Ministers accused of letting Liverpool down over culture cash

Mar 6 2008 by David Bartlett, Liverpool Daily Post

LIVERPOOL council leader Warren Bradley last night accused the Government of letting the city down in its flagship Capital of Culture year.

His outburst came after the Government said it will reconsider plans to plug the £20m hole in Capital of Culture finances by borrowing money or selling assets through a process called capitalisation.

But the offer is only open if the council resubmits an application for capitalisation as part of a wider package of measures.

“This is an absolute kick in the teeth,” said Cllr Bradley.

“We are the front door to the UK this year, I would have expected the UK government to allow us to use our money in this way. We can’t run this city on a wing and a prayer.”

The row came as the council approved its tax for the coming financial year – an increase of 4.9%.

When police and fire precepts are taken into account, householders will be paying an extra 4.8%.

Band A householders will now pay £964.25 per year – an increase of £44.79 – while those in Band D will pay £1,446.38 – a rise of £67.19 for the year.

Last night, opposition leader Cllr Joe Anderson said the budget was another example of the administration not delivering on its promises.

“Ten years ago, this administration was elected promising financial stability and now it has a devastating deficit of £62m and 200 jobs are being lost.

“This council is bankrupt of ideas, morally bankrupt and on the verge of bankrupting the city.”

He added he was confident the Government would reconsider the case if the council met the criteria.

Ministers are relenting on past refusals of capitalisation after the District Auditor raised “serious concerns” about underlying financial problems at the council.

In a letter forwarded to Cllr Bradley, Local Government Minister John Healey said “tough choices” would be required, and the council must restore sound financial management.

If that is done, it would give the Department for Communities and Local Government “a new context for considering a further capitalisation application for Liverpool”.

“Of course, any new application would need to be considered on its merits.”

“I have asked officials here to offer whatever help we can to Liverpool council.

“But the next step on capitalisation will need to lie with the council itself, which needs to see whether it wants to make a new application and on what grounds.

“The success this year as European Capital of Culture is important to the Government, as well as having great potential to boost Liverpool’s reputation, regeneration and social and cultural life.”

Cllr Bradley said Mr Healey had “shut the door” on capitalisation for Capital of Culture, instead of indicating that if the council got into “financial difficulties” he would consider it.

The budget approved last night states that capitalisation remains the council’s preferred option, but included a “Plan B”.

Plan B involves turning to Liverpool Direct, a joint venture with BT set up in 2001, for help.

Liverpool Direct has agreed to double its sponsorship of the Culture Company from £2m to £4m, but has said the new £2m must be repaid if the council terminates its contract early.

The venture has also agreed to help the council juggle money between accounts to free up £8m.

Of the remaining £10m deficit, around £7m would come from reserves and £3m from cash set aside that was no longer needed.

THE council has plugged a £62m hole in the budget with a variety of cuts, efficiency savings, and increase in charges.

About 200 jobs will be axed – but the council is hopeful the majority of these will be through natural wastage or that employees will be re-deployed in other departments.

Liberal leader Steve Radford succeeded in moving an amendment to the budget that will see the council exploring ways of speeding up the sale of land and buildings to invest in crumbling council buildings.

He hopes an additional £4.5m can be raised.

OPINION: PAGE 10

davidbartlett