I attended Cambridge City Council’s West Central Area Committee on the 8^th of January 2009. During the public forum I asked a series of questions about the Cambridge City Council news release stating the council is owed £618,000 by SecureTicket UK and is taking legal action in the High Court in an attempt to recover the money. I wrote a previous article in response to this news, in that article I drew attention to questions which ought to have been asked and looked into the background of the company.

The questions I put to councillors, including the Executive Councillor for Arts and Recreation, Julie Smith, are listed at the end of this article. After I had asked my questions the chair, Cllr Knightley, said that they weren’t really a matter for the West Central committee, though he accepted it was of interest to all city residents, and suggested Cllr Smith ought not answer all my questions but instead invited her to make a brief statement.

Cllr Julie Smith said:

The City Council has been a victim of fraud”

This goes a step further than the news release issued by the council, it is significant for a few reasons, one is that in cases of fraud the “veil” of separation allowed between separate companies in a group and between individuals and companies falls away giving a better chance of the recovery of monies than would be the case if a subsidiary company was legitimately trading and failed. Given Cllr Julie Smith’s statement that a fraud has taken place one would presume the police have been called in and are now investigating. It is surprising that this was not mentioned in the Council’s 7th of January statement. I am left wondering when fraud was first suspected and when the police were alerted, if they have been at all.

There was a Police Inspector, a Sergeant and a PCSO in the room listening to Cllr Smith’s statement so it would be reasonable to assume the police are now aware, though I did not see any of them take notes at this point.

Cllr Smith also confirmed:

The council’s contract did require that the council’s money be held in a client account

Cllr Smith continued her statement saying she would be held accountable in due course, but would not comment in detail there and then due to the fact the matter is subject to legal action, and because there is to be an independent review. She added that she thought the council had done everything correctly.

Cllr Knightly summed up saying there would be an opportunity to hold councillors to account but that now was not the time for a detailed response.

A member of the public speaking to me after the meeting said that he had been to the Folk Festival and paid online; he appeared to feel that he had personally been a victim of this fraud as his money had not ended up where he expected it to even though he had attended the Folk Festival and got what he was paying for.

What I said to the meeting was as follows:

I want to ask some questions arising from the recent news that the council is owed £618K by the company which ran the online ticket sales for the Cambridge Folk Festival.

• The council’s statement released a couple of days ago states it is taking legal action against SecureTicket UK. Is the council also taking steps to obtain the money it is owed from SecureTicket’s parent company Telsecure? The parent company might have greater assets and be better placed to reimburse the Council.
• In November 2008 a decision to buy software enabling the council to bring internet ticket sales for the Folk Festival in-house was made, however the record of decision made by Cllr Smith did not mention what was presumably a major factor prompting the change – that the council was owed significant amounts of money by its current third party ticket seller. Why this lack of transparency?
• None of the papers for the upcoming Community Services Scrutiny Committee, where folk festival matters are to be discussed, or the Strategy and Resources Committee where the council’s future budgets are to be discussed make any mention of this money which is owed to the council. Why not?
• Did an elected councillor make the decision to use this company, or was the decision made by a junior official? Did whoever made the decision ensure the background of the company was investigated?
• Were councillors aware they were dealing with a subsidiary company which was being kept cash-poor? Are the council’s contracts only with SecureTicket UK or are other members of the group of related companies also parties?
• Were those deciding to use this company aware Cambridge City Council appear to have been one of SecureTicket UK’s first three customers?
• Were those deciding to use SecureTicketUK aware it was previously dormant and had another name : “Trendy Fashions Limited”? Following its reincarnation as SecureTicket UK it came out of dormancy and very shortly after that started taking the money for the Cambridge Folk Festival.
• The private investment company, operating out of the Cayman Islands, which is behind SecureTicket has protected their interests in the company registering a charge against it at companies house, they will now be top priority creditors. What did Cambridge city council do to protect public money, and ensure the interests of Cambridge residents come high on the list of the administrator’s priorities if the company is to be wound up? Was Cambridge’s money required to be kept in a client account for example?

I was able to put those eight concise questions to the councillors without being cut off by the chair. As you can see the response I got from councillors was relatively minimal, but it did provoke a statement containing revelations which would not otherwise have been made.

Cllr Hipkin (Independent, Castle Ward) speaking to me after the meeting suggested I send my questions to the Council’s Chief Executive, asking that they be passed to the chair of the independent review and suggesting that the independent review ensures that their report answers the questions I have raised.