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The only way is up

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The last few days have seen another avalanche of good news about the tram on it's first anniversary.

From all sides, executives and elected councillors, the song has been the same..focussing on passengers numbers up on expectations, passenger satisfaction and the tram being exceeding exceed revenue targets by 3%.

The missing link is the usual absence of any context for the figures. The Council officers and their media communications experts send out the releases and the councillors wave them through without comment.

But if anyone who may read this happens to bump into a councillor below are three questions you may wish to ask--- and if you get any answers please pass them on.

But before the questions just a little context.

  •  BEFORE  the vote to push the tram to York Place was taken, councillors were told in their briefing reports from their council officers,one major one being that the tram would *make* £2.5M a year -  but only by pushing on to York Place.

 

  • AFTER the vote, almost immediately afterwards, this figure was changed--to an operating loss each year.  

 

  • Operating loss is an interesting concept, it has never been precisely defined by the council -  today we are told that means the difference between money taken in and the cost of it's day-to-day operations.

 

(Apparently we needn't bother about, or include, the cost of repairs and maintenance, depreciation, and that inconvenient £18M+ a year bill (for over 25 years)  to pay back the loan we were told wouldn't be needed, but was needed.

Presumably the money that is being paid out on these things every year (for over 25 years) isn't proper money like the money passengers pay for the tickets-- Revenue is real money our council like talking about, but costs are pretend money they don't like talking about.

 

But if in the real world a loss is money that inconveniently (in that inconveniently real world) you don't have anymore to spend on other things.

the operating loss added to the  interest and capital repayments needed on the loan taken out to finish it, means the City is having to find the thick end of £20M every year that it did not plan for and you may have noticed the crisis calls late last year because the council *discovered* they have an emergency shortfall  over the next 3 years of around ....£60M.

  • How much was that? Over three years? A £60 MIllion shortfall...isn't that .... er .....£20 Million or so a year? The amount in the real world that the tram is costing us every year?

.Massaging the figures, burying the bad news, ignoring the inconvenient truths is what struggling PLCs do to their annual figures when they're trying to pull the wool over the shareholders' eyes  --  And it seems what struggling councils do when they're trying to pull the wool over their voters' eyes

 

The three questions for your councillor should you see her or him in the near future:

  1. Are the passenger figures 8% higher than the target  because the system is a great success- or was the target set so low it was impossible to miss ? 
  2. If revenue is expected to be 3% higher than the target ... does this mean the tram is making money?
  3. Are the associated extra costs created by congestion increases outside the small core city centre area (health costs, and other costs) going to be included in the project's balance sheet anytime soon?

Let us know what they say!