Following from my my response to the news that Cambridge City Council is owed £618,000 by SecureTicket UK Ltd., the company it engaged to sell Folk Festival tickets online and the questions which I asked about this money on the 8th of January, another opportunity to ask questions arose last week.
At Cambridge City Council’s Community Services Scrutiny Committee on the 15th of January 2009 I, another member of the public, and opposition councillors asked questions about the money owed to the city. The other member of the public, an ex-councillor from Cherry Hinton, asked:
- “Are we going to get our money back?”
- “Who in the council looked into the company, and what did they find? Did they write anything down, in a report or an email and can we see it?”
- What is going to happen to the people responsible?”.
Despite having seven public questions on her areas of responsibility executive councillor Julie Smith, did not attend the beginning of the meeting when the public questions were taken. Members of the public were given the option of waiting a couple of hours for her to attend, or putting their questions there and then but only getting a response from officers. I think this could have been handled a lot better, as clearly it was known in advance that Cllr Smith was planning to attend only for certain agenda items her estimated time of arrival could have been included on the agenda, and a later public question time in her presence scheduled.
In the absence of Cllr Smith the council’s Head of Legal Services, Simon Pugh, responded. He said that SecureTicket UK Ltd’s failure to pay the council the money it had taken for Folk Festival tickets was a “tremendous disappointment” and said that while the money was supposed to be placed in a client account “that had turned out not to be the case”.
It was reported that SecureTicket UK Ltd. had entered voluntary liquidation in advance of the City Council’s petition to wind up the company which was due to be heard in the high court on the 21st of January 2009. The London Gazette is reporting that a creditors meeting is being held the premises of Tenon Recovery in Watford on the 19th of January 2009. What this step might well mean is that assets will be extracted from the company and returned to investors and the parent company before what Cambridge City Council is owed is considered.
Mr Pugh stated that the council needed to look at what happened, and said “an external body will make recommendations”, he gave an assurance that the council would: “aim to be as open as possible”.
Later, in the presence of Cllr Smith, the meeting returned to the subject of the Folk Festival ticket money. Cllr Blencowe pointed out that he had asked in November for an update on how things were going with respect to the Folk Festival’s finances and there was no mention of a problem. He said that failing to keep opposition councillors like him informed, even on a confidential basis if necessary made it impossible for them to carry out their role of scrutinising decisions taken by executive councillors. He said he was sure the problem was known about by officers at the time he asked his question in November.
Cllr Smith spoke, not to directly answer Cllr Blencowe’s point, but to talk about scrutiny of the decision for 2009 online ticket sales, on which decisions still have to be made. Officers are looking at the possibilities she said, and proposed either a “discussion meeting” or an extraordinary meeting of the Community Services Scrutiny Committee. It has previously been proposed that the council’s new in-house online ticket selling facilities at the Corn Exchange could be used, though that will depend on if they are ready in time.
The Head of Legal Services, Mr Pugh, addressed Cllr Blencowe’s questions, he said that it was not possible to discuss the position prior to the public statement which was made in January. The council was being told that the company was in the process of being refinanced, and any public statement by the council might have undermined those efforts. Cllr Blencowe maintained his position saying: “someone ought to have said, at least in confidential session, that there was a problem”.
I then got an opportunity to put some questions to Cllr Smith. Having started by noting that the other public questioners had made their contributions before Julie Smith arrived and suggesting the meeting could have been better organised, I went on to say:
I tried to ask some questions on the council’s loss of £618K of folk festival ticket money at last week’s West/Central area committee, but was told that while the Executive councillor will be held to account, then wasn’t the time. Is now the time?
Cllr Smith made a statement to the West / Central Area committee saying the council had been the victim of fraud. Has she, or the council got evidence of that? If so have the police been called in and are they pursuing enquiries, is that a possible route for the city to get its money back?
If there has been fraud that makes some of the questions I asked last week more relevant. I noted the council’s statement states it is taking legal action against SecureTicket UK. Is the council also taking steps to obtain the money it is owed from SecureTicket’s parent company Telsecure? The parent company might have greater assets and be better placed to reimburse the Council. If there is fraud then that route ought now be open.
This might be more important now following what we learnt earlier in the meeting, that the SecureTicket UK is in voluntary liquidation as that route might enable those running the company to remove assets form SecureTicket UK and return funds to investors and the parent company.
Why don’t the papers for this meeting, where folk festival matters are to be discussed, or the Strategy and Resources Committee where the council’s future budgets are to be discussed make any mention of this money which is owed to the council?
According to the leader of the council’s interview with efestivals.co.uk an elected councillor did not make the decision to use this company, the decision made by a junior official? Did whoever made the decision ensure the background of the company was investigated?
Are the council’s contracts only with SecureTicket UK or are other members of the group of related companies also parties? The council leader’s statement in the news release suggested the council had only ever had contracts with SecureTicket UK, is that true?
Were those deciding to use this company aware Cambridge City Council appear to have been one of SecureTicket UK’s first three customers?
Were those deciding to use SecureTicketUK aware it was previously dormant and had another name, following its reincarnation as SecureTicket UK it came out of dormancy and very shortly after that started taking the money for the Cambridge Folk Festival.
I was cut off at a couple of points by the meeting’s chair as she ruled that members of the public were not allowed to put questions again which had already been put, even though they had previously been put in the absence of the executive councillor responsible.
Cllr Smith started her reply to my questions on the ticket money by saying what she had said in her statement to the West/Central Area committee was that the council had not been paid, the money was supposed to have gone into a separate client account, and we may have been a victim of fraud.
Cllr Smith said that there is a police enquiry underway. She re-iterated what the council officer, and previously the council leader in his statement had said about there being an external enquiry. I think the fact there is a police enquiry is a new and substantive development, and that it might prove to be the route via which Cambridge City Council obtains some of its money back.
Mr Pugh spoke to say that all reasonable routes for recovering the council’s money were being followed. He hinted at “other outcomes”, but gave no indication what those might be, perhaps he might have been considering the council taking assets (the company’s technology) in lieu of cash, or even thinking in terms of where the police investigation might lead.