Council report and expert advice re 2008 “cash shuffle” proposal between Liverpool Direct Limited and BT

MR ALEX A SMITH made this Freedom of Information request to Liverpool City Council

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Dear Liverpool City Council,

The Daily Post reported the following in March of 2008 (David Bartlett, ‘How BT has stepped in to help fund Plan B; free up £20m for 08’, Daily Post, March 1, 2008, page 5):

“LIVERPOOL council has been forced to turn to one of its private sector partners to help create a Plan B to fill the £20m hole in Capital of Culture finances.

“Liverpool Direct Limited, a joint venture with BT set up in 2001, has agreed ... to help the council juggle money between accounts to free up £8m. ...

“The £8m cash shuffle with LDL involves the council paying £8m to LDL for capital investment works not previously charged to the authority. In return, LDL has agreed to pay the council £8m for accommodation and other services which was also previously not charged for.

“This effectively transfers £8m from the council's capital account - which is only allowed to be spent on investments - to its revenue account which is for everyday spending and can be used for Capital of Culture.

“District Auditor Tim Watkinson has already raised concerns due to the unusual nature of the transaction, and the council is currently taking external advice on whether the transaction complies with accountancy rules. ...

“A council report warns that the council risks ‘further undermining its low financial standing’ in pursuing the Plan B for funding the showcase year.”

I have two questions, below, regarding the issues discussed in the above Daily Post article.

1. The article reported that Liverpool City Council was “taking external advice on whether the [proposed LDL/BT ‘cash shuffle’] transaction complies with accountancy rules.” If possible, could I please have a copy of this advice?

2. The article cites a Liverpool City Council report which warned that the “cash shuffle” proposal between LDL and BT risked “further undermining” Liverpool City Council’s “low financial standing”. If possible, could I please have a copy of this report?

Thank you.

Yours faithfully,

Alex Smith

Liverpool City Council

 
Dear A SMITH
 
Freedom of Information Act 2000
 
Thank you for your request for information that was received on 4 January
2020 concerning Dear Liverpool City Council,

The Daily Post reported the following in March of 2008 (David Bartlett,
'How BT has stepped in to help fund Plan B; free up £20m for 08', Daily
Post, March 1, 2008, page 5):

'LIVERPOOL council has been forced to turn to one of its private sector
partners to help create a Plan B to fill the £20m hole in Capital of
Culture finances.

'Liverpool Direct Limited, a joint venture with BT set up in 2001, has
agreed ... to help the council juggle money between accounts to free up
£8m. ...

'The £8m cash shuffle with LDL involves the council paying £8m to LDL for
capital investment works not previously charged to the authority. In
return, LDL has agreed to pay the council £8m for accommodation and other
services which was also previously not charged for.

'This effectively transfers £8m from the council's capital account - which
is only allowed to be spent on investments - to its revenue account which
is for everyday spending and can be used for Capital of Culture.

'District Auditor Tim Watkinson has already raised concerns due to the
unusual nature of the transaction, and the council is currently taking
external advice on whether the transaction complies with accountancy
rules. ...

'A council report warns that the council risks 'further undermining its
low financial standing' in pursuing the Plan B for funding the showcase
year.'

I have two questions, below, regarding the issues discussed in the above
Daily Post article.

1. The article reported that Liverpool City Council was 'taking external
advice on whether the [proposed LDL/BT 'cash shuffle'] transaction
complies with accountancy rules.' If possible, could I please have a copy
of this advice?

2. The article cites a Liverpool City Council report which warned that the
'cash shuffle' proposal between LDL and BT risked 'further undermining'
Liverpool City Council's 'low financial standing'. If possible, could I
please have a copy of this report?

Thank you.

Yours faithfully,

Alex Smith...
 
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Information Team
Liverpool City Council
 
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Dear Mr Smith

 

Please see attached our response to your information request as submitted
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