East Cambridgeshire District Council (ECDC) has thrown its future behind the commercial activity of its trading company, East Cambs Trading Company Ltd (ECTC).

The problem is that the published accounts for that company do not make good reading with results showing losses and yet more losses.

In fact, accumulated losses according to the published accounts are now £572,482!

Make no mistake, these losses are losses attributable to your Council and as such, to you as residents of the District.

To make things worse, ECDC has lent the Company millions of pounds. These are due to be repaid by the end of March 2021, but the trading company has now stated that it cannot repay the money as and when due.

Despite the accumulated losses, and forecast of losses for the coming 2 years, ECDC Conservative Councillors voted to approve a new £4.9 million loan, of your money, to the company.

The performance of the Company has not been good ever since its formation and its business plan doesn’t make good reading.

	2019/20	2020/21	2021/22	2022/23
Profit after tax	(556,384)	(78,592)	(262,711)	1,177,678

The profit in 2022/23 is somewhat surprising and sees huge changes to Key Performance Indicators (KPI’s) and is going to require huge changes in the business model, but it is published so I am not ignoring it.

The accounts include notes to confirm that the precarious position of the company and its dependence on these loans to continue trading.

“The company successfully negotiated amended terms to its loans with Cambridgeshire & Peterborough Combined Authority. The amended terms include interest-free periods and most importantly agreement that the loans would not be due for repayment until March 2023. It has also secured a new facility from East Cambridgeshire District Council that will be available in March 2021 and will enable the Company to repay its existing loan to the council and have sufficient funds to continue its projects. This loan will be due for repayment in 2023.”

ECTC Accounts 20/21

What happens if these wild forecasts turn out not to be reality? After all, we are going through a huge economic upheaval as a result of COVID-19 and we have a further upheaval in terms of having no deal with the EU on 1 January, impacting tremendously the ability of many sectors to continue to operate.

Why has ECDC put so much of your money at risk? Why is it so desperate to sell off public owned land? What is their absolute desperation?

The Medium Term Financial Strategy answers that question:

The Council cannot continue without making savings of over one-third of its annual budget. The total financial incompetence has led this Council to be in a position of needing to slash services after its complete failure to generate commercial profits.

The worst part though is not the failure to generate profits, but the failure to grasp that they are in a situation that they are simply making worse.

The choice is down to the public: continuing financial incompetence or time for change.

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