“Local authorities are demonstrating ever more clearly their inability to manage, control and operate via wholly owned subsidiaries, the various functions hitherto run completely in house. This is for a variety of reasons but one cause is their lack of awareness of the fundamental principle of “arms length” relationship in finance, trading and elsewhere. The rules are necessary in order to be able to judge performance but also to let the local management get on with the job and the Authority must act only as shareholders and as such they can get involved only at important meetings like AGMs, EGMs. The operation of this principle is now being examined closely in its nationwide application to multi-national concerns by HMRC in order to ensure each unit is paying its fair share of tax. Google, for example, does all its billing from Ireland and Starbucks only pays a small fraction of what is expected in Britain – £10 million on sales of £3 billion.
While we must focus on the present triple dip recession, amateurs like Stockport Metropolitan Borough Council should concentrate more on their own business or hire people who can and/or bring everything back indoors.
Despite all the concerns regarding the following, Councillor Derbyshire, Leader of Stockport Council, again refused to respond to a question regarding financial irregularities of several million pounds at another SMBC Arms Length Management Organisation – NPS.”
