Leaders not very good at business

When a situation is described as a “win-win”, I tend to scrutinise it more carefully. There are deals in which all stakeholders do benefit, but these are rarer than one would like.

When the council set up its solar panels scheme Empower Community Management, there was a widespread belief that it would be a win-win situation: individuals would get cleaner energy. The environment would be helped via lower carbon emissions. A thriving social enterprise would be developed. Furthermore, the council would make money via loaning Empower £23 million.

As has been reported in this newspaper, it hasn’t worked out quite like that.

Empower and the deal have collapsed. While the Conservative administration claims that taxpayers have been protected, it’s difficult to see what that precisely means. We loaned £23 million for which we will not get the promised return of capital. Empower couldn’t find a buyer, the loan couldn’t be extended. We, the taxpayers have been left with a bunch of solar panels and loan which is now not an asset but a liability. There is a claim of a £4.4 million profit so far, but if you ran a business, you would look at your balance sheet for the entire year, not just for a quarter. The council may try to run the scheme itself. While there are many talented people on the council, it may very well be that the skillset required is beyond their expertise. Then what do we do?

When people voted Conservative, I assume that some did so out of a belief that being focused on money meant that they would be good at handling it. We now have plenty of evidence to the contrary: this is not the first scheme that has ended up costing the taxpayer. Let’s consider the collapse of the Vivacity contract. All of Cambridgeshire was witness to what happened to the UnitingCare partnership, which was commissioned to deliver health services. All these options were presented as win-win situations, alongside a few others which have collectively cost us many millions. What has happened to Empower Community Management is unlikely to be the last such scheme to come up short. Meanwhile the taxpayers, who are working hard in their shops, offices and factories are expected to foot the bill for these mistakes.

If we looked at the council as a business, its plans, its ability to execute upon them, the management board (the Conservative group) and their return on investment, we would have to conclude that they are in trouble. They do not apparently have a strong sense of what constitutes good business, what schemes will be profitable, which should be done in-house as a public service. Sometimes the wrong ledger is used: perhaps the right way to deploy solar panels was on a not-for-profit basis. After all, we all reap the benefit of cleaner air and a planet not devastated by climate change. Perhaps it’s not reasonable to expect profit out of health, whose focus should be more on saving lives than pounds or pence. Perhaps we should be thinking about drawing clear distinctions about what public service is and what it is not. Then we might have a rational calculus which will secure our city’s future.