Now new investors sought by wi-fi firm

8:00am Tuesday 18th January 2011 in News By Scott D'Arcy

Rikki Hunt and Swindon Council leader Rod Bluh at the launch of Digital City UK in November 2009 Rikki Hunt and Swindon Council leader Rod Bluh at the launch of Digital City UK in November 2009

THERE was a fresh twist in the wi-fi saga last night when Digital City announced it was looking for new private investment.

The firm behind the project is said to be in “positive” discussions over securing new suitors to boost the beleaguered project, but chief executive Rikki Hunt remained tight-lipped about the negotiations.

Controversy has surrounded the scheme since it was revealed the council loaned Digital City £450,000 in return for a 35 per cent stake in the start-up company.

Since it was launched in December 2009, severe delays have meant the promise of town-wide limited free wi-fi by December last year went unfulfilled, with only the Highworth pilot area being completed.

Yesterday’s statement made it clear that any potential deal with a private firm would include a commitment to an early repayment of the loan – of which Digital City has so far drawn £350,000.

Last night, Mr Hunt confirmed he was still leading the project and investors were being sought to try and get it back on track.

He said: “The goal is to get the progress that we are sadly lacking.

“We are just looking at financing the business – we have been delayed and now it’s about how do we move forward quickly.

"It would be a great opportunity if we can raise the finance.

“It is absolutely key, and it always has been for me, that we get the loan paid on time.

"I don’t think it’s a potential stumbling block so long as somebody’s got the appetite. I think it’s important that the council stays there as a partner.

“It’s really, really hard because of what has gone before to put times on these things.”

In a statement, deputy leader of the council, Coun Garry Perkins, who is also the council’s representative on the Digital City board, said: “I remain convinced about the potential of the wi-fi project.

“It is clear the progress made to date has not been what all involved at the outset had hoped for.

“However, things don’t always go as you plan in business, particularly when you are dealing with something that is innovative.

“Rather than dwell on the past, I am determined to proactively seek out new opportunities to reshape this initiative so it can realise its potential and deliver something positive for the people of Swindon.”

Coun Derique Montaut, leader of the Labour opposition, said: “I have been uneasy right from the very start of this business partnership.

"I had serious reservations with risking council taxpayers’ money in private investment.

“It was inevitable something was going to happen and it does not surprise me. But these type of discussions ought to be taken in a more open and transparent form in the future.

“Those involved in the decision-making need to be held to account.”

Comments(38)

Mr Blackwell says...
8:17am Tue 18 Jan 11

Why would any private invester take on this laughable fiasco? They'd have to pay back over a third of a million pounds before they can even start to finance taking the project forward.
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Sadly, this current PR exercise seems calculated to result in the ubiquitous 'Due to the state of the economy we've not been able to secure funding' excuse. Then it'll all be buried.

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politicrat says...
8:37am Tue 18 Jan 11

Ok, lets look at this article from an investor point of view: wi-fi saga / beleaguered project / Controversy / severe delays / unfulfilled "promises" contractual expectations / progress that we are sadly lacking.
What investor in their right mind would want to "risk" / invest any sort of money in Digital UK.
I think it is time that Swindon people get together, organise a popular petition and demand that the Council gets OUR MONEY BACK NOW!

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Mr Blackwell says...
8:49am Tue 18 Jan 11

@politicrat: oh dear. The council cannot get back £350,000 that has been spent when Digital City (UK) Limited clearly has no money.
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You can demand all you like, but if there's no money there, you ain't getting a penny back.
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How laughably typical of you that you seem to think a 'petition' may be of worth.

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Robfm says...
8:59am Tue 18 Jan 11

Mr B I think you will find Councillors are now legally liable for their decisions, they can be held collectively responsible for this debt if it can be shown they did not conduct 'due diligence'.

We know from the on going saga that very few in SBC knew about this until it hit the press, and there has been a lot of 'tidying up' done to make it appear a democratic decision to loan the money.

talkswindon.org has a mountain of information about the whole affair.

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Mr Blackwell says...
9:01am Tue 18 Jan 11

Ah, but, no doubt, the Councillors will have plenty of evidence to show they did employ 'due diligence'. Whether they actually did, or not, is another matter entirely.

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itsamess says...
9:07am Tue 18 Jan 11

What remains is there is seems to be less than a remote possibility this can work--or that the money is recoverable. Blind-deaf and arrogant Council.

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Robfm says...
9:10am Tue 18 Jan 11

Any one know if it is in fact working in Highworth, and how many 'commercial' customers they have.

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politicrat says...
9:24am Tue 18 Jan 11

Mr Blackwell wrote:
Ah, but, no doubt, the Councillors will have plenty of evidence to show they did employ 'due diligence'. Whether they actually did, or not, is another matter entirely.
Since when councillors are qualified / certified / licensed to pass-make any financial decisions?

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Mr Blackwell says...
9:31am Tue 18 Jan 11

politicrat wrote:
Mr Blackwell wrote: Ah, but, no doubt, the Councillors will have plenty of evidence to show they did employ 'due diligence'. Whether they actually did, or not, is another matter entirely.
Since when councillors are qualified / certified / licensed to pass-make any financial decisions?
Yet again, I can only imagine you're on the wind-up. Surely nobody could be that stupid.
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Might be an idea to do some basic research into how politics and leadership works in this country before posting here again.

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SockPuppet says...
9:42am Tue 18 Jan 11

Did anyone else notice yesterday the Signal website was suspended?
Wonder whether someone hasn't been paying their bills?
Not going to inspire confidence in investment, I just hope the loan that has been given on our behalf was secured on more than Rikki Hunts reputation.

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politicrat says...
9:54am Tue 18 Jan 11

Mr Blackwell wrote:
politicrat wrote:
Mr Blackwell wrote: Ah, but, no doubt, the Councillors will have plenty of evidence to show they did employ 'due diligence'. Whether they actually did, or not, is another matter entirely.
Since when councillors are qualified / certified / licensed to pass-make any financial decisions?
Yet again, I can only imagine you're on the wind-up. Surely nobody could be that stupid. . Might be an idea to do some basic research into how politics and leadership works in this country before posting here again.
I have demonstrated my point, we have a bunch of elected morons making important financial decisions using public funds without the necessary qualifications and even if they have the qualification we can question the fact that this council has provided Digital UK such amount of money to a company with less than 1 year accounts, why would a council take that much risk & taking such a stake in a new company when we all know that companies are most likely to fail within the first 2 years.

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ZiggyShort says...
10:01am Tue 18 Jan 11

Due December last year? I thought it was due April last year.

Perhaps they're too busy trying to dip into Coate Water than concentrate on promises of wi-fi, college demolition etc. etc.

But at least Regents Street has been dug up and refilled a reassuringly large number of times over this last year....

And the ornamental urinal near the parade is delightful.

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Mr Blackwell says...
10:06am Tue 18 Jan 11

politicrat wrote:
Mr Blackwell wrote:
politicrat wrote:
Mr Blackwell wrote: Ah, but, no doubt, the Councillors will have plenty of evidence to show they did employ 'due diligence'. Whether they actually did, or not, is another matter entirely.
Since when councillors are qualified / certified / licensed to pass-make any financial decisions?
Yet again, I can only imagine you're on the wind-up. Surely nobody could be that stupid. . Might be an idea to do some basic research into how politics and leadership works in this country before posting here again.
I have demonstrated my point, we have a bunch of elected morons making important financial decisions using public funds without the necessary qualifications and even if they have the qualification we can question the fact that this council has provided Digital UK such amount of money to a company with less than 1 year accounts, why would a council take that much risk & taking such a stake in a new company when we all know that companies are most likely to fail within the first 2 years.
You do realise that Gordon Brown Esq was chancellor for 10 years despite not holding a single economic qualification?
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Very few politicians, at any level, hold qualifications specific to their positions.
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It's how these things work.

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mrwoo says...
10:09am Tue 18 Jan 11

As a director of a sucessful IT company I shall not be investing any of my companies money into a scheme that I believe cannot be a commercial sucess. I did point this out to Mr Bluh as did numerous other people.

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ZiggyShort says...
10:12am Tue 18 Jan 11

Should we say "Shoo Mr Bluh, we don't want you!"

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The Real Jarvis says...
10:16am Tue 18 Jan 11

So, when will Cllr's Bluh, Edwards & Perkins be apologising to Geoff Reid, Chris Watts, Komadori and Des Morgan?

Those Cllr's inferred that that members of the public were deliberately misleading others about the WiFi'asco, yet it has been obvious from the start that the only people telling the truth about WiFi were outside of the Councils Cabinet.

Even now the Cllr's responsible are being 'economic' with it.....

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politicrat says...
10:36am Tue 18 Jan 11

Mr Blackwell wrote:
politicrat wrote:
Mr Blackwell wrote:
politicrat wrote:
Mr Blackwell wrote: Ah, but, no doubt, the Councillors will have plenty of evidence to show they did employ 'due diligence'. Whether they actually did, or not, is another matter entirely.
Since when councillors are qualified / certified / licensed to pass-make any financial decisions?
Yet again, I can only imagine you're on the wind-up. Surely nobody could be that stupid. . Might be an idea to do some basic research into how politics and leadership works in this country before posting here again.
I have demonstrated my point, we have a bunch of elected morons making important financial decisions using public funds without the necessary qualifications and even if they have the qualification we can question the fact that this council has provided Digital UK such amount of money to a company with less than 1 year accounts, why would a council take that much risk & taking such a stake in a new company when we all know that companies are most likely to fail within the first 2 years.
You do realise that Gordon Brown Esq was chancellor for 10 years despite not holding a single economic qualification? . Very few politicians, at any level, hold qualifications specific to their positions. . It's how these things work.
You don't get it do you?
Mr Bluh/Swindon council used public money to finance a private company.
Swindon council has used taxpayers money to offer a commercial loan to a privately owned business
Does this not raise issues?

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ListenToReason says...
11:33am Tue 18 Jan 11

It's reassuring to know we have a Conservative council committed to giving Council Tax payers value for money after all the years of Labour "waste". A few more of these hair-brained schemes and the Town will be bankrupt like the morality of some of these councillors.

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active citizen says...
12:35pm Tue 18 Jan 11

A new investor more gullible than the Tory Council!
Can such a person exist?
What next?Liquidation and the loss of the ratepayers cash.
Has Ricky Hunt pledged any of his own assets as a cover for the Council Loan?
If not, why not? The officers seem so intimidated that they are failing if their duty if sensible precautions have not been taken

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cshepherd says...
12:49pm Tue 18 Jan 11

Back in April last year (http://www.swindona
dvertiser.co.uk/news
/8106080.Audit_Commi
ssion_to_review_wi_f
i_bid/) Rod Bluh agreed to ask the Audit Commission to look into this matter. I wonder if they reported before they were abolished? If they didn't was the request to look into this quietly dropped?

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I Too says...
12:54pm Tue 18 Jan 11

3G anyone?

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politicrat says...
1:22pm Tue 18 Jan 11

Funding decision aside, how many jobs in Swindon did this venture create?

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Mr Blackwell says...
1:50pm Tue 18 Jan 11

@politicrat: why do you insist on changing your initially stupid goalposts to even more intellectually bereft comments? Councils make investments in private companies and offer loans, grants and handouts to organisations all the time.
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I've personally never really seen the point of the free (it's not even free, really) Wi-Fi. Anyone with a smartphone has cheap/free mobile access bundled witht their account and most pubs, bars, hotels and shops now offer free Wi-Fi as standard (and that number will only contine to grow). Indeed, in most streets I've walked through in Swindon it's also possible to find numerous open Wi-Fi networks.
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However, I would hope that the Council weren't simply investing to achieve the Wi-Fi coverage. One would hope that the idea was to achieve national publicity for the town and also to position the town as a more modern and forward thinking place to live and do business than most people would currently view it as.
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Swindon desperately needs to do something to reinvent and reposition itself as we move forward. At the moment we have an ailing/failed town centre, a few mass-market, average wage paying large employers and a surfeit of cheap, horrible apartments and budget small houses crammed into unsightly developments with little or no amenities.
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The Wi-Fi plan may, in a best case scenario, have put Swindon on the map for something other than Mondex. Of course, all of that is rather dependent on it actually working...
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The idea behind it may have been fairly sensible, but, clearly, the execution has been risible. As I said initially, it seems hard to see how any private investor will rescue things. If somebody is daft enough, great, we get our money back. If not, well, yes, £400k is a lot of money to waste. Unfortunately, Councils - ours included - waste far more than that on plenty of other things... Wi-Fi is not alone in being a waste of time and money.

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Kineasy says...
1:52pm Tue 18 Jan 11

So what has happened to our money and where is it now?
What tangible assetts does the company have?
If bankruptcy is on the horizon I think we should know the answer to these things.

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Mr Blackwell says...
1:58pm Tue 18 Jan 11

Kineasy wrote:
So what has happened to our money and where is it now? What tangible assetts does the company have? If bankruptcy is on the horizon I think we should know the answer to these things.
£400k isn't much (or enough) for a start-up of that nature. I'd imagine most of the money's gone on salaries, their website costs and the hardware they've managed to get in place in Highworth (any know if that even works or not?).
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They're a limited company, they can pretty much wind it up and disappear whenever they like.

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SockPuppet says...
2:08pm Tue 18 Jan 11

I Too wrote:
3G anyone?
4G by LTE would be the equivalent to WiFi services but it is far more likely to appear in Swindon in the next couple of years than Signal.

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Wellfire says...
2:34pm Tue 18 Jan 11

I think Mr Blackwell has summarised the wi-fi project, it's putative benefits and drawbacks very well. Mr Hunt is not the first businessman, nor will he be the last, to 'go big' on a concept but be undone by the detail. That is often the way with predominantly marketing men. I have analysed many business opportunities for private investors and to be looking for funds to pull the project to where it should have been months ago would certainly raise an eyebrow or two, as does going public that you are. There are means of making contact with private investors and events where entrepreneurs can pitch their businesses to them, all of which I'm sure Mr Hunt knows and has explored. As for recovering monies from individual councillors, I very much doubt that will happen, given the District Auditor's verdict. You may question their decision, but the fact is they did not rule against SBC. Regarding the project itself, in the context of the tech business propositions I have reviewed going back to the dot.com days, it always looked a long shot to me.

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politicrat says...
2:43pm Tue 18 Jan 11

Wellfire wrote:
I think Mr Blackwell has summarised the wi-fi project, it's putative benefits and drawbacks very well. Mr Hunt is not the first businessman, nor will he be the last, to 'go big' on a concept but be undone by the detail. That is often the way with predominantly marketing men. I have analysed many business opportunities for private investors and to be looking for funds to pull the project to where it should have been months ago would certainly raise an eyebrow or two, as does going public that you are. There are means of making contact with private investors and events where entrepreneurs can pitch their businesses to them, all of which I'm sure Mr Hunt knows and has explored. As for recovering monies from individual councillors, I very much doubt that will happen, given the District Auditor's verdict. You may question their decision, but the fact is they did not rule against SBC. Regarding the project itself, in the context of the tech business propositions I have reviewed going back to the dot.com days, it always looked a long shot to me.
Could have been worse.....Mr Bluh and the rest of councillors could have been involved with MOD spending and strat policies review......

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trustnopolitician says...
4:19pm Tue 18 Jan 11

This project looks dead in the water.

It is time for Bluh and all those who supported this venture to resign forthwith.

It is one mistake too many!

There has been a complete lack of leadership on the part of Bluh compounded by reckless decision making.

How about a 50% contribution from councillor's allowances to offset this wasteful loan to a project which seems to be in its death throes.

How about a petition to bring about Bluh's resignation. Could this be organised on line.?

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Mr Blackwell says...
4:34pm Tue 18 Jan 11

That's the clever part, though. By using a mainly private company the Council can simply blame them for the failure. After all, any company can look (and talk) the part upfront. Politicians are often taken in by things that appear to be the right thing but subsequently prove otherwise - Tony Blair and Labour still won another election even after the illegal war in Iraq (all based on lies and flim flam initially).
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One thought has sprung to mind... this could be a very, very clever PR move. IF (and it's a big one!) Ricckiyie and the Council have already got a private investor lined up, what better way to completely confound the critics than to have this article appear and then, within weeks, announce that all has been saved. I read elsewhere that, apparently, the publically promised date for full Swindon-wide coverage is sometime in October 2011. They still, in theory, have 10 months to get it up and running. As Wellfire pointed out, the apparent approach to enticing investors does seem a little 'unusual'.
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It'd be an audacious tactic...

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Grimwald says...
5:24pm Tue 18 Jan 11

I thought we had been told there were other investors or were the Council in the form of Councillors Bluh and Edwards so stupid they allowed the council to be the sole provider? How much has the man Hunt invested and is it true her has been taking a salary of £20k per month. I hope not!!
Anyway, the writing is on the wall and I look forward to those responsible being held to account.

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Robfm says...
6:17pm Tue 18 Jan 11

As the Council got 35% of the company for our money who got the other 65%.

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mug? says...
6:51pm Tue 18 Jan 11

"The firm behind the project is said to be in “positive” discussions"

What, with the voices in RH's head?

The people of Swindon had a chance to get rid of Bent Bluh last may and didn't take it.

sw - deep-okay

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itsamess says...
8:24pm Tue 18 Jan 11

All this debate on here is pointless. The better route would have been to apply for a Judicial Review of the Councils Decision--was it lawful? That dear chaps is the only way you will get to the truth as you will not get it from this Council.

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Just another number says...
6:55am Wed 19 Jan 11

Technology is moving fast enough to make the WiFi project behind the times and pointless before it's was begun. Also, there is a central government project in the works to provide inexpensive computers and internet access that is far more viable and very likely more achievable. And I very much doubt it will raise as many ethical and legal questions as the efforts of SBC and Rikki Hunt.
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Telling the truth is clearly not something Swindon Borough Council is good at, that much is certain, and it shows in every public communication they produce.
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I would suspect much of the truth could be had with a few well written Freedom of Information requests.

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Just another number says...
7:03am Wed 19 Jan 11

Technology is moving fast enough to make the WiFi project behind the times and pointless before it's was begun. Also, there is a central government project in the works to provide inexpensive computers and internet access that is far more viable and very likely more achievable. And I very much doubt it will raise as many ethical and legal questions as the efforts of SBC and Rikki Hunt.
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Telling the truth is clearly not something Swindon Borough Council is good at, that much is certain, and it shows in every public communication they produce.
-
I would suspect much of the truth could be had with a few well written Freedom of Information requests.

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itsamess says...
2:03pm Wed 19 Jan 11

Even well written FOI requests do not get the council to produce documents. I have been chasing down documents relating to one issue for a year as i am certain it was in breach of the law (public law)-in otherwards the correct procedures were not followed and the particular order was made despite it being against a specific law omly enforceable by council staff.
What happens is they produce some that indicate the correct process was followed. Close study shows them to be flawed and why--but the back up information proves difficult to get--the council delays getting them to take it out of time to have the decision Judicially reviewed. They hope you will take it to the Ombudman or other methods of resolution--which means that takes it from the courts. In other words--you will not get all the information you ask for--and its covered by codes of practice--not to reveal anything prejudicial to the council.

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Tony Hillier says...
8:13am Thu 20 Jan 11

wow

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