It appears that the Isle of Wight council isn’t being quite as clear about things as they could be.
Earlier this month OnTheWight were told by the Isle of Wight council (IWC) that they were no further forward in recovering the £500,000 they’d paid in error to a bankrupt company (Pihl – the contractor for Cowes Enterprise College).
The council generously put it down to ‘Human error’ at the time of the loss. OnTheWight labelled it ‘staggering incompetence‘.
Keeping tabs on it
OnTheWight have been regularly seeking updates on the case over the last six months and on 24th April, leader of the council, Jonathan Bacon, told us,
“Apparently the litigation has not concluded and is still ongoing.”
This may have been true, but didn’t tell the full story.
On 5th June, we asked for an update. This time our query, usually answered directly by Cllr Bacon, was mysteriously forwarded to IWC media officers. They replied,
“Please note there is currently no further news in respect to the Pihl court hearing.”
Court ruling not mentioned
Why are we making a point of detailing the dates?
Well, as Alan Limb (a Licenced Insolvency Practitioner from BRI Business Recovery and Insolvency who lives and works on the Island) pointed out to OnTheWight recently, there was a ruling in the courts on the case on 16th April 2015.
It had happened before OnTheWight asked
This was eight days before Cllr Bacon’s reply and fifty days before the reply from the media officers – both of which somehow omitted to mention a significant development in the case.
The judge ruling – that at least £152,575 of the £517,878 paid to Pihl could now not be recovered by the Isle of Wight council. Yes – 30% of that £1/2m paid by ‘human error’ has now gone. The future of the rest of it is uncertain too.
Why the secrecy?
Why would this ruling against the council not be mentioned when either of the updates were sought and given?
Let’s be generous – There’s a chance that the council may try to appeal the ruling. If that’s the case, why didn’t they reveal anything about it – twice?
Reading the administrator’s papers below begs the question, if the money paid to Pihl was due to them (as hinted at by Cllr Phil Jordan on another thread), why have the council gone to the expense of fighting in the courts to have it returned?
Let’s not forget what we learnt back in October 2014 when the ‘human error’ occurred (our emphasis):
“The committee heard the unnamed council officer was actually tasked with ensuring that any outstanding purchase orders for Pihl Ltd were cancelled, after it was learned that the business had gone into administration. Instead the officer did the opposite and made a payment of £517,878 inc VAT (£431,565 ex).”
Legitimate claim on the money?
This is backed up by what OnTheWight has learnt by speaking to a specialist in this field: even if invoices were outstanding, the £14.5m the council has calculated it will cost to make the building usable would more than balance out what was owed – Therefore the chances of the administrator having a legitimate claim on the money was very low.
Obviously, as today’s revelation is showing, it’s much harder to argue it the other way when you’ve given all of the money to the bankrupt company already.
Transparency?
It’s hard to square this opacity with the new transparency the Isle of Wight was promised when the Island Independents came into power two years ago.
The ruling
The information about the ruling can be found in the publicly available document below (page four relates to the IWC payment)
