Bank discussions to reduce Waltham Forest school debts continue

Discussions with banks to reduce the debts of schools crippled by hidden costs in equipment hire contracts are still to be completed at least four months since they began.

Last year it emerged that a number of Waltham Forest schools were left with debts totalling more than £1million after signing contracts with companies for electrical goods, such as printers and laptops.

Some firms then went into liquidation, leaving schools owing large amounts to banks, or large hidden costs emerged.

Waltham Forest Council has reached agreements with some of the banks involved to reduce the amount of money schools owe after approaching them late last year, but a spokesman said several are still dragging on.

 

He said: “Discussions are currently ongoing with the banks, but it is anticipated that satisfactory outcomes can be achieved.”

Thomas Gamuel Primary School in Colchester Road, Walthamstow, was believed to have been left with seven-figure liabilities after signing a number of leases, incuding a deal for CCTV in 2010.

Clydesdale Bank, which was the bank involved in the contract, has since agreed to cancel the lease.

Edinburgh Primary School in Queens Road, Walthamstow, hired equipment worth up to £60,000, but was left liable for nearly double that amount.

Willow Brook Primary School in Church Road, Leyton, Jenny Hammond Primary School in Worsley Road, Leytonstone, and William Morris School in Folly Lane, Walthamstow, are also believed to have been affected.

The authority and the schools are bound by confidentiality agreements imposed by the banks which prevent the details of the deals being made public.

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6:56pm Wed 20 Feb 13

Cornbeefur says...

This was a well publicised fraud, a type of Fraud that is as old as The Ark but instead of Photo Copiers we have moved into the more emotive realms of 'Computers for Kids'

Staff in some schools unduly and unilaterally signing the 'Schools Life away'

What should be asked is how many of these staff have been disciplined for their recklessness?

Why was there no safeguards and contingencies in place to prevent unskilled staff signing complex documents?

Have any 'heads rolled' and I do not mean Head Masters.

Another example of squandering Taxpayers money by inept staff (who knows what the incentives were for them to do so?) by a wasteful Labour Authority (good at this they are)

Had this occurred in the Private Sector
sackings would have been instant.

It may be easy to blame the Banks with this but ultimately the Banks will wonder what kind of incompetent is handling their money.
This was a well publicised fraud, a type of Fraud that is as old as The Ark but instead of Photo Copiers we have moved into the more emotive realms of 'Computers for Kids' Staff in some schools unduly and unilaterally signing the 'Schools Life away' What should be asked is how many of these staff have been disciplined for their recklessness? Why was there no safeguards and contingencies in place to prevent unskilled staff signing complex documents? Have any 'heads rolled' and I do not mean Head Masters. Another example of squandering Taxpayers money by inept staff (who knows what the incentives were for them to do so?) by a wasteful Labour Authority (good at this they are) Had this occurred in the Private Sector sackings would have been instant. It may be easy to blame the Banks with this but ultimately the Banks will wonder what kind of incompetent is handling their money. Cornbeefur

7:39pm Wed 20 Feb 13

mdj says...

The previous article explained that these contracts were signed individually by schools with control of their own budgets. It's a little surprising that our friend the Anonymous Spokesman didn't make this clear. One still wonders how a contract with a bankrupt company doesn't die, but gets resurrected as a debt to a bank: bearing in mind that these bankruptcies may be, not unfortunate events, but fraud. If a bank has been issuing loans to serial bankrupts via overnight companies the question of their own culpability may come into play. The school may have a case against the bank for negligence, or breach of banking rules.
Do schools not have networks to compare notes on the value for money of offers that seem too good to be true? If there's a pattern of these bankruptcies, there may well be a pattern of irresponsible bank lending also.
The previous article explained that these contracts were signed individually by schools with control of their own budgets. It's a little surprising that our friend the Anonymous Spokesman didn't make this clear. One still wonders how a contract with a bankrupt company doesn't die, but gets resurrected as a debt to a bank: bearing in mind that these bankruptcies may be, not unfortunate events, but fraud. If a bank has been issuing loans to serial bankrupts via overnight companies the question of their own culpability may come into play. The school may have a case against the bank for negligence, or breach of banking rules. Do schools not have networks to compare notes on the value for money of offers that seem too good to be true? If there's a pattern of these bankruptcies, there may well be a pattern of irresponsible bank lending also. mdj

10:51pm Wed 20 Feb 13

Helen, Walthamstow says...

There is now in place a council-managed list of approved providers for any equipment a school might wish to lease or hire. Schools are also asked to pass all contracts by a team based at the local authority.

It is quite wrong to dismiss the schools concerned by describing them as reckless. These deals were highly sophisticated and quite deliberately disguised the way the hidden costs would accumulate.
There is now in place a council-managed list of approved providers for any equipment a school might wish to lease or hire. Schools are also asked to pass all contracts by a team based at the local authority. It is quite wrong to dismiss the schools concerned by describing them as reckless. These deals were highly sophisticated and quite deliberately disguised the way the hidden costs would accumulate. Helen, Walthamstow

12:28am Thu 21 Feb 13

Cornbeefur says...

Helen, Walthamstow wrote:
There is now in place a council-managed list of approved providers for any equipment a school might wish to lease or hire. Schools are also asked to pass all contracts by a team based at the local authority.

It is quite wrong to dismiss the schools concerned by describing them as reckless. These deals were highly sophisticated and quite deliberately disguised the way the hidden costs would accumulate.
I totally agree that they were sophisticated but there should have been some system in place to prevent such manipulation of inexperienced staff.

A Freedom of Information Act inquiry will have to be submitted.

Utter misuse of Public Funds again by New Labour
[quote][p][bold]Helen, Walthamstow[/bold] wrote: There is now in place a council-managed list of approved providers for any equipment a school might wish to lease or hire. Schools are also asked to pass all contracts by a team based at the local authority. It is quite wrong to dismiss the schools concerned by describing them as reckless. These deals were highly sophisticated and quite deliberately disguised the way the hidden costs would accumulate.[/p][/quote]I totally agree that they were sophisticated but there should have been some system in place to prevent such manipulation of inexperienced staff. A Freedom of Information Act inquiry will have to be submitted. Utter misuse of Public Funds again by New Labour Cornbeefur

7:27am Thu 21 Feb 13

Helen, Walthamstow says...

Cornbeefur wrote:
Helen, Walthamstow wrote:
There is now in place a council-managed list of approved providers for any equipment a school might wish to lease or hire. Schools are also asked to pass all contracts by a team based at the local authority.

It is quite wrong to dismiss the schools concerned by describing them as reckless. These deals were highly sophisticated and quite deliberately disguised the way the hidden costs would accumulate.
I totally agree that they were sophisticated but there should have been some system in place to prevent such manipulation of inexperienced staff.

A Freedom of Information Act inquiry will have to be submitted.

Utter misuse of Public Funds again by New Labour
As I explained, there is now a system in place - largely as a result of some schools ending up in deep financial water. They were victims of sales campaigns which are technically legal, but that most of us would regard at least as less than honest and at worst as scams.

I don't see what as FOI request could reveal that is not already widely known.

I also don't see why Labour gets blamed for this particular affair. It was private business interest which drove these deals.

A more interesting FOI might explore just how much money is being siphoned out of some schools' budgets by PPI and PFI deals entered into for building work carried out under both Tory and Labour regimes.
[quote][p][bold]Cornbeefur[/bold] wrote: [quote][p][bold]Helen, Walthamstow[/bold] wrote: There is now in place a council-managed list of approved providers for any equipment a school might wish to lease or hire. Schools are also asked to pass all contracts by a team based at the local authority. It is quite wrong to dismiss the schools concerned by describing them as reckless. These deals were highly sophisticated and quite deliberately disguised the way the hidden costs would accumulate.[/p][/quote]I totally agree that they were sophisticated but there should have been some system in place to prevent such manipulation of inexperienced staff. A Freedom of Information Act inquiry will have to be submitted. Utter misuse of Public Funds again by New Labour[/p][/quote]As I explained, there is now a system in place - largely as a result of some schools ending up in deep financial water. They were victims of sales campaigns which are technically legal, but that most of us would regard at least as less than honest and at worst as scams. I don't see what as FOI request could reveal that is not already widely known. I also don't see why Labour gets blamed for this particular affair. It was private business interest which drove these deals. A more interesting FOI might explore just how much money is being siphoned out of some schools' budgets by PPI and PFI deals entered into for building work carried out under both Tory and Labour regimes. Helen, Walthamstow

9:59am Thu 21 Feb 13

UKIP-local says...

None of the comments appear to mention any possibility of carelessness on the part of those in charge of the budgets. None have thought the public sector might be just a little tiny bit useless when it comes to management and financial propriety.

I suggest that the salesmen involved saw an opportunity and went for it.

As to the detail of why the contracts have continued after the insolvency of the sellers, the answers are long and I suggest reading any book on contract and the companies acts to understand it.
None of the comments appear to mention any possibility of carelessness on the part of those in charge of the budgets. None have thought the public sector might be just a little tiny bit useless when it comes to management and financial propriety. I suggest that the salesmen involved saw an opportunity and went for it. As to the detail of why the contracts have continued after the insolvency of the sellers, the answers are long and I suggest reading any book on contract and the companies acts to understand it. UKIP-local

10:24am Thu 21 Feb 13

Alan_1976 says...

UKIP-local wrote:
None of the comments appear to mention any possibility of carelessness on the part of those in charge of the budgets. None have thought the public sector might be just a little tiny bit useless when it comes to management and financial propriety.

I suggest that the salesmen involved saw an opportunity and went for it.

As to the detail of why the contracts have continued after the insolvency of the sellers, the answers are long and I suggest reading any book on contract and the companies acts to understand it.
Should they hire some of those people from the private sector that are now out of work as their companies that lease equipment to schools are now insolvent?

They seem much better at their jobs?
[quote][p][bold]UKIP-local[/bold] wrote: None of the comments appear to mention any possibility of carelessness on the part of those in charge of the budgets. None have thought the public sector might be just a little tiny bit useless when it comes to management and financial propriety. I suggest that the salesmen involved saw an opportunity and went for it. As to the detail of why the contracts have continued after the insolvency of the sellers, the answers are long and I suggest reading any book on contract and the companies acts to understand it.[/p][/quote]Should they hire some of those people from the private sector that are now out of work as their companies that lease equipment to schools are now insolvent? They seem much better at their jobs? Alan_1976

10:46am Thu 21 Feb 13

Cornbeefur says...

UKIP-local wrote:
None of the comments appear to mention any possibility of carelessness on the part of those in charge of the budgets. None have thought the public sector might be just a little tiny bit useless when it comes to management and financial propriety.

I suggest that the salesmen involved saw an opportunity and went for it.

As to the detail of why the contracts have continued after the insolvency of the sellers, the answers are long and I suggest reading any book on contract and the companies acts to understand it.
I mentioned it in the first comment in tread.

Those responsible seem to be still in their positions.
[quote][p][bold]UKIP-local[/bold] wrote: None of the comments appear to mention any possibility of carelessness on the part of those in charge of the budgets. None have thought the public sector might be just a little tiny bit useless when it comes to management and financial propriety. I suggest that the salesmen involved saw an opportunity and went for it. As to the detail of why the contracts have continued after the insolvency of the sellers, the answers are long and I suggest reading any book on contract and the companies acts to understand it.[/p][/quote]I mentioned it in the first comment in tread. Those responsible seem to be still in their positions. Cornbeefur

12:18pm Thu 21 Feb 13

Robert19 says...

Alan_1976 wrote:
UKIP-local wrote:
None of the comments appear to mention any possibility of carelessness on the part of those in charge of the budgets. None have thought the public sector might be just a little tiny bit useless when it comes to management and financial propriety.

I suggest that the salesmen involved saw an opportunity and went for it.

As to the detail of why the contracts have continued after the insolvency of the sellers, the answers are long and I suggest reading any book on contract and the companies acts to understand it.
Should they hire some of those people from the private sector that are now out of work as their companies that lease equipment to schools are now insolvent?

They seem much better at their jobs?
This is a big scam where the scammers deliberately bankrupt their companies having pocketed a large amount of money before they do so. The banks then pick up the debt which has escalated in the meantime.
One of the consequences of loss of local authority supervision and support even before academies and free schools come on the scene.
So I wouldn't take up your suggestion to employ these people who are the cause of the problem not the solution.
[quote][p][bold]Alan_1976[/bold] wrote: [quote][p][bold]UKIP-local[/bold] wrote: None of the comments appear to mention any possibility of carelessness on the part of those in charge of the budgets. None have thought the public sector might be just a little tiny bit useless when it comes to management and financial propriety. I suggest that the salesmen involved saw an opportunity and went for it. As to the detail of why the contracts have continued after the insolvency of the sellers, the answers are long and I suggest reading any book on contract and the companies acts to understand it.[/p][/quote]Should they hire some of those people from the private sector that are now out of work as their companies that lease equipment to schools are now insolvent? They seem much better at their jobs?[/p][/quote]This is a big scam where the scammers deliberately bankrupt their companies having pocketed a large amount of money before they do so. The banks then pick up the debt which has escalated in the meantime. One of the consequences of loss of local authority supervision and support even before academies and free schools come on the scene. So I wouldn't take up your suggestion to employ these people who are the cause of the problem not the solution. Robert19

12:47pm Thu 21 Feb 13

Alan_1976 says...

Robert19 wrote:
Alan_1976 wrote:
UKIP-local wrote: None of the comments appear to mention any possibility of carelessness on the part of those in charge of the budgets. None have thought the public sector might be just a little tiny bit useless when it comes to management and financial propriety. I suggest that the salesmen involved saw an opportunity and went for it. As to the detail of why the contracts have continued after the insolvency of the sellers, the answers are long and I suggest reading any book on contract and the companies acts to understand it.
Should they hire some of those people from the private sector that are now out of work as their companies that lease equipment to schools are now insolvent? They seem much better at their jobs?
This is a big scam where the scammers deliberately bankrupt their companies having pocketed a large amount of money before they do so. The banks then pick up the debt which has escalated in the meantime. One of the consequences of loss of local authority supervision and support even before academies and free schools come on the scene. So I wouldn't take up your suggestion to employ these people who are the cause of the problem not the solution.
That was the point I was making. Need sarcasm tags on this thing
[quote][p][bold]Robert19[/bold] wrote: [quote][p][bold]Alan_1976[/bold] wrote: [quote][p][bold]UKIP-local[/bold] wrote: None of the comments appear to mention any possibility of carelessness on the part of those in charge of the budgets. None have thought the public sector might be just a little tiny bit useless when it comes to management and financial propriety. I suggest that the salesmen involved saw an opportunity and went for it. As to the detail of why the contracts have continued after the insolvency of the sellers, the answers are long and I suggest reading any book on contract and the companies acts to understand it.[/p][/quote]Should they hire some of those people from the private sector that are now out of work as their companies that lease equipment to schools are now insolvent? They seem much better at their jobs?[/p][/quote]This is a big scam where the scammers deliberately bankrupt their companies having pocketed a large amount of money before they do so. The banks then pick up the debt which has escalated in the meantime. One of the consequences of loss of local authority supervision and support even before academies and free schools come on the scene. So I wouldn't take up your suggestion to employ these people who are the cause of the problem not the solution.[/p][/quote]That was the point I was making. Need sarcasm tags on this thing Alan_1976

3:10pm Thu 21 Feb 13

mdj says...

'This is a big scam where the scammers deliberately bankrupt their companies having pocketed a large amount of money before they do so. The banks then pick up the debt which has escalated in the meantime'
(Robert).
This is my point: to what extent are the banks enabling the actions of what appear to be tactical (ie fraudulent) bankruptcies? If the banks can adopt these debts, they must have had a decisive role in enabling the companies to set up in the first place. What due diligence did they carry out?

As for Helen's PFI point; PFI has been well compared to buying a house on a credit card, and I can't blame the government for pulling the plugs, even at short notice, on some of these schemes locally, despite the disruption.
I wonder how much computer kit of dubious educational value will have been junked years before the PFI contract sees them paid off?
'This is a big scam where the scammers deliberately bankrupt their companies having pocketed a large amount of money before they do so. The banks then pick up the debt which has escalated in the meantime' (Robert). This is my point: to what extent are the banks enabling the actions of what appear to be tactical (ie fraudulent) bankruptcies? If the banks can adopt these debts, they must have had a decisive role in enabling the companies to set up in the first place. What due diligence did they carry out? As for Helen's PFI point; PFI has been well compared to buying a house on a credit card, and I can't blame the government for pulling the plugs, even at short notice, on some of these schemes locally, despite the disruption. I wonder how much computer kit of dubious educational value will have been junked years before the PFI contract sees them paid off? mdj

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