NDR cost may hit services

This story was in yesterday's _EDP_. Congratulations to my Green Party colleague Andrew Boswell for his detective-like work on this issue, work that is now paying dividends:  

http://new.edp24.co.uk/content/news/story.aspx?brand=EDPOnline&category=News&tBrand=edponline&tCategory=news&itemid=NOED08%20Sep%202008%2008%3A26%3A49%3A980

 

Norwich bypass cost may hit services

SHAUN LOWTHORPE

08 September 2008 08:26


Spending on council services in Norfolk could be cut to help pay for the £116m Norwich northern bypass - if the cash cannot be found from elsewhere.

Transport chiefs have set out to the government how they would be prepared to fund the 20km road.

The county council has earmarked £69m from the east of England's regional roads funding pot, but still faces a shortfall of nearly £50m.

On July 14, the ruling cabinet agreed it would meet any shortfall by borrowing on the open markets.

But it has now emerged that, two weeks later, senior officials wrote to the government that the authority would consider reprioritising capital schemes and defer some of the schemes it would have paid for by borrowing - freeing up the cash for the road instead.

Green city and county councillors, who have unearthed the letter, accused the authority's cabinet of keeping the public in the dark over the matter and are furious that councillors have not been told about the pledge - which they say lacks any democratic mandate as councillors have not been given any chance to have a say on it.

But the ruling Tory cabinet insisted no decisions had been taken and accused the Greens of clutching at straws to see the scheme shelved.

In a letter to the Department for Transport on July 30, Paul Brittain, the council's head of corporate finance, said he was satisfied that the council had the financial capacity to fund any shortfall up to £47.5m for the northern distributor road (NDR).

"In a worst-case scenario, if the council was not successful in attracting any further funding, it could borrow, on a prudential basis, the remaining £47.5m," he wrote.

"Based on a long-term borrowing interest rate of 4.95pc, this would incur an additional revenue cost of £4.25m per annum. The county council's 2008-09 net revenue budget is £537.148m and the additional borrowing cost would represent less than 1pc of the revenue budget.

"In council tax terms, the additional revenue cost of £4.25m represents an increase of 1.33pc but, dependent upon the phasing of the scheme and the timing of payments from the [regional roads funding pot], it is possible that this tax increase could be spread over more than one financial year.

"In practice, if the county council did not attract any further funding towards the scheme, it would also consider the reprioritisation of other capital schemes within its capital programme," the letter added. "The county council could, if required, decide to defer other capital schemes that would have been funded from borrowing and, in this way, reduce the extra amount that would need to be borrowed to fund any shortfall on the NDR."

Since then, the ministers have provisionally earmarked £21m of community infrastructure cash towards a greater Norwich plan at Postwick which would help pay for the first phase of the road to be built.

And last month, Mike Jackson, head of planning and transportation, declared that ministers had a vested interest in seeing the road built because it was crucial to the success of flagship policies on housing and ecotowns.

Green Party County councillor Andrew Boswell said the funding approach would have major impacts on other council services such as schools and care for the elderly. And he accused the cabinet of telling the government one thing and the council another.

"If crucial services for Norfolk people like schools for our children and care for our elderly may have their capital budget reprioritised in the future, then the 74 county councillors who are not in the cabinet should be told, as should Norfolk residents," he said.