Interest rate swaps

	Call for powers to curb creative accounting deals	The Independent July 30, 1987.
	Councils seek ways of balancing books	Guardian September 16, 1987.

I guess we had some idea of what we were getting ourselves into over interest rate swaps. Before I became a councillor I swapped the ownership of 3 St Helier's Road into Clare's name (up to that point we both owned it) as a device to avoid financial ruin, so quite clearly I had some idea that we might face trouble. To me it seems quite remarkable that we survived the four years without getting into severe trouble. Of course we did get surcharged (over not advertising in the TES) but since that was only a very small amount it hardly seems to matter. See Ban these people from the town hall

It took years to sort out the interest rate swaps and I'd guess a number of legal firms got huge amounts of money out of the process. By the time that everything had been sorted out it all seemed to have an impersonal quality as if it had nothing to do with me (and interest rate swaps were certainly not my idea). This is, to my mind, the key aspect of local government. It is like a pilotless juggernaut. It rumbles on and on without anyone really understanding why it is doing what it is doing, since the people who made the decision are usually long gone before the impact actually happens. In the process the trajectory of the juggernaut can be subtlely shifted, sometimes even reversed, so that even those who started it would have absolutely no idea why it was moving: diabolical intertia.

In practice there were probably worse scandals. Larkswood Pool (Fantaseas) seemingly cost the council £5m, and I had a minor involvement in that. I have also heard things about the Afro-Caribbean centre, which seemingly got left to rot and then the land was given to the Orient Football Club.

However, compared to the amount of money spent by the council the amounts concerned are quite small. Yes, I know that's not much of an excuse...

My father was less lucky than I was. Welwyn Hatfield Council was taken to the cleaners by a smart property dealer as a result of a decision taken when he was leader of that council. As it turned out he could have faced personal bankruptcy, but he didn't. No action was taken against him. They probably thought it was a waste of time since he didn't have the money!

Council ruling shakes the City

A RULING that Waltham Forest Council isnot obliged to repay a penny of £11m borrowed "without lawful authority" fromCredit Suisse has sent shock waves throughthe City.

The decision came yesterday from theCourt of Appeal, which then granted themerchant bank leave to appeal to the Houseof Lords.

In 1988, the council tried to raise money forhousing homeless people by taking a 50 percent share in the deadlocked North EastLondon Property Company (NELPC), thecourt was told.

The plan was for NELPC to build 100 newhomes and sell them, at a profit, after threeyears to sponsor a charity providing housing. The council acted as guarantor for theloan. But the property market collapsed andNELPC went into receivership.

For a full report and responses to the ruling, see next week's Waltham Forest Guardian.

Waltham Forest Guardian May 9, 1996.

Kathleen H. Betton-Small, LL.B., Barrister
Acting Head of Borough Solicitor's Department
154, Blackhorse Road, Walthamstow, London E17 6NW
Telephone 01-527 5544 Fax Ext. 4727__ (081) 509 1755

London Borough of Waltham Forest
Mr.J.E.Brind,
3 St.Heliers Road,
London, E.10 6BH

ourref: LE/KBS/ES
ask for: Mrs .K. H.Betton-Small
extn: 4295

date: 24th July 1991

Dear Mr. Brind,

I am writing to inform you that Neil Gerrard, ex Leader of thisCouncil, was served with a writ. The writ is in relation to interest rateswap transactions which were entered into by the Council between the 12thJune 1987 to the 3rd January 1989. Action is being brought by BarclaysBank PLC and Barclays de Zoete Wedd Limited with whom the agreement wasmade. Mr. Gerrard has been sued on his own behalf and on behalf of allother Members of the Council at the time, which is the reason why I amwriting to you. In order to deal with this matter the following actionhas been taken:-

1. The acknowledgement- of service has been returned - on behalf ofMr.Gerrard.

2. Further correspondence has been entered into with the solicitorsacting on behalf of Barclays Bank and Barclays de Zoete Wedd Limitedto see if they will, at this stage, discontinue the action againstMr.Gerrard and Members of the Council.

Service of a writ on a Member in this way is a legal device. I havewritten to the Plaintiff's solicitors confirming that the assets of theAuthority are vested in the Council and that it is therefore unnecessaryto take action against Members. This may result in discontinuance oftheir action against you.

Clearly it is a matter for you to decide, but it maybe both prematureand costly for you to seek individual legal advice at this stage. I have,however, been advised that Mr.Gerrard is seeking legal assistance.

I shall keep you informed of any relevant developments.
Yours sincerely,
Kathleen H.Betton-Small
Acting Head of Borough Solicitor's Department