Why good for Kent but not for Brent?

3 Jul 09
I am confused as to how Kent County Council‘s initiatives differ from the London Borough of Brent’s involvement in the London Authorities Mutual Limited

May I congratulate you on the newlook Public Finance, which is more reader-friendly and inviting to read.

With regards to your cover story ‘Back in the driving seat’ (June 12–18), I am confused as to how Kent County Council‘s initiatives differ from the London Borough of Brent’s involvement in the London Authorities Mutual Limited (referred to in the news story, ‘Councils call for law change after Laml verdict’).

As far as I can see, the creation of an insurance mutual is no different to ‘a commercial services division…
borrowing on the open market’.

Surely the risks are the same in this instance? Despite the comments made that there would be ‘no call on public finances’, who would bear the potential loss should this commercial enterprise suffer a shock like that felt by other FTSE 100 companies after the credit crunch began to take hold? I am sure capping powers would be used to full effect in this instance.

The cover story discusses how Laser was founded to ‘bulk buy electricity for the county council’, while earlier it described how Kent, faced with increased charges by transport operators ‘set up [its] own company’.

Is it down to political persuasion at a local level that Brent is treated differently to Kent, or some technical wizardry around procurement regulations that has enabled Kent to avoid downsizing its activity?

Despite the introduction of new wellbeing powers, many authorities might be afraid to introduce innovation for fear their initiatives will be halted at considerable expense in the back office, which is currently the target of many efficiency agendas throughout the sector.

Mike Lloyd
Assistant accountant,
Halton Borough Council,
Widnes, Cheshire

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