Council considers borrowing another £30 million
Honestly, when I first heard this, I thought that it was a practical joke. However, I can assure you that this recommendation from the Council’s Cabinet members is most certainly not a joke and if agreed by full Council may become a reality very soon.
The Council have over the past few months outlined various reductions in their future revenue stream which undoubtedly forces the Council to examine alternative means of securing sufficient funds to retain the existing level of services it offers. The latest of which is reduction in the New Homes Bonus, a scheme whereby the Council is financially rewarded for the number of houses that are built in the borough.
I’m not questioning this, I totally accept that this is the case and Councils up and down the Country are all facing similar problems. So, we have to do something, doing nothing isn’t an option.
However, I am struggling to equate the deficit in New Homes Bonus with the suggestion that we, the taxpayer, should risk borrowing a further £30 million for some as yet unknown and unquantifiable series of new business ventures. A figure for which I can see no obvious relationship, one that appears entirely arbitrary. Precisely as it did the first time around when the Council subsequently discovered, entirely by chance of course, a golden opportunity right under their noses, with a £28 million investment opportunity in the Sittingbourne town centre regeneration project.
Cllr Roger Truelove (Labour) commented “When we ask the Conservatives what the new £30 million is for, they say it is only a facility in case a good investment opportunity suddenly emerges. This was their formula response for the first £30 million when it was transparently clear that it was intended to part fund the Town Centre regeneration. It is noticeable that whenever the Town Centre project is promoted it is referred as the £57 million scheme. So, let's do the maths.”
Many, myself included have been critical of the Council’s decision to invest our money in the Town Centre project. A complex project which I consider to be a comparatively high risk venture, especially compared to some of the alternatives provided by Cllr Monique Bonney (Independent) who has a proven track record in this arena. If it really were just about generating a secure future income stream, most of us would have gone along with the tried and tested, something with a proven history of delivering, rather than the highly volatile and uncertain future that this speculative development offers.
There is a reason why investors wanted a higher return that the scheme offered. Yes, the Council might well be happy with the lower promised returns promoted, but there are simply no guarantees. This could go either way and with less of a margin to play with, this is a gamble and a big one at that.
Cllr Mike Baldock (UKIP) told us “The Swale Tories now seem punch drunk on the excitement of spending fantasy money from LaLaLand.”
“We haven't had any rational or financially literate explanation for the first tranche of borrowing, so to see them already planning further debt is quite frightening. And if they are so set on borrowing like this, perhaps they could at least address some of the concerns of local people rather than simply continue their speculation games and risk the future viability of this Council.”
Cllr Duncan Dewar-Whalley (Conservative) who is the Cabinet Member for Finance & Performance explained “In local authorities the decision to have the option to borrow legally has to be taken at Council and it makes sense to do that at the budget Council meeting.”
“Council has agreed £30m and this will be substantially taken up by the Sittingbourne Town Centre project.”
“Asking Cabinet for the facility to borrow a further £30m means that if really good investment opportunities come along which can be funded at no cost to the Council tax payer and help meet the Council's regeneration or housing priorities then the borrowing may be used. There would have to be a full report to Cabinet to draw down any further borrowing.”
“And as the budget report makes clear this is a facility. We are not saying we will borrow £30m.”
I find it interesting that Cllr Dewar-Whalley claims that such ventures will be funded at no cost to the tax payer, whilst that may be the intension, no business investment is guaranteed success particularly in the long term.
The resulting public unrest over the town centre investment has spurred the Sittingbourne and Sheppey Labour Party into setting up a petition in protest. Members gathered in Sittingbourne town centre on Saturday with their clipboards at the ready to ask the Council to "think again" about the strategy of borrowing as much as £28 million to invest in the leisure part of the Town Centre scheme.
So what might we do instead, Cllr Mike Baldock (UKIP) suggests “We could have some council housing - if Quinns aren't buying up whatever land there is first - or greater investment in the Borough's Tourist offer - a proven way to bring jobs and money into a local economy but which our Cabinet just keep knocking into the long grass.”
“What we really need is a Council run by people who consult with local people, are honest with the electorate about their plans, and who focus on real improvements to our High Street and on investing in our proven assets. The pipe dreams of the Tories seem to be becoming seasoned with more exotic and more dangerous ingredients.”
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I find this report highly unusual, the Labour Party complaining about borrowing money. Truly wonders never cease LOL.
Comment by Mike Walters Independent on 07 Feb 2017