Friday 20 January 2012

Ammanford: The Old Bill gets a very big bill

Recently the chief constable of Dyfed Powys Police, Ian Arundale, popped into Carmarthenshire County Council to ask for a 5% rise in the police precept. Since the precept is set by the Police Authority, he was politely telling councillors rather than asking them for an increase, but buried in his long tale of doom and gloom about budget pressures and spending cuts was one of the most extraordinary revelations of greed, incompetence and bungling ever heard in County Hall. And that's saying something.

Yes, we are talking about Ammanford Police Station, built at a cost believed to be £2.5m and opened in 2001.

I say "believed to be" because as usual there is a distinct lack of transparency.

The station was built out of town on a 30-year lease under a PFI scheme, which we are now told (here) may end up costing the police force £15 million. As "Anon2" has pointed out in my account of the chief constable's presentation (here), the numbers are all very vague, and the actual cost could even be significantly higher than £15 million. According to Mr Arundale, payments in the current year will be in the region of £700,000 and are rising.

Currently the station is open during the day, but not at night, and is closed at weekends. Some 60% of the building is empty and unused.

The contract to build the station went to local builders and entrepreneurs T Richard Jones, trading as TRJ Limited. TRJ Limited is one of a number of privately owned companies controlled by the Jones family, which include the bizarrely named "Dolef Cyfyngedig" (which translates as "Cry Limited"). Dolef is the company which leases the station to the police.

As usual, it seems that all of the people involved in awarding the contract have since departed from the scene, including Chief Constable Terry Grange, who retired suddenly in 2007 following an investigation by the Independent Police Complaints Commission into financial and other irregularities. By resigning, Mr Grange escaped disciplinary proceedings and kept his pension. Mr Grange, who had been assistant chief constable, took over from his predecessor, Ray White, in March 2000, when presumably negotiations with TRJ were well advanced.

The current chief constable told councillors that he was hoping to enter into discussions with the TRJ group to see if anything could be done about the PFI agreement. Well, there's always hope. In the meantime, he has begun discussions with the county council to see what scope there may be for sharing part of the council's vast holdings of office space.

Since the TRJ group also does a great deal of business with the county council, perhaps the chief executive could play an even more constructive role by making it clear to TRJ that the group will not get any more council business until it sorts out the Ammanford fiasco.

And who knows, the Wales Audit Office might even get off its backside and investigate this shocking and shabby deal. Who negotiated it, and why? Who authorised it? Was everything done according to the rule book and above board?

While the Jones's are laughing all the way to the bank, the police service is being cut back, stations are closing, people are losing their jobs, and ordinary families across the four counties covered by Dyfed Powys will have to dig deep to pay for a big rise in the precept.

Of course, the Police Authority itself is set to be swept away later this year and be replaced by elected police commissioners. One of the candidates will be John Davies, leader of Pembrokeshire County Council and a former copper himself. Mr Davies's many responsibilities include chair of the authority's finance committee. God help us.

Update 21 January

Thanks to everyone for their very interesting comments. Here is a brief round-up.

One of the comments concerned a private newsletter called Police Market Review, which in January 2000 reported:

  12. DYFED-POWYS Finance Committee have agreed plans for a new PFI police
station at Ammanford. The force will pay an annual fixed amount of £360K plus an
annual index linked amount, presently worth £209K. The contract runs for 30 years.
IT and furniture will be provided by the contractor but there is no ongoing liability for
repair and replacement of these items. Minute, Finance Committee, 28.3.2000

Then we have an parliamentary answer in Hansard to a question from July 2010 in which the life-time cost of the station in Ammanford was put at £19.18m.

Unfortunately, some of the other page links quoted do not work, but what we are getting is a welter of conflicting numbers coming from the Government and the police themselves, with an FOI response from the police authority stating that the annual charge for 2007-08 was £632k, rising to £644k the following year.

At least that ties in with what the chief constable told the county council, although the same response put the total life-time cost at £21.23 million.

In other words, the numbers are all over the place, and whatever the true figure, one thing is clear: the public is being ripped off.

Barclays' involvement would seem to be that it loaned money to TRJ to fund the initial project rather than having a direct hand in the PFI arrangement itself.

Interesting to hear also that Mr Arundale wants to spend another £5 million on building a new custody unit, and that money is being wasted on renting parking in Cross Hands while the Ammanford facility stays empty.

Keep them coming!


Anonymous said...

this story is quite bizarre and you are correct in saying that the only way to sort it is by audit, which of course is time consuming and expensive (more public money coming from somewhere) if the police do their own, that means it comes out from their own budget.. What must be remembered with the pfi money is that it is a seperate payment set aside from their annual council budget. They are not meant to use the pfi account to pay for staffing and normal operations. pfi is for the station only. I don't know how the payment is structured, it would be sensible for the government to issue a payment annually. I don't envisage the police receiving the whole amount in one go.. Stranger things happen.
What has to be realised is that the inspector's predicament would exist even irrelevant if there was a new station or not. If they stayed at the old station, there would have no pfi and the deficit would still have occured. So how is it that the inspector is blaming the station for his woes? The pfi money has got nothing to do with operational costs as they are seperate issues and seperate payments.
Add on the southwales evening post story which is bewildering and scaremongering, and the poor station is used as a point scoring football.

Anonymous said...

what could have happened here is that the councillor while reading the carmarthen journal read their story the wrong way and spoke to the evening post reporter later. What the cj does say is that the police estate publishment stated that it costs £668,000 a year. If the councillor read this as 668k for every year for the 30year lease which comes to 22million minus the 7m which has already been paid equalling 15m. the evening post story says another 15milliö pounds has to be paid. The word another is a bit unusual. But notice the ep version has a slightly different version. What it says here is that the estate publishment stated that it cost 668 in that year (seemingly referring to the year 2001 in the sentence above).
What i believe is that the payments started off at a higer level and they get less after each year. Which i find a bit unusual because if the payment total is with the government,the police and dolef cyf. Divide the total by the duration and there is the figure. As the station cost 2.5m and the repayment total seems to be 8m and it comes to £266,666 a year plus inflation.
So, if 266k was the starting point,how is it that the estate publication say it cost 668k? That doesn't make any sense. Where does the additional 400k come from? Should the cj version be correct too and giving the impression that it costs 668k a year, that obviously means 400k has been oversent every year since 2001 based on the 2.5m build and 8m repayment. as i mentioned, it depends on how it has been structurf. The police may well have had 25% in advance for all we know. If that was the case, they could have paid more off so they'd pay less later.

Anonymous said...

lets look at this from another angle. 2.5m build over 30years.. Assume that inflation was constant at 5%, after 30years it is obviously 150% in total. 2.5m plus 150% equals 6.25m . Interest fluctuates, maybe the average in one year was 3.8, another 4.2 or whatever. even 2.5m for that building seemed to have been exessive. But saying that, the was another building built in ammanford shortly after and there was some gritting of teeth. Maybe it was a fashion in constructing overpriced buildings.
Whatever has happened regarding ammanford police station, it looks a bit of a bolls up with the estimate. It's quite logical to wonder how come 2.5m has turned into 15m. if this was true, i would seriously suggest that the government had a problem in issuing an over inflated cheque. They would have realised that the building was not value for money and put a halt on it.. The police would have known that the building was overpriced and a bad deal. i would like to think there is nothing untoward. Jurt i wish i knew what formula they used to calculate their repayments as it's doing my head in now..(anon2)

Cneifiwr said...

Thanks again Anon2. I checked my notes again from the council meeting, and Arundale definitely said £700k p.a. and rising.

Mind you, figures don't seem to be his strong point. He wanted a 5% rise in the precept but had to admit that he did not know what the precept was as a share of funding.

Anonymous said...

In fairness to Mr Grange it was not his fault but the deal was concluded by his predessor Mr ray White. Everybody knew that the station was too big and would turn into a white elephant - Im just surprised it has taken this long for the scandall to break.

What is even more scandalous is this. the station at Ammanford has probably one of the most up to date custody units in wales and could house upwards of 15 detainees. Despite this the current chief seems determined to spend another five million pounds on a brand new custody unit. In addition the station has excellent garaging facilities yet the force RENTS a factory unit at Crosshands to house the divisional traffic unit.

Personally i would allow the force to buy a garden shed until they use current facilities to the max.

Anonymous said...

yay, i found something, there is a pdf which shows dyfedpowys police

page 55.... finance comittee have agreed new plans for a new pfi station ammanford. the force will pay a fixed amount of 360k plus an anual indexed amount, presently worth 209k. the contract runs for 30 years. it and furniture will be provided by the contractor but there is no ongoing repair and replacement of these items


Anonymous said...

capital value 8m contract 30 yrs

(this ties in with what the walesonlne said)


Ammanford Police Station 19.18


Anonymous said...

hansard july 2002 mentioned the estimated capital value of ammanford station is 6m

walesonline 2005 says the building was 2.5m and mention 8m which could be the capital value

house of commons jan 2008 says equivalant capital cost 8m

annual charge for 2007-2008:632k
est for 2008-09:644k


projected total cost:21.23million

Anonymous said...

The bank has also financed a £3 million deal for the building of a new Police station in the town of Ammanford, Carmarthenshire, in conjunction with T.Richard Jones, a local construction company.

confuded??? i am, lol

Anonymous said... december 1999

Anonymous said...

the deal was that the annual payment is made up of two parts..360k fixed rate and 209k variable. That means 569k for the first year. if that statement was made in 2000 and inflation went up, the variable rate is going to be higher. what doesn't make much sense to me it does not quite tie in with what the evening post said when it cost 668k for that year when they were referring to 2001.
From what i can gather is that the 360k fixed for 30years is base building/land price/fittings and equipment and the variable rate consists of land price/building costs etc rising. So when a property value goes up, so does the variable. As there were two major property booms between 2001 and 2004, do not be suprised to find that the original 2.5m build was worth 5m by 2004 and gets added into the variable..
How to speculate property prices? As the application seemed to be have made in late 1999, prices were holding. Who could have predicted the forecast for 2001 and 2003 property booms? By the time 2004 came, house prices literally doubled.. This has to be the reason why they are paying 700k or near. The variable part of the annual figure has to go up every year to cover the cost of inflation/property/materials and labour. Trj and cyf will want to protect their investment. If property prices etc go up tomorrow, so will the indexed part of the sum (anon2)

Anonymous said...

let me know which link doesn't work.
One thing about this pfi deal is that the police will have to get every year analyzed by their accountant and that comes out from the normal budget. I dont see how else it can be paid for. If cyf gives them their annual bill, the police have to check it out (anon2)

Cneifiwr said...

Thanks again Anon2. I've tried them all again, and the only link I can't get now is the FOI response from the police authority. It may just be operator error.

I don't think the Jones's need to worry about protecting their investment - they have already filled their boots. Even Sir Fred Goodwin would be happy with a nestegg like that.

Anonymous said...

i think it's this one?

Anonymous said...

or was it this one?? notice the mention of a 2.5% uplift. i suppose this is correct if the inflation rate was 2.5% for the previous year

Anonymous said...

this is how pfi should be.

as the annual payment is made up of two components. the first is the fixed 360k on the 2.5m build. the second part is the indexed linked part currently approx 340k according to the inspector's 700k a year quote.

so, this means if inflation stays at todays rate, the final bill will be 20.2m, at 5% it will be 23.4m and so on..

how pfi should work is that unused indexed linked money returned to the treasury..

in other words, the intitial 2.5m for the building becomes 10.5m in 2030.

the initial index linked 209k is all rather vague.. what was this 209k consisting of? whatever it is, over 30 years it evolves into 11m-13m.

obviously items such as the IT system will need replacing, if they have got a dozen computers and they get replaced by the pfi every 5 years, 5 times in the duration is about 60k, harldy warranting 11m - drop in the ocean. if a roof cost 250k and got replaced 5 times, that's 1.25m. and the chances of that are minimal and i'd be suprised if it gets replaced once. where's it all going or gone? don't tell me, they agreed to pay 250k for roof 'insurance' just in case it wears naturally. and 250k over 30 years turns into 1m. if they had two roofs worth of cover, that's 2m

and the daft thing about it is, it's only for natural wear and tear.

if the roof was damaged by some freak accident or riot damage etc, that will come from the force's own buldings contents insurance anyway, so the pfi would only involve natural wear and tear and anything the builder would be liable for, such as leaks. as for frost damage, that could fall into the equation, so if they used top notch tiles, they should not need replacing.

hope they haven't got 24 carat gold taps in the washroom..


Anonymous said...

you know what i don't quite get regarding pfi? reading various reports recently as a catch up, what it seems like a pfi hospital works in a different way for some reason.

from what i'm looking at is, that many media sources are quoting that hospital funds are being used to apy off the lease. how can this be?

pfi is a seperate payment and finance source. ie the treasury. the local health bord gets the finance from the treasury so they can pay the pfi.

so how are services from their budget being cut to pay the bill?

if the same principle applies to all, it would have been thought that it applies to the police as well?

hopefully i'll find an answer soon (anon2)