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Company Formation

Blackpool Fylde and Wyre Economic Development CompanyGiven the date of this piece (April 1), our readers would be forgiven for thinking its a joke. It isn't.

On Monday, Wyre Council considered becoming members of the EDC.

Although the minutes are not yet published, (and won't be until after Easter), we are told Wyre Council approved the report.

What on earth is the EDC we hear you ask?  Well..., its Sunday initials are an even bigger mouthful - BFWEDC - it's the Blackpool Fylde and Wyre Economic Development Company (and it's a limited company).

Sadly, (once again for those of us with long memories), Local Government seems to think it ought to pretend to be a business. Quite why it can't be what it's supposed to be, i.e. good, effective local government, is beyond us. But every so often, an adolescent need to display civic testosterone breaks out in town halls, and you find Councils trying to ape businesses.

The latest idea follows on from the 'Multi Area Agreement' signed by the so called 'Leaders' of each Council recently. As part of that scheme, it was agreed that the four parties to that agreement should form an Economic Development Company.

So far as we know, Wyre is the first of the 'new entrants' to formally consider membership. But we can be sure that, coming soon to a Council here in Fylde, will be exactly the same decision.

In fact, we hear it might be an as yet unannounced special meeting of Fylde's Cabinet in the next fortnight or so that will consider and take the decision rather than have a meeting of the full Council as Wyre chose to do.

To help Wyre's Councillors understand what was going on, the County Council engaged Eversheds Solicitors to produce a 'Guidance Note' to help make clear the 'constitutional position'.

So we thought we'd have a look, in anticipation of it being reported to Fylde.

For our civic anorak readers, (and for as long as they leave it there) the full report is on Wyre BC's Website but we've done the edited highlights for our more normal readers below.

According to the Wyre report, the key role of the EDC is to provide Strategic Leadership, to act as Project Manager for the Company's (yet to be agreed) 'Business Plan' and to act as a "Dealmaker and Broker" to get regional and national funding (as if there was any left to have!) to deliver projects.

But the Company doesn't intend to actually deliver the projects itself. (Even though its rules say it could). For the most part, they expect that both project delivery, and the financial risks will be carried by the constituent Councils.

Regular readers will guess that we're not overly impressed with this sort of idea. We oppose it on several levels.

Firstly, we oppose anything that takes us even a step closer to a single administrative unit like the 'City of the Fylde' (and in those terms, this is a giant leap).

Secondly we don't approve of the idea of getting into bed with Blackpool at all.

We had enough of their style of operation in last week's meeting on Marton Moss. And whatever we might say about our own Commissar and his style, he's not yet been found taking brown envelope bungs (and returning them when a fuss was made) so far as we're aware.

But more practically, the graphic at the top of this column is from LCC's Lancashire's Strengths and Weaknesses showing the change in employee jobs from 1999 to 2008.

Blackpool has lost 5.8% of its jobs. Fylde jobs have increased by 12.7% and Wyre jobs are up 22.8%.

This puts a whole new meaning on the "Blackpool Travel to work area" doesn't it?

We have previously shown that the social, economic and cultural profiles of the two communities are very different. (See the Multi Area Agreement section of Council Agenda - June 2009) and that merging them will produce completely contradictory and mixed messages.

Imagine a hotel called the "Fylde Coast Hotel" it advertises itself for midweek breaks to the upmarket, 50+, green-wellie-and-brogues brigade. It also advertises its weekend breaks for Stag and Hen Party nights and family fun weekends.

Now imagine being an advertising agency given the job of designing the brochures and the advertising to sell these packages.

Mission impossible.

We've actually seen Blackpool hotels that have tried to do this, and failed miserably. As soon as one customer profile sees an advert for the "wrong" profile, the idea of booking at the Fylde Coast Hotel is dropped like a hot brick - by BOTH its target markets.

The culture, and the customer profile certainly of Blackpool vs Fylde and Blackpool vs Wyre are, likewise, wholly incompatible, and any attempt to cross-market or even cross-advertise across this boundary is doomed to failure before it starts.

And no. In a situation like this, diversity is not a strength any more than Gucci would think it a brand strengthening move to have 'B&M Bargains' as one of its retail outlets.

So, in a diverse and enlarged area, we think the idea of co-habiting for economic development, where tourism is the most important, industry is, frankly, stupid.

Thirdly, we say that the idea represents a way of decreasing accountability and transparency. A company will be more able to hide its financial dealings from public scrutiny. It will also make it even more difficult for elected Councillors to find out what's going on. It means that decisions affecting all fylde's taxpayers will be taken by even less of Fylde's councillors, and that's likely to be bad for us.

An example of the problems caused by diluted accountability (albeit on a much smaller scale) was the secretive Town Centre Forum - or whatever it was called - that operated in St Annes few years ago. That actively prevented some elected councillors attending its meetings as it sought to bring together business and Council officers to work in partnership.

What happened was that commercial representatives with loud voices bullied the group into installing plastic palm trees on St Annes Promenade (until, thankfully, God intervened with strong winds).

Decisions taken behind closed doors by select groups are bad for democracy, and often inherently bad anyway.

Fourthly, there's another good reason for the Councils not working too closely together, and it's this. In Fylde we have counterbalance. In Blackpool we have Phil the one, and in Wyre we have Thomas' Weind in the Garstang Courier (Sadly - and foolishly - TW isn't published in the online edition of the Courier) all performing a similar role. Just imagine what will happen when those three combine their efforts under a combined 'Fylde Coast Authority'

So back to the main part of the plot..... What was the nitty gritty of the agreement that Wyre considered, and that Fylde will be up for considering soon?

Well, first off, they plan to use the former Blackpool Urban Regeneration Company "Re Blackpool" as the basis, the 'vehicle' (as they call it) for the new company, and this will simply change its name to "Blackpool Fylde and Wyre Economic Development Company Limited".

The current members of 'ReBlackpool' are Blackpool Council, and the North West Development Agency (a bloated QUANGO that disperses government tax revenues in the north west). NWDA will resign, and Wyre BC, Fylde BC and Lancashire County Council will be appointed as members.

The assets and liabilities of the 'old' ReBlackpool are being investigated at present, and it's 'expected' that the former company and Blackpool Council will provide 'warranties' to the new members if necessary.

Once they sign up, each Council is committed to an initial three year membership.

Given that there will be Borough elections next year, this means that even the new (future) Council will be held to membership.

This is unusual.

Councils generally accept that their actions cannot - and should not - bind future Councils, but this agreement seeks to do just that.

After three years, members must give at least one year's advance notice if they want to leave, and even then, they must continue to provide any funding they committed to before they resigned.

The Company will be a separate legal entity from the constituent councils, and the Councils won't be liable for any of its obligations or liabilities except for the Guarantees they give (as yet the guarantees required are not set out, so that's a bit of a worry).

That said, it is believed that member Councils will give guarantees and indemnities to each other on a project by project basis, so maybe this isn't too important.

So far as the 'new' Company is concerned, each Council will formally guarantee the Company's liabilities up to £1 (So that's not too bad then, we can even afford to trust Dim Tim if the liability risk is only going to be £1).

The new Company doesn't expect to employ its own staff (Though we heard that the two top people from Re Blackpool were being taken on as directors or whatever of the new company, and Blackpool Council would continue to pay them - for the time being at least)

As Doug Garrett, chief executive of ReBlackpool, (And readers should note his terminological inexactitude - or slip of the tongue here - where he's probably calling it what it will become, the Fylde Coast Economic Development Partnership) told Susie Sell of Regen.net as long ago as last November when he said.....  the FCEDC was being set up to oversee the Fylde coast multi-area agreement, a cross-boundary funding deal signed earlier this year by Blackpool Council, Fylde Borough Council, Wyre Borough Council and Lancashire County Council.

He said: "This change comes about with the signing of the MAA, and the [new] delivery body has been established to cover the wider Fylde geography.

"The entire ReBlackpool programme will be run through the economic development company, and ReBlackpool's programme of activity will be unaffected."

So, ReBlackpool/BFWEDC's role in looking after the Tower and the Winter Gardens, and the Talbot Gateway and the Central Gateway and the South Shore Regeneration and the headlands and the volleyball camps aren't going divert any attention from the needs of Fylde and Wyre?

Tell that to the Marines.

Does this at all begin to sound like a take-over by Blackpool Dear Reader?

Does it begin to feel as though we're going to be sucked in, bled dry, and spat out again?

Well, watch who else is getting in on the act.

Each of the member Councils, together with the North West Development Agency (who - as our sharper readers will have noticed - has only just resigned from its former Re Blackpool position), and the Homes and Communities Agency (who suddenly appear out of nowhere but might have some dosh to dish out for new social housing) will have the right to appoint one director to the Board of the Company and to change them whenever they like.

The Board can then appoint up to another 9 ordinary directors by unanimous consent. These folk will be appointed for a fixed term (subject to a 4 year Maximum), and re-appointment needs to be a unanimous vote as well.

So there we have the mechanism set in place ready to dilute the control that individual councils have, and that the electorate has in them.

There will be a board of up to fifteen, with each of the four councils only being sure of one place each.

The Chief Executive and Chairman of the new company will be appointed by unanimous vote of the Board once it is formed, but the conditions of service will (surprise, surprise) be allied to those of the "interim Chief Executive and Chairman" (ie the top two former ReBlackpool people we referred to earlier).

Did someone say "Shoe-in"?

The Company will have a 'Business Plan' which is made up of an 'investment plan' and a 'budget' to cover a three year period (It's not clear whether this will be a rolling budget (i e always three years rolling forward) or whether it will be three years initially, then annual thereafter).

Once set, the Business Plan can only be amended by a unanimous vote of the - and at this point the report is woolly - it's not clear whether it is a vote of the 'members' (ie the four councils) or the Board (ie up to fifteen board members)

The report to Wyre does suggest that the budget is an annual thing, but with a three year investment and business plan, we don't exactly see how that will work.

The Board will deliver the Business Plan, but they "might" delegate this to a 'Management Team' and form 'Committees' for specific purposes (the report to Wyre suggests these might be a Human Resources Committee, Finance and Audit Committee and so on).

All of these  terms are set out in the 'Definitions' section of the Company formation documents so it's pretty much a no-brainer that these are not, as the report suggests, ideas or possibilities. They have already been agreed behind closed doors.

What you see here is the basis of a council-in-the-making of course.

And once appointed, people on the Management Team can only be removed by the unanimous vote of the Members - (again the report is unclear whether 'members' in this regard are the four Council members in unanimous vote, or the fifteen board members in unanimous vote).

Some specific matters are also to be reserved for the ominous, sorry unanimous, vote of Members (amending the Business Plan, agreeing the Standing Orders, financial rules, regulations and policies of the Company, deciding when and whether to have Procurement Standing Orders, and authorising expenditure - well, at least until the board has adopted some Financial Regulations, after which the implication is the board will not be required to authorise what the Management Team spends)

If there are disputes, they will first try to resolve them by discussion, then try to get the Council Leaders to agree what to do to solve the problem, followed, if necessary by (presumably external) mediation.

Unsurprisingly, Wyre's report is light on how much all this is going to cost us (over and above what we already pay of course). The actual words in the report are "We understand that the details of the funding streams are to be finalised, but it is anticipated that NWDA and Blackpool will continue to provide funding in the interim period after completion"

So now we wait with baited breath to see when the Commissar and his hand-picked team will 'debate' the matter, before deciding that the party political advantages of turning the whole of the fylde plain blue are a no-brainer in comparison with dumping a City of the Fylde on its unsuspecting residents.

Actually it isn't going to be called the City of the Fylde, its real name - as we have predicted for several months now, and as Doug Garrett let slip in his interview - will be the "Fylde Coast Authority"

You read that first on counterbalance.

Dated:  1 April 2010


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