dependence on it? Two and a half pigeon holes then.

So, avoiding any unhelpful debate surrounding the way we arrived at this point, we must as a city look forward to the best possible route to a future of prosperity. We must look for a plan to return grandeur and pride to the Granite City.

Our carefully-selected councillors, together with possibly our most successful loon, Sir Ian Wood and the private partnership Aberdeen City and Shire Economic Futures (ACSEF) think the solution to the gradual slip is a new garden. Not exclusively a garden you understand, but a garden with conferencing facilities and a café. To give all credit due, the plans certainly are impressive and whilst perhaps not so impressive in keeping with the architectural fabric of the city, we are, of course, a city not afraid of change.

In the most recent release posted through all city letterboxes, Aberdonians are directed by a host of interested parties to the key point, “You deserve it!” Well yes, most likely. But oddly, relegated to fifth, is what will be the key point for most Aberdonians. Once again we don’t want to admit this but we’re all thinking it, “We can afford it”.

Will Aberdeen City be pushed to the very brink of bankruptcy by this plan, as happened when the city took the bold decision, so long ago, to construct our now famous Union Street granite mile? Probably not. Of course, Sir Ian’s mammoth oil wealth will go some way to meeting the cost of development on the site – and only on this site, he has been quite clear on that point – the further estimated £100m will come from business rates, council tax – of course – and the heinously-complex Scottish Governmental TIF funding mechanism.

Now nobody wishes to be bored to tears by the inane workings of a TIF, so let’s not worry about that. Instead, let’s find out what other places are using TIF to create.

North Lanarkshire plans to spend £73m to transform the former Ravenscraig steel site, an area of quite unrivalled deprivation, to the benefit of the many people who live in the area.
Argyll and Bute is to extend the North Pier at Oban for £20m, further securing the town’s position as Gateway to the Islands, a major boon to the tourist industry no doubt.
Falkirk plans to use its TIF in a far less grand manner, by bringing about strategic road developments and improving the flood defences. Clearly a sound decision.

But the plans which should be of most interest to any outward-looking Aberdonian comfortably seated in Europe’s oil capital, come from Fife. The council there is to spend its modest £17m TIF improving vehicle and marine access to the already-thriving Energy Park Fife, where renewables are already being constructed. I know, that’s not oil, but it is very real, so let’s not sneer. Not content with this, Fife has also begun construction of the Levenmouth Low Carbon Investment Park which is set to become ‘Scotland’s foremost energy park’.

Whilst in Aberdeen we plan to spend £150m on a garden and café.

Is anyone else embarrassed? Our great city, the economic powerhouse of Scotland, is being distracted by plants and trees whilst other towns are going green in a wholly more financially-sound way. This city has the engineering and science skills, brought by the oil industry and our two modern and diverse universities, to become a world leader in the renewables field.

You don’t need to do the math to know a research and development centre, alongside a manufacturing park would be of significantly greater financial gain to the city than the redevelopment of a garden.

This brings us to the question – has the Council considered this? Understandably, Sir Ian may not be keen, but this is about so much more than the oil empires held by the few; this is about the continuing prosperity of the many.

So, as the ballot papers find their way to you, look around the city. Look for the signs of the rot brought about by poor management by those who, for too long, have only looked inwards – decision makers enjoying the security of the formerly-booming local oil industry.

Consider what the world, given the current environmental and economic climate, would look to Aberdeen for. Horticultural tips? A show in our new 5000-seat outdoor amphitheatre? Or will they look to Europe’s ENERGY Capital to lead the way to a bright new future of renewable energy? And then, as our city leads the world in technological advancement in the renewables field we will look forward to investment, to jobs and to success.

When the ballot paper lands on your doormat, consider what Aberdonians truly deserve and ensure your vote lets our council know just what you want for your future.

TIF – A Message From America

Aberdeen City, Articles, Information, News, Opinion No Responses »

Feb 192012

TIF – doesn’t this American innovation in borrowing just sound fantastic? You get to ‘unlock’ money, re-develop an area, and money comes flooding in. What could be wrong with that? Karin Flavill looks across the pond to the home of the junk bond and bad mortgages, and doesn’t like what she sees.

While arguments rage over the future of Union Terrace Gardens, there’s consensus about one thing. Tax Increment Funding is a somewhat difficult concept to get to grips with. Not because the basic definition is complex.

TIF funds development by borrowing against future business tax gains arising as a consequence of that development. New developments mean new business rates. The local authority keeps a portion of those business rates (from businesses that wouldn’t have moved into the area but for the development) to repay the loan.

The complexity arises in assessing how this mechanism can be applied in a manner that avoids various potential pitfalls. TIF is still very much in the experimental stages in the UK, so we lack a domestic reference point to understand how well the process is likely to work from start to finish.

When business is attracted from one area to another by a TIF funded development, it may be at the expense of another area. This is known as “displacement”. The area benefiting from TIF is pleased to lure business away with its spanking new TIF-funded development. The region losing out wants some protection against financial detriment.

The TIF scheme provides that tax increment coming at the expense of another region can’t be retained by the local authority to make TIF repayments. Like other NDRs, those increments must be sent to Central Government who will pool them with other funds then redistribute the funds equitably among regions.

Rather than being a tool to give cities a competitive edge and win City of Culture status for celebrated developments (the vision currently being promoted in CGP supporters’ referendum campaigns), TIF was first developed in the US as a means of helping regions to improve their most blighted areas. Gradual shifts away from this philosophy, and increasingly creative ways of arguing blight, have led to many states in the US tightening up legislation to prevent TIF from being awarded except where genuine blight is demonstrated.

Chicago is often cited as example of the TIF scheme being misused to benefit the areas that least need it. In August last year, a report was released outlining areas for improvement in the operation of TIF in that city. The report highlighted problems regarding the monitoring of TIF expenditure.

Taxpayers had not been afforded easy access to information that would help them understand the TIF process or to evaluate the performance of the investment. This reduced transparency of the process.

although the initial cost proposed was $224.3 million, ultimately the park cost $482.4 million

The harder it is for the ordinary citizen to understand the TIF process and to evaluate the success of the development it funds, the greater the potential for corruption and abuse of the process by those who do understand it, and who can make it work to their own advantage.

That some will seek and gain an advantage through cronyism is an unfortunate element of life from which no city is immune.

In the 1990s, Chicago Mayor Daley (no relation to Arthur) developed a strong attachment to a project that would come to be known as Millennium Park. A 16-acre landscape situated over an underground parking structure, it was built on top of Railroad tracks in an existing park called Grant Park. The architect involved was Frank Gehry who had won international acclaim for the Guggenheim Museum in Bilbao. The Chicago Tribune enthused that:

“The most celebrated architect in the world may soon have a chance to bring Chicago into the 21st Century”.

The park has certainly won many admirers worldwide and is, in many ways, an excellent model for what the City Garden supporters are hoping that project will become. Properties in the immediate surrounds have become very fashionable and have increased significantly in value.

For others there has been a hefty price tag. For example, although the initial cost proposed was $224.3 million, ultimately the park cost $482.4 million. The park has come at a very high price to Chicago residents in terms of cuts to funding of public services and job cuts that were necessitated by the cost of the park. Salt is rubbed into the wound, on occasion, when the park is closed to the public so that corporate functions may be held there.

During and after the building of the park, Mayor Daley was frequently criticised for alleged cronyism in the awarding of contracts. Other areas of the city continued to deteriorate, while their inhabitants observed the increasing wealth and prosperity of those parts of the city that benefited from TIF funded schemes.
Areas that never suffered from true blight in the first place, but which were a focus of interest for developers, politicians, owners of business premises and others who could make the TIF scheme work for them.

In some ways it’s puzzling that we, supposedly a far more socialist nation than the US, are applying a model of TIF so similar to that model which states in the US have been increasingly trying to move away from by drafting legislation that aims to help TIF function in accordance with its original aims.

There has always been a tendency for conservatives to condemn the poor for their reliance on state sponsored welfare, but in recent years have people started questioning more vigorously the exploitation of taxpayer financed schemes by the some of the biggest players in business (players who have traditionally, but not always accurately, been lauded for their self-sufficiency).

TIF deserves close attention for its potential to increase this problem. Failure to know, or care about, the original philosophy of TIF leaves us less alert to its potential for misuse that could worsen existing inequalities in our society.

The UK version of TIF springs from recommendations in a 2008 report by PWC and Core Group Cities for an alternative method of funding developments in core group cities (the 8 largest regional cities in England). The report is here.

It begins with commentary on the economic successes of the core group cities, and highlights continuing problems relating to unemployment and deprivation in some neighbourhoods. It states an aim to “rejuvenate communities, provide new employment opportunities and stimulate further economic growth.”

Promoters of the CGP dismiss the possibility of serious overspending as scaremongering

The report then discusses the increasing political emphasis on a devolved approach to economic development . A defining aspect of TIF is that it permits local authorities greater autonomy in the matter of funding developments once they have been granted the TIF loan.

For this to happen, they must submit a detailed business plan to the SFT who make recommendations to central government regarding feasibility.

PWC, having been involved in the UK version of TIF from its conception, is ideally positioned to assist local authorities with the preparation and submission of their business plans. Finance and Resources Committee meeting minutes from September 2010 discuss PWC’s remit in preparing a TIF business plan for approval by the SFT. The minutes refer to several important city projects the Council would wish to progress, whether or not the City Garden project went ahead.
See: https://docs.google.com …committees.aberdeencity …pwc+tif+business+plan

“The terms of PWC’s assignment make it clear that they are required to produce a business case that ensures zero financial risk for the Council.”

The Council states that it will make no financial contribution to the City Garden Project. The development must be funded wholly by private contributions and by the TIF loan and completed within the budget.

Promoters of the CGP dismiss the possibility of serious overspending as scaremongering. Chicago’s Millennium Park experience demonstrates, however, how this can and does happen. As a response to such concerns, Sir Ian Wood has pledged an extra £35 million. It’s not clear what will happen if the cost exceeds this.

Despite ACC’s insistence that PWC present a business case involving zero risk to the Council, the draft business case completed in January of this year contains no such promise. It focuses on minimising risk and balancing the risks involved in carrying out the project against the risks involved in doing nothing.

Outlining the need to attract investment and talented professionals to Aberdeen to assure future prosperity, the plan refers particularly to the energy industry. Due to the oil and gas industry being regarded as the primary targets for investment in Aberdeen, and Aberdeen’s existing status as the main centre in Scotland for this industry, PWC anticipate displacement being low (10%). A low anticipated displacement figure is essential for arguing the likely success of a business plan.

PWC appears to anticipate investment by that industry increasing in Aberdeen, alongside the increasing depletion of oil and gas reserves

Work is expected to be completed over a 5 year period beginning this year, with TIF borrowing being carried out in stages (the first draw down taking place in 2014). The proposed development is expected to create approximately 2 million square feet of commercial space and to speed up the development of a further 1.4 million square feet of commercial space.

The CCRS (City Centre Regeneration Scheme) predicts 6,500 new jobs resulting from the development. It should be noted, though, that that figure is a “by 2039” prediction.

The business plan states:

“Oil and gas reserves will run out over time, perhaps 30 years, and Aberdeen is looking ahead. It knows it needs to adapt its industrial base and re-examine how it creates wealth and prosperity. Aberdeen is confident it can do so.”

This project is to be completed in 2017, and its success relies significantly on a very low displacement figure of 10%. In presenting this figure PWC relies on the oil and gas industry, already present in Aberdeen (and therefore not being taken from other areas) being the main sources of increased investment in Aberdeen. Confusingly, PWC appears to anticipate investment by that industry increasing in Aberdeen, alongside the increasing depletion of oil and gas reserves in the North Sea.

Perhaps in anticipation of confusion about this assertion, much is made of the possibilities relating to renewable energy – an industry Aberdeen must embrace and develop expertise in, regardless of Donald Trump’s views. The question is whether developments in other areas area will not only compensate for the steadily diminishing presence of the oil industry, but expand to the point where the business plan can work as anticipated.

Regarding the City Garden proposed as a replacement for UTG, the report comments…

“While there is no direct benefit the fact that the City Gardens Project becomes a reality and underpins the CCRS will benefit Aberdeen’s wider population and business community.”

During a recent BBC Scotland debate, campaigner Mike Shepherd (a geologist with years of experience in, and expert knowledge of, the energy sector) was shouted down and jeered at by pro CGP hecklers. The latter have tended to define opponents of the City Garden Project as tree-huggers and luddites who will be crushed by the wheels of change. UTG has also been described, throughout the debate, as a dangerous area…despite police reports indicating far lower crime levels in UTG than in surrounding street level areas.

The debate has often been an acrimonious one, featuring conflicts of various kinds. Already the TIF pilot scheme in the UK form originally advocated by PWC has brought deep divisions to Aberdeen. It seems set to be promoting a cheerfully unapologetic attitude, amongst some in our community, with regard to social exclusion.

A popularly cited reason for getting rid of UTG is that this will also rid the city centre of people with drug and alcohol related problems. Presumably, relegating them to more blighted areas that would, were TIF being applied in a manner consistent with its original aims, be the areas actually benefiting from this scheme.

Old Susannah No.68 – Untangling The Web

Aberdeen City, Articles, Community, Creative Writing, Environment, Information, Opinion, Satire and Humour No Responses »

Feb 172012

Old Susannah looks at the Granite Web, and the impressive effort it has taken to spin.

By Suzanne Kelly.

Tally Ho! Yet another vibrant and dynamic week in the Granite Web City. Whilst Friends of Union Terrace Gardens, Aberdeen against Austerity, and Democracy Watch engaged in some inexpensive grassroots campaigning by flyer, the mysterious Vote for the CGP group pulled out all the stops and spent, spent, spent.

You could be forgiven for thinking that Northsound is playing City Garden Project commercials non-stop. The Art Gallery has a swish new display showing the Garden plan in its Alice-in-Wonderland perspective and garish colours, and issues of The Granite Web compete in the ugly stakes with the A3 VFTCGP colour flyer sent out before.

News reaches Old Susannah that visitors to Aberdeen Royal Infirmary are being cheered up no end by pro-City Garden Project posters on the walls. There is no escape at work either, as employees of Wood Group (no surprise really), Nautronix, and Taqa all seem to have received lovely e-mails from bosses hinting gently that they should vote for the CGP.

I do find it very touching that employers are looking after their employees so well and giving gentle guidance which puts no pressure on them at all.

Why do I call the VFTCGP members secret? Because I was told in so many words by the BIG Partnership, which does PR for this group and, coincidentally, the artwork for the CGP, that “if the members want to stay secret, it’s up to them.”

But before I return to my Myth-busting busting activities started last week – I only got through the first four of the ten Myths the CGP team say we’re suffering from – condolences to Rangers fans.

Was this one of the top Scottish clubs? Yes.

Will this leave a massive hole in Scottish football? Yes.

Will other sides face similar financial clubs? Looks like it.

I believe one tycoon is still paying some £60,000 of his own money each time his team plays. I do hope this mogul is not getting overly financially stretched. I’d again ask the question if Loirston Loch land – in a Special Area of Conservation – should really be turned into a 21,000 seat football ground with offices and museum in this climate.

Donald’s granny was Scottish. This gives him good cause to call Alex Salmond ‘insane’

Well, I would ask, but the continuous concrete covering of anything green in Aberdeen seems unstoppable. Thankfully, we all have one tireless, gentle campaigner who is not giving up the fight for ‘Scotland’s heritage’. Step forward, Mr Donald Trump.

You might have seen one or two small news items saying that this gentle giant wants to build the galaxy’s greatest golf course on a no-doubt-underused stretch of coastline. He’s got rid of many of the view-blocking trees, but there are horrible plans to build windfarms offshore which could actually be seen by his guests, if you can believe that!

Now, windfarms don’t actually work very efficiently yet. The technology can, and should improve. But I guess we’re all agreed there are few things in life worse than being a rich golfer who might have to look at an offshore wind farm. For those people in favour of this kind of blot on the seascape, I would remind you that you’re forgetting something very important.

Donald’s granny was Scottish. This gives him good cause to call Alex Salmond ‘insane’ for supporting renewable energy. Please try to keep that in mind, thank you.

Finally, it might have been Valentine’s Day this week, but it looks like the May to December romance between Callum McCaig and Aileen ‘Ho’Malone is over. One of them is an over-blown, over-hyped, over-rated, naïve, headline-seeking soul, blissfully unaware that they are dangerously out of their depth. The other is Callum McCaig.

No more will they share a coalition; there will be no more romps on Tullos Hill; there will be no more late-night negotiations. Maybe yet the SNP will change its tune over the ridiculous cull of deer to plant trees that cannot possibly grow on Tullos Hill. Watch this space.

the taxpayers’ side of this great granite garden bargain is to borrow £92m and pay the loan, and its interest, back over decades.

There is certainly a current in that direction, not least fuelled by public anger and the wasting of some £43,800 to date. Still, a break-up is hard to take. Final confirmation of this great bust-up comes in newspaper stories announcing that the coalition is still absolutely fine. I am thinking of offering my condolences to Mrs Robinson, sorry, I mean Aileen.

I’m still thinking on it. PS. Message to Irene – feel better soon!

And now back to debunking the debunking of the Myths. The City Garden Project seems to be the only entity that’s been presented with these Myths, and I commented on the first four last week. Here are a few choice words on the remaining five Myths. Thank you CGP for printing these not-at-all-wild and not-at-all-made-up Myths – we’re all really onside now. Their comments are in bold. Old Susannah’s are in regular type

5. It will cost the taxpayer millions of pounds – FALSE.

Sure. All this happens for free, and you’ve not paid a penny, and you won’t pay a penny. I wonder if the CGP forgot about the £422,000, or probably more, of taxpayers’ money Scottish Enterprise has already spent on this project? And, no doubt, our CGP friends don’t think it matters that some of your city councillors voted to set aside up to £300,000 of your money for legal costs.

Old Susannah is still mulling that one over. A billionaire is ‘giving’ Aberdeen £50m, but there isn’t enough money on his side of the fence to pay the legal costs the city will incur? So, rather than getting granny a new wheelchair, or providing 24/7 care at homes which have just announced cuts etc etc, Wood wants your £300,000. But this £722,000, nearly quarter of a million pounds, is small change. we’re going to chop down existing, healthy trees, thus getting rid of wildlife that’s called the trees home for decades, if not centuries

Multiply that figure by ten and you get close to the amount of interest on the loan Aberdeen City Council has to sign for this project to go ahead, according to one of last night’s radio show speakers. Thanks to Original FM (on 105FM) for hosting last night’s debate. Anyway, the taxpayers’ side of this great granite garden bargain is to borrow £92m and pay the loan, and its interest, back over decades.

If the 6500 new jobs don’t come in and we don’t make £122m each year (I can’t wait to see how this happens), if we go over budget, if anything goes wrong – then it will cost us an unknown additional amount of money in repayments. The trams fiasco has reached a cost of nearly one billion pounds.

But this won’t cost you a cent. Honest, guv.

6. Fake, plastic trees – FALSE.

It’s a great Radiohead song but a lousy Myth. It has been suggested that fake plastic trees will be planted in the City Gardens to act as vents for the giant car park underneath. If any fake trees are seen they will be beside the flying pigs. 186 new trees will be planted, some of them mature and many will be Scots Pines.

Old Susannah doesn’t know where to start with this alleged Myth. She does find it reassuring to find that a job in public relations entails so much creative writing talent. I know of no-one who’s heard of plastic trees being part of the plan. However, if we’re building underground, then we’ll need plants with very tiny root systems. Goodbye 250-year old elm trees, one of only a few surviving clusters of elms free from disease, and home to wildlife. In comes progress. Who needs fresh air, wildlife, shade and beauty when you can have ramps?

we’re going to chop down existing, healthy trees, thus getting rid of wildlife that’s called the trees home for decades, if not centuries

My favourite bit is the announcement that the trees stay in the Gardens forever, as wood chip and seating. Well, you can’t say that’s not sensitive to nature. Still, the BIG Partnership’s student placement has managed to make a meal of a non-existent plastic tree myth. Perhaps someone will explain how mature trees are going to be magically planted in the new Gardens?

Where will their roots go, as there is meant to be underground parking? How do we get to have a thriving pine forest in the city centre – something that doesn’t seem possible according to experts including local architects?

If Old Susannah has this right, we’re going to chop down existing, healthy trees, thus getting rid of wildlife that’s called the trees home for decades, if not centuries, plant some new trees, and have the world’s only pine forest in a city centre.

The pines must grow faster than genetically-modified Leylandii hedges if the drawings I’ve seen are correct, and of course, no-one can fault the accuracy of these precision drawings. I like the giant transparent child romping over the flowerbeds best. So, replacing grass and trees with grass, concrete and trees can be done for only £92m. RESULT!

7. It will cost people their jobs – FALSE.

As a result of the project a projected 6500 new jobs are to be created, not taking into account the hundreds of jobs that will come as a result of the construction. In addition, a transformed city centre will breathe new life across the city, helping us become a World Energy City long after oil and gas has run dry in the North Sea. Existing businesses will be retained meaning existing jobs will be safe-guarded.

These 6500 jobs are going to be wonderful! What will they be? Well, for openers we’ve seen how well Union Square has protected high street businesses. Our small high street shops are struggling whilst multinationals got a cheap rent deal in Union Square. But clearly what we need is….more shops. Surely there is nothing we’d rather do than shop, and you can’t have enough shops can you? It’s not as if a glut of shops will ever result in shop closures, price wars and endless sales, especially ‘Going out of business’ sales.

I wonder if there is any reason that a cafe culture has never really taken off in Aberdeen? Could it be that it’s often too cold, too windy or too rainy? Could it be because the City Council consistently refused to allow anyone to run a snack bar or coffee kiosk in the shelter of Union Terrace Gardens? Clearly not. One wave of the granite wand, and just like those convincing concept drawings, we’ll all be sitting outdoors in short-sleeved shirts, drinking decaf mocha lattes while Toto play on the brand new stage, in front of the existing indoor theatre.

Right. The taxpayer is propping up the AECC with extra money since it can’t make enough by holding events. Same for the Lemon Tree. But the new theatre won’t have any problems making a massive profit and creating loads of jobs.

So, ‘how many theatres should a taxpayer prop up?’ is one question.

I for one can’t wait to sit through an outdoor electronic folk music competition in February. But, by winter, this theatre will be an ice rink, thereby competing with the ice rink the city tried to kill off before.

But no, there won’t be any harm to jobs. We’ll need people to cut down the trees and get rid of the wildlife. Then there will be jobs cleaning the graffiti off the Web. Yes, the Web will create more permanent jobs in small Aberdeen than the 2012 Olympics will create in Greater London. Rest as assured as I am on that point.

8. It will be entirely made from concrete – FALSE.

Obviously concrete will be used – would you like to relax, visit an exhibition or attend a concert on top of a cardboard box? The project has been carefully designed so there will be 95% more open, green space with a series of pathways providing access for people through, across and in and out of the gardens. These paths will be made of granite, crushed granite and wood.

By now, Old Susannah is finding the content of the dispelled Myths by BIG just a little bit patronising and smarmy. They thought they had to talk us out of believing in plastic trees. Now they explain that we need to sit on something more robust than a cardboard box. Thanks for that! Appreciated.

So, ‘how many theatres should a taxpayer prop up?’ is one question. ‘How many competing businesses should Scottish Enterprise suggest?’ is quite another. They used to have rules on displacement and suchlike, but these seem to have gone, probably about the same time as your employer started to tell you how to vote.

This project has been carefully designed. Of course it has. More green space, but somehow it manages to have a giant concrete, sorry, granite theatre which takes up some 15% minimum of the existing Gardens. They count the giant granite potato-crisp shaped thingy over the stage as green space.

what if the architects were to give us some drawings showing how these ramps will work safely now rather than later?

Of course it won’t sustain any wildlife, and at best will be a thin wedge of sod over concrete, but if they want to call it green space, fine.

I guess these people call anything green space if they can colour it green with Crayolas on their paper plan.

Looking at the slope of the ramps both up and downwards, I’m wondering how the aged, infirm or wheelchair-bound are going to find this system easier than the current access. The current access could use an additional ramp and you could probably do this for less than £92m as well. For the truly baffled, there is ground level access on the north side, not far from the theatre. This is where vehicles somehow manage to get in.

Clearly there is no other way to ‘relax and visit an exhibition or attend a concert in this town.’ Let’s borrow £92 million and build this beauty.

9. There will be no railings in the Granite Web, people will fall from the paths – FALSE.

Safety will be paramount. The concept design shows the various walkways at different levels but the final design will show how these work safely. And, seriously, do you think any development in a country obsessed with health and safety would get off the ground without proper safety measures?

Our PR work placement is patronising us again. I might be old, but here’s a crazy idea – what if the architects were to give us some drawings showing how these ramps will work safely now rather than later? Are they going to be enclosed, and of course, not at all potential rat traps? Are they going to have fencing that somehow won’t look like Stalag 17? How will wheelchair users go up and down these steep ramps? Details, details.

Well, Old Susannah has run out of space for one week. We will return to normal definitions next week, and take a closer look at who is behind ‘Vote for the City Garden Project’. You will, of course, want to know what businesses are in this group, to make sure you can reward them with your custom. Or not.

Finally, many thanks to those brave business people who have stuck out their necks in favour of saving our city’s only unique, free, green garden.

That’s you, J Milne. It is appreciated.

Older Entries