Councillors Delay Decision On Fees As Scilly’s Airport Running Out Of Money

airport runwayScilly’s airport is about to run out of money. But a chaotic meeting held on Friday to deal with the urgent cash situation and agree a new charging structure was abandoned half way through because Council management failed to provide the financial papers in time.

And members argued about whether a budget needed to be set at all.

Cllr Steve Sims, chairing the meeting, warned that the airport could have to reduce operational hours from April if the situation isn’t fixed.

The meeting heard that the airport will have just £15,000 left in its reserves by the end of March.

It started the financial year with £250,000, but £100,000 was paid towards the Lagan refurbishment work.

And a further £127,000 was overspent because the Council had to bring in agency air traffic controllers after several staff members left last year.

At the special Transport Committee meeting on Friday, councillors were asked to approve increases in landing charges of between 10% and 20%.

But they’ve delayed making a decision because they say they didn’t get enough time to review the financial details.

The budget papers were only sent out the day before and some councillors complained they’d only picked them up when they arrived at the meeting.

It led to a call by Cllr Robert Dorrien Smith to adjourn the meeting. He said he’d had no chance to look at the figures.

But that appeared to cause problems because it affected the timetable of financial approvals required before the new Council year in April.

Cllr Sims warned “if we leave this to the end of April we will be running for four days a week, because there’ll be no money.”

He wanted to give councillors an hour to digest the data. Some members argued that wasn’t enough time for such a critical matter.

Council Chief Exec Theo Leijser warned that the airport is a ‘trading account’ so is not allowed legally to use taxpayers money to fill any shortfall in budgets.

He said they’d be required to borrow money with the additional costs falling to the Council.

Cllr Dorrien Smith also wanted to defer any changes to fees until officers had consulted with the one operator at the airport, Skybus.

“It’s been left too late and there’s no consultation” said Robert, who felt the airline could offer some changes in practice that would help the situation at the airport.

That was supported by Cllr Marian Bennett, who said it was a legal requirement by the CAA to talk to customers about potential increases in landing charges.

But Senior Manager for Finance, Laura Roberts, told Marian that it was not correct, legislatively or morally, to engage with a commercial operator on setting fees.

“I’m afraid you’re wrong,” said Marian.

Robert wanted to focus on potential sources of income, like an increase in passenger numbers this season and controlling outgoings.

But Laura said the airport “can’t base its budget on inflated volumes when there’s no evidence for it.”

“The real problem is the Council’s failure to control costs at the airport” said Cllr Dorrien Smith, “and if the knee jerk reaction is to simply say woops, oh dear, lets charge more to the travelling public, that’s not a good way to go on.”

Marian went a stage further, saying “we never get to grips with the service that’s provided and the cost. Why should our visitors pay for mismanagement that adds to the cost?”

Marian felt the airport is “the most vital of public services” and “as important as social services and water.”

But Chief Executive Theo Leijser said he took “serious issue” with the accusation of mismanagement.

He said the facility has been peer reviewed by an independent agency and scrutinised by the CAA and both say there are no further cost savings in staff that can be made, while still having a safe airport.

And he went on to say that there was “no logical link” between the fees charged by the airport and Skybus’ fares. When fees were frozen last year, fares increased for passengers, he said.

Cllr Sims said even if all the increase was passed on to the passenger, it would only amount to £1.40. “That’s half a cup of coffee,” he said.

Council Chairman Amanda Martin effectively took over the running of the meeting as Chairman Steve Sims lost control.

Following her two prompts, and almost 45 minutes after Cllr Dorrien Smith first proposed that the meeting be adjourned, a motion was finally passed to delay the decision.

Councillors will now meet again on Thursday to consider their next move but not all members were happy about rescheduling, as not everyone present on Friday can make it later this week.



25 Responses to Councillors Delay Decision On Fees As Scilly’s Airport Running Out Of Money

  1. D Bader March 2, 2015 at 5:56 pm

    CEO: if the airport is a ‘trading account’ then the £200k+ that was taken out of airport funds to purchase a house in Ennor Close for an ATC is part of that ‘trading account’. Right?
    Now that that house has been taken back into housing stock, then surely the £200k+ should be put back into the airport fund. Simple accounting and a good memory will show that there are many more examples of this ‘smoke & mirrors’ type management.

  2. Yetanoth February 24, 2015 at 5:52 pm

    A question rather than a comment, when do councillors have to declare an interest? Can one assume that certain participants in the debate suggesting that consultation be entered into with the sole operator at the airport might also be share holders in said company? If so surely there is a conflict of interest both in their very presence and in their specific suggestion. Just wondering.

  3. C.Peters February 24, 2015 at 2:36 pm

    As a frequent visitor to Scilly by Skybus, I find this whole situation very scary indeed!
    Losing confidence in the safety aspect too with constant staffing problems!
    Rumours are running rife already, not too good for the start of the new season.

  4. Ray Wornes February 24, 2015 at 10:37 am

    Dean – Your thorough reasoning of the situation is far beyond what would normally be heard at Council meetings. This Council administration is light years away from the old admin and in general terms are making progress in the right directions on a number of issues for which they are not getting any thanks. However, most off-island Councillors in my view are still a problem.

  5. Enquirer February 24, 2015 at 10:36 am

    As others have stated here before me this once again illustrates that the Council Administration is and are not fit for purpose. Lack of financial planning and control, airy fairy ideas on improvements and a general demonstration that they should not be questioned but allowed to carry on as they please. Councillors are also incompetent, they continually fail to hold their officers to meaningful account, appear to have no vision of future planning and as admitted by Steve Simms cannot even Chair or run their meetings effectively.
    We end up with a redeveloped airport, which in many peoples view is not fit for purpose, after a small fortune has been spent on it and it is about to become financially unsustainable.
    This whole situation is typical of the way in which our Council operates, they love grand plans (Airport redevelopment / Porthmellon Innovation Centre) but totally fail to spend their time dealing with the important, but mundane, matters such as finaly getting their financial systems and management in order, efficiently dealing with waste disposal for the Islands and maintaining their housing stock.

    • A. Dumbledore February 24, 2015 at 12:44 pm

      The airport was funded by European money, so if you have the mindset of some people on the islands (especially when talking about the school/mundersley etc) it’s magic money that got magic’ed into existence by the fairy’s, therefore does not count, and in no way, at any point did it come from the tax payer.

  6. Nobby Nobbs February 23, 2015 at 6:56 pm

    Reading this article and pulling out the details as facts
    1. The airport will have £15,000 left in its reserves by the end of March,
    OK so the new financial year begins on the 5th of April and will begin with £15,000 in reserve.

    2. £127,000 was overspent because the Council had to bring in agency air traffic controllers after several staff members left last year.
    Well the council had two options, bring in agency staff or close the airport, while looking to train or hire new atc’s

    3. He (Cllr Simms) wanted to give councillors an hour to digest the data. Some members argued that wasn’t enough time for such a critical matter.
    Really?, it takes these people an hour to read a sheet of A4 and digest a profit and lost balance sheet, talk about low ability.

    4. The budget papers were only sent out the day before and some councillors complained they’d only picked them up when they arrived at the meeting.
    Have you not heard of email, or are some of the councillors still insisting on snail mail?

    5. It’s been left too late and there’s no consultation” said Robert, who felt the airline could offer some changes in practice that would help the situation at the airport.
    This would be the single operator, the same company that effectively have a monopoly on all transport on and off the island, and he really thinks their going to help out, their a monopoly, they don’t care.

    6. “The real problem is the Council’s failure to control costs at the airport” said Cllr Dorrien Smith, “and if the knee jerk reaction is to simply say woops, oh dear, lets charge more to the travelling public, that’s not a good way to go on.”
    Mr DS is correct, but if the travelling public don’t finance the airport through landing taxes, who will?

    7. Marian went a stage further, saying “we never get to grips with the service that’s provided and the cost. Why should our visitors pay for mismanagement that adds to the cost?”
    Marion I agree, however I refer you to my response above #7, if the travelling public don’t finance the airport through landing taxes, who will?

    8. Cllr Sims said even if all the increase was passed on to the passenger, it would only amount to £1.40. “That’s half a cup of coffee,” he said.
    When you’re already paying £160 for a plane ticket and extra £1.40 is neither her nor there.

    Perhaps the time has come to either gift the ISSco the airport and let them run it, further adding to the cries of monopoly, or the council lobby central government for a public service subsidy, or we stop looking to air and instead concentrate on a fast all year round boat service.

  7. Steve Sims February 23, 2015 at 5:30 pm

    HANDS UP IT WAS A TERRIBLE MEETING.

    Some of the papers turned up unacceptably late. Robert quite reasonably proposed a deferment which blindsided me, I should have gone to the vote there and then. However members wished to comment and I had to allow that, though not for as long as I did. The meeting is running again on Thursday at 12, straight after planning so there will be no additional travel costs and hopefully it will run a little more smoothly. You live and learn.

  8. bill February 23, 2015 at 4:55 pm

    Not for the first time I have to wonder what all the (ex)visitors/tourists who visit this site make of all this – on the other hand it helps to prove that it isn’t just mainland politicians who have lost the plot. How can you, apparently suddenly, realise that the islands’ second most important asset has run out of money?

  9. Ray Wornes February 23, 2015 at 2:34 pm

    I sincerely hope that at Thursday’s meeting of the Transport Committee a responsible decision will be made by Councillors to increase the landing fees by the recommended amount. This will bring the airport account back into balance from its present loss-making situation. However, that loss was actually caused last year by forceful Councillors when they went against advice resulting in a loss of airport fees. This has had a knock-on effect in that the amount necessary to balance the books this year needs to be a higher percentage rise – although still a very small sum of money per passenger when compared to the high fares. The airport normally operates at cost with an adequate reserve for contingencies. This low cost operation benefits everyone in tourism. What do you think would happen if the Council decided to privatise the airport because of a loss-making situation? If we want a new helicopter service in 2016 then we must hold on to our airport to enable future competition to flourish. With all of the taxpayers’ money that has been spent on our airport we are set up for many years of low cost operations. It would be scandalous if we were to hand all that over to a private operator.

  10. Peter February 23, 2015 at 1:25 pm

    I’ve been slagged off over the weekend on this site for my boring contributions, and rightly so, as I keep on about the same old themes, which can be distilled down to:
    (1) sort out air transport, or your economy and each and every resident’s very existence on the islands are doomed
    (2) Scilly Council is utterly inept and should be shut down and its powers transferred to Cornwall.
    I really do try to stop posting on the same old themes, but there is wave after wave on Scilly Today of stories of mind boggling incompetence by the Council. It seems that this story takes the biscuit and brings my two themes together: the Council in chaos whilst the islands’ only industry faces a foreseeable and avoidable major obstacle to its future viability. Please, Scillonians, for your own sakes, beg the Secretary of State for Communities and Local Government to intervene and put the islands into some kind of interim special measures.
    After some thought over the weekend, prompted by the critical post on another news item, I am probably not going to post on here again, as, yes, I am boring. I am fed up of watching farce after farce and I feel that I have said all there is to say. It’s also just so depressing to watch the islands being ruined.

    • Richard February 23, 2015 at 8:49 pm

      Peter, if the Isles of Scilly Council were merged with Cornwall County Council, the Islands would be left with two or three councillors (who would not even need to live on Scilly). Even if you felt this would be no loss, almost all of the Council’s admin staff would be lost, as Cornwall would absorb the work, leaving only service delivery (mainly lower paid) staff – meaning jobs would be lost, even if you save on the Council Tax. Other services would be steadily lost as their cost would be higher than on the mainland – and that’s before the NHS Trust has to cut island services because it can’t get the staff to and from Scilly. What would be the impact on the rest of Scilly’s residents?

      As the saying goes, be careful what you wish for…

      • Adam Morton, St.Martins February 24, 2015 at 10:07 am

        As someone running a business, I am not sure that removing the local influence from planning and licensing would be a bad thing! At this point in time, I’m not sure if St.Marys losing all its lucrative jobbies and putting it on a similar footing to the off islands would not enable it to be more understanding of the real economy and a little more objective in its solutions! Services! Fire cover, public loo and shipment of domestic waste is the only services I am aware of. I’m afraid that to be “in it together” has about as much meaning as an investment bankers response to the crash!

  11. Goldy February 23, 2015 at 11:55 am

    I watched the webcast and if this isn’t an indication that our council are totally useless I don’t know what is. If they were running a business they’d be bankrupt long ago.

  12. Dean February 23, 2015 at 11:33 am

    1) I think it is right and proper for the authority to base passenger number models on past numbers and not on the ‘gut feelings’ of Councillors. I do wonder what accomodation bookings are like for 2015 compared with last year, can the Islands Partnership give that information out? Can Tresco Estate let the Council know about their booking figures? Officers have to be given a credible reason to expect figures to increase.

    2) The CAA and a Peer Review have both ruled out ‘mismanagement’, so what on earth is Cllr Dorrien-Smith talking about? Perhaps the airport ought to spend the remaining balance of their account on another peer review, or accounts review. One would guess, however, that the biggest saving they would identify would be for the airport to commission less reviews!

    3) As the Chief Executive points out, fees were frozen last year and yet the IOSSCo still raised fares. And we see today that they have just purchased another local business. One wonders if such fee increases are paying for the IOSSCo to widen their portfolio and ability to make money.

    4) I’m not sure what to think in terms of ‘consultation’ with IOSSCo on fees. But common sense dictates that IOSSCo need an airport, that the council have set a baseline figure for keeping an airport open. I don’t think that fees that support a baseline operational budget should be consulted on, but any fees that seek to bring in ‘surplus’ income should be open to consultation. Basically, the amount that the airport needs to remain open should not be open to negotiation. If the IOSSCo wish to contest that figure then by all means allow them to bring some revised sums to the table. But I would hope that the community on Scilly realise the difference between a Public Body and a business, and that they side with the council on this.

    What do people on Scilly really know about the IOSSCo? What do they really know about Rob Goldsmith, or the directors, or the major shareholders? Where are their declarations of interest and public questioning? I’m going to point out that their shareholders are paid a dividend every year, and Rob Goldsmith is paid to make money for them. That doesn’t make him ‘bad’, it just means that he’s running a business, and businesses exist only to make more money than they spend. With this in mind, it’s beyond me how anyone on these islands cannot see that the Council is the side of ‘the people’ and the IOSSCo are on the side of ‘money’. Anything the IOSSCo can do to help the council and the people of Scilly would be warmly welcomed. Conversely, it would not be proper for the council to do things ‘differently’ so as to help a business to make more money at the expense of the community. If the IOSSCO were offering a new service, a new standard, a new anything, then I could see some merit in the council helping them to achieve this. But they seemingly are not. However, if the IOSSCo would be more transparent over plans to replace the Scillonian III then people might warm to the idea of the high fares, knowing that it was financing an investment in the islands for decades to come.

    But with the shoe on the other foot, the IOSSCO should also be the first to recognise that the need to save for future investment and this brings us back to the topic of consultation on fees. The council need to save money to put towards runways and general provision to update old equipment. I’m not sure if that really is negotiable.

    5) As pointed out in the article, the full impact of the 12% fee increase would be for £1.40 to be put on fares. As an aside, with the cost of oil being so low, one wonders why the IOSSCO’s operational costs have not subsided. If this was the case then profit margins would be wider and so any substantial increase to fees should be regarded as ‘greedy’, especially at this time of austerity and low visitor numbers. No? Then prove it please. If the IOSSCO don’t engage with the community then we’re only left to think the worst, the obvious, that a business is trying to squeeze every penny out of travellers.

    However, back to reality, a £1.40 increase in fares for a flight is negligible. If we’re talking sense here, we’re talking about a flight that many of us undertake very rarely. It’s not a weekly occurrence, it’s not a monthly occurrence, not unless you’re wealthy, like say, Councillor Dorrien Smith! No, for visitors we’re talking about two flights a year, possibly four if they come twice in a year, and for a couple that amounts to £6 for four flights.

    For a family of four going to the mainland for a holiday once a year, that’s a £12 increase compared with last year, again, IF the whole 12% was put on ticket prices by the IOSSCO.

    Compare it with trains. Train prices go up every year, and people use trains a lot, certainly a lot more than you or I will use Skybus to travel on an annual basis. The rail fare has risen by 2.2% in 2015 compared with 2014, and the Prime Minister says this is ok because it is in-line with inflation (more or less) and that huge investment in train services is being undertaken. The Rail Delivery Group says that 97p of every £1 spent on fares goes on operational costs, while only 3p is profit. I’d like to see a breakdown from the IOSSCO to know their margins.

    I don’t see the investment in IOSSCO services, so I don’t accept increases in fare prices at this point. The service remains the same, it’s still hugely impacted by weather, and the transport links between Newquay Airport and Truro are still abysmal, and the Scillonian III is so aged that it can no longer operate in darkness. The Skybus ‘bus’ service isn’t free, the flight routes haven’t changed, and the in-flight meal is still awful… : )

    If the purchase of Island Carriers meant that the IOSSCO now deliver luggage for free, then that would be a great bonus. But methinks that the fee will remain the same…or even increase.

    My mind is there to be changed, but as it stands, I choose to side with the council on this matter. They are open and honest. Sometimes not brilliantly organised, but that’s what happens in local authorities, members have different opinions to officers. But officers are there to give advice based on evidence, whereas members can say what they like, how they like, when they like, to who they like.

  13. Adam Morton,St.Martins February 23, 2015 at 11:24 am

    Big deal, everything else sees 2 or 3% rise in cost. Like the harbour, the dues come from somewhere, one way or another! Or do they want it run into the ground so SSco or Tresco can take it over as an in house operation?

  14. Scilly February 23, 2015 at 10:36 am

    The latest Airport management over the last few years has made no attempt to retain staff that serve in a variety or roles or treat them well or manage a good working environment, thus losing them left right and center, this in turn has cost hundreds of thousands of pounds to recruit and retain new staff, and this problem is still not solved with many on the edge of leaving once again.

  15. Alan February 23, 2015 at 10:23 am

    Suppose that this means any increase will be immediately passed on to passengers by Skybus. Travelling to Scilly becomes more expensive and the hard working residents/visitors foot the bill for the shambles.

  16. Annie February 23, 2015 at 9:37 am

    It’s hard to know where to start on this one. Theo was so quick to defend accusations of mismanagement at the airport but what about his own mismanagement. He’s instigated a restructuring which has left insufficient resource in the finance department – and where else – who knows?

    Pretty much every committee sitting this month has complained about late finance papers, and lack of information. Theo – this is your management team – what are you doing about it?

    Also how did we end up with only £15,000 in the airport reserves? Why did we have to bring in agency air traffic controllers? Absolutely no mismanagement there at all!

    Then there’s the shambolic chairing of the meeting. I’d like to know how much this cost the taxpayer to bring over off-island councillors on special boats – only to cancel the meeting and bring them all over again later this week.

    We seem to be witnessing the council’s credibility disintegrating before our eyes. But will anyone do anything about it? Not likely…

    • Insider! February 23, 2015 at 11:50 am

      There are vacancies in the finance department, nobody wants them, hence the shortfall. Not mismanagement, it’s circumstance dictated by the market and the geography of the islands. If you can think of a solution then please post one here.

      The lack of reserves is a cumulative impact of not saving properly for 10-15 years, it’s not something controllable by the new regime under Theo. The runways HAD to be done, and the timing for a renovation of the terminal to coincide with European funding meant that it had to be done now. Again, this could have been saved for over the last 10-15 years but it was not. Ergo, the reserves were depleted to get essential work done to enable the airport to stay open and provide a good service to the islands.

      The Chairman was trying to emphasise that fees HAD to be increased in order to sustain the running of the airport. He was met with resistance by some members who seemingly wishes to side with the commercial operator rather than the authority.

      The meeting wasn’t a shambles, it was certainly frenetic and there were polar views on offer. This is called democracy and sometimes people don’t agree on the same views. You should be heartened by this development!

  17. Yetanoth February 23, 2015 at 9:18 am

    If it weren’t so frightening it would be laughable! This Council has lost control.

  18. Jonny Exile February 23, 2015 at 9:10 am

    Hopefully this meeting will mark the turning point where officers’ proposals stop being accepted without an informed and full discussion. Robert Dorrien Smith was on top form and Simms and Laura Roberts were frankly overwhelmed in the debate.

    Highlight of the meeting? It has to be Laura Roberts’ ridiculous “mansplanation” style lecture to Robert Dorrien Smith on “the way finance, prudent finance works”. I mean, honestly, the guy runs a multi-million pound business, I’m sure he gets that stuff far better than most.

  19. LINDY February 23, 2015 at 8:50 am

    It, is not a Farce
    It, is not a Comedy
    It is, a poorly delivered Pantomime
    Bring in the Clowns
    But maybe, there here

  20. meme February 23, 2015 at 8:38 am

    Sound like another fine mess, yet again – Councillor Sims losing control, one asks is he fit for the purpose?

  21. Mike February 23, 2015 at 7:52 am

    Sounds like all the facts & information needs to be on hand before such another crucial decision is made which could affect visitor numbers in a fragile, recovering? Market!