More PFI Nonsense from Sandwell's "Socialists".

In an earlier post I blogged about the grotesque amount of money being spent by  Labour Sandwell Council (SMBC) with Interserve, Barclays Bank and related companies and this post deals with an earlier scheme for five schools. Whilst not (apparently) on the same scale as the Sandwell Futures/Interserve scandal it must be noted that these payments MUST be made by SMBC as a matter of law for the next 20 to 30 YEARS. They come straight out of the annual budget regardless of anything else and leave less in the pot for vital frontline services. The only difference is that Sandwell's alleged "socialists" CAN cut frontline services but they can't cut these massive PFI payments.

In 2003 SMBC entered into a PFI deal to "design, build,finance and operate five replacement schools". All this was long before SMBC were forced to show payments made each month over £500 and so I cannot tell you the multi-million pound cost of the construction etc. It also seems that this earlier scheme was different from the Interserve nonsense in that I have not been able to trace any direct involvement in the scheme by SMBC (whereas they have a shareholding in the crap Interserve PFI via Sandwell Futures Limited).

It seems that ALL the payments going out from this scheme are to just one company - Total School Solutions (Sandwell) Limited. It is possible that there are some payments under £500 too but from the publicly-available figures SMBC paid them:

12 months Apr 2012 - Mar 2013 - just £2,086,573.97p (over £400,000 per school per annum);

9 months Apr 2013 - Dec 2013 - just £1,389,149.32.

There is a curious thing here in that the payments follow odd patterns - some months there are payments and none in others. There were no payments at all from the beginning of December 2012 until May, 2013. I have no idea why that should be and don't expect SMBC to tell the taxpayer but it seems a very odd arrangement. Further, the accounting year for Total Schools also now ends - like the Council's - on 31st March. The last available accounts to 31st March, 2013 show "sales" ie turnover of only £1,285,00 whereas you will see from the above that SMBC definitely paid them over £2 million. (I have the exact dates and they are on the website for all to see).

As with all this PFI nonsense there is a whole web of companies moving money about - presumably to avoid paying any tax. These are just some of the companies involved in this rubbish:

1.  The original Total School Solutions (Sandwell) Limited was a wholly-owned subsidiary of Total School Solutions (Sandwell) Holdings Limited (see below) which was a joint venture between Vinci (Holdings) Limited (a subsidiary of Vinci Plc) and PF Schools (Sandwell) Limited (a subsidiary of Pell Frischmann Group Limited.

2.  It does appear that even the companies involved occasionally get confused since the accounts of TSS (Sandwell) Ltd say that Vinci (Holdings) Limited sold out its shareholding in 2007 whereas SMBC refer to the seller as Vinci Investments Limited. The sale was said to be to SMIF UK Limited (acting as the General Partner of Secondary Market Infrastructure Fund UK LP).

3.  But what is this? Despite what is said in 1 above the 2013 TSS Holdings accounts say the original parties were the aforementioned PF Schools (Sandwell) Limited but not Vinci - a new company pops up - Norwich Infrastructure 4 Limited. This may be an error since it seems that Vinci were the original construction company and Norwich came in later.

4.  There is an hilarious document from 2007 when Vinci Investments Limited wanted to sell out. They thought they needed SMBC's consent but SMBC thought they didn't but gave it anyway! Needless to say that in the secret state of Sandwell the document is heavily redacted so that the voter cannot see what is happening! As above, it appears that the sale was to SMIF UK Limited but another company Semperian PPP Investment Partners No 2 Limited also comes into the reckoning but they sold out in 2013 to the aforementioned Norwich Infrastructure which itself is owned jointly by Foresight VCT Plc and Foresight2 VCT Plc.

I am not an accountant and when I first saw the accounts of TSS (Sandwell) Limited my heart leapt! All that money SMBC was paying them gave rise to taxation of £88,000 but oh dear, the Notes to the accounts refer to this as "deferred taxation" and by happy chance this was reduced for the last year to,er, ZERO by utilisation of losses,"other tax adjustments" etc.

A Short Quiz

In this smoke and mirrors world, TSS (Sandwell) Holdings Limited is purely a vehicle for collecting interest payments and income from fixed assets. In the last two financial years the interest receivable was £306,000 and £231,000. Now guess how much disappeared in "Interest payable and similar charges"? Go on, have a go? No prizes, I am afraid if you guessed, er, £306,000 and £231,000! Nevertheless, due to the other income there was a potential corporation tax charge of £30,000 but, of course, this is offset by the "effects of group income". Now guess the actual tax payable? Yes, you got it - ZERO!

Incidentally, I believe that Semperian referred to above are registered in Jersey.

As I write, the joke "leader" of SMBC, Cooper, has been on TV talking about dog shit. Apparently SMBC issued 80 x £75 dog shit fines last year (although he didn't say how many were actually PAID). He can go on tele to boast about potential income of £6,000 when pouring multi-million pound sums into these horrendous PFI deals!

I don't know what it is but to quote "Mr Leigh Gull", "socialism it ain't".

And finally, if you still do not feel that SMBC have thoroughly shafted you, the original name of Total School Solutions (Sandwell) Holdings Limited was, I kid you not, PEOPLEUPPER LIMITED!



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