A Swindon Borough Council employee has explained that "human errors" led to his becoming a director of a company chosen to provide a public Wi-Fi system for the town.
Swindon Borough Council, former Swindon Town FC chairman Rikki Hunt and software-as-a-service (SaaS) company aQovia announced plans in November to provide free internet access to all the borough's residents through a Wi-Fi mesh network run by Digital City UK. Hitesh Patel, the town's business transformation chief, was involved in the procurement of the system and became a director of Digital City UK before the contract was finalised.
According to minutes of a council meeting on Wednesday, Patel said that Digital City UK had made a mistake in registering his appointment to its board. He said that he had intended to act as a temporary representative for the council on the board until a permanent member was selected.
Patel also apologised for updating his business social networking profile to say he was a "main board director" of Digital City UK, saying this was a "poor choice of words [and] potentially misleading".
"I hope that... you will be reassured that the council's reputation and credibility remain intact and that these mistakes were genuine human errors that have now been corrected and will not recur," Patel said.
The Wi-Fi deal, initially proposed by Hunt in January 2009, was finalised in October the same year. Patel told the council meeting that in September he had agreed to "pre-sign, but not date, an application to become a director of a 'shelf' company titled 'DM56 Limited'," at Hunt's request. He said he had agreed to do this in case DM56 Limited was "needed for some operating eventuality that we collectively had not foreseen".
"My understanding was that this was a contingency measure, to be invoked, in consultation with the council, if required to speed up the setup arrangements for Digital City (UK) Limited," Patel said.
He added that he did not know until March 2010 that the application had been filed with Companies House, making him a director of Digital City UK.
In a 12 March apology to Patel, Hunt said he had removed Patel as a director of Digital City UK. "I would like to formally apologise for my error in sending the forms off prematurely. I hope I have not caused you any embarrassment," Hunt wrote in a letter, which was presented in the council minutes.
Patel also acknowledged that he had updated his social networking profile in December 2009 to say he was a Digital City UK director.
"My intention was only to convey to my external network that the level of my contribution on the project was with Digital City board members," he said. "I accept that this was an error on my part. It was a poor choice of words, potentially misleading, and I apologise for this."
Swindon Borough Council made a £450,000 loan to Digital City UK, which "underpins the Wi-Fi agreement", according to council leader Roderick Bluh. However, the loan was not developed by Patel, but by other council employees, Bluh told the meeting.
The loan "represents the council's share of the deal" and will help finance the installation of the Wi-Fi mesh network, Swindon Borough Council spokesman Kevin Burchall told ZDNet UK on Thursday. He added that the project had never gone to tender because Hunt and aQovia had "approached the council with this concept, which was free Wi-Fi with a business model attached to help pay for it, and the feeling in the council was it would not have been appropriate to go flogging their business idea to other parties".
"We made the loan with commercial rates — the council gets a 35 percent stake in the company," Burchall said. "If any profits are made, then the council is entitled to a 35 percent share of those."
When the public Wi-Fi project was announced last year, Hunt said that Digital City's business model was based on reselling paid services over the network. He said this model would help the network succeed where other UK metropolitan Wi-Fi schemes have failed.
So far, the Wi-Fi scheme has only gone live in the Highworth area of Swindon. According to a Wednesday article in the Swindon Advertiser, of the 3,800 households in Highworth, 500 are using the free service. Of the 1,000 businesses in the town, only a dozen have signed up for Digital City UK's paid services.