Last week Lib Dem councillor Owen Temple (Consett) challenged the Council on a deal it is currently cooking up to re-finance £43 million still owing on three school buildings, here I have added some of his comments to my blog, as it is quite clear that once again we have a financial debacle at County Hall set to cost the taxpayer a fortune:

“Durham will have to pay eye-watering early redemption penalties of around £12 million to the banks to refinance the deal. That’s not a misprint. It’s not a mis-placed decimal point. It’s really £12 million. And despite that the county council still expects to save money on the new deal!

That begs the question. What sort of lousy deal was it that allowed the council (which says it is “common for this debt to be refinanced”) to be so badly stitched up that this common practice has turned out to be an ultra-expensive practice? What sort of a deal was it that allowed the county’s finance “partners” (who put the deal together) to write into the contract their share in any additional profit if they were subsequently to arrange a replacement deal?

An appalling deal in my view, and what adds insult to the injury is that now we’re paying lawyers and accountants at least another £68,000 to check out whether we should indeed hand this windfall to the banks and financiers.

I accept that this refinancing may be the right thing to do now because it may still save the council some small amount of money over the next twenty years. I’m pleased that the county’s political leadership agreed to the issue being discussed in public rather than behind closed doors. But I’m convinced that the complacency which I heard at cabinet this morning, the same complacency which allowed this deal to happen in the first place, remains a real threat to the financial well-being of County Durham.

If you want to read the report in full, you can find it here.“

Spot on Owen – once again it seems that Labour councillors may have been sleeping on the job to allow such a deal. The amount of waste at Durham County Council appears to have no upper limit!