Cost threat to regeneration
Jul 21 2008 by Adrian Pearson, The Journal
REGENERATION schemes set to revitalise parts of North Tyneside could be under threat as the credit crunch forces finance chiefs to look at their sums again.
Opposition councillors have warned elected mayor John Harrison is heading towards a financial blackhole as the council continues with a multi-million pound Whitley Bay revamp.
The cost of the seafront regeneration scheme is to be met in part by the sale of some council land and assets, property that was expected to fetch £18m three years ago. The worry now is that with the property most likely to have fallen in value since then, the council may have to raise taxes and go further into debt to support the scheme.
Conservative councilor Michael McIntyre, who chairs the finance sub-committee, has told the council’s cabinet that it must start to look again at the value of property if it wants the authority to avoid job losses or cuts to other services.
Mr McIntyre said: “I think there are parallels between the Labour group in North Tyneside and the Labour Party nationally. They have spent while things are good but not put aside money for the bad times.
“We’ve got this huge Strategic Investment Plan but no up-to-date information telling us how we can afford it.
“If the land proposed for sale does not fetch the amount needed, and very few properties are still worth what they were three years ago, then the council will have to look at other ways of raising the money.
“This has big implications for jobs and council tax. One way Mayor Harrison may consider filling the gap is in borrowing, which could have disastrous consequences for the council.
“We are already paying back around £16m a year to cover our current debt, and if that rises you can expect to see council tax go up.
“The council must start now a programme of revaluation to see just what the impact is going to be of the credit crunch.
“It is wrong for the council to carry on as if this were not happening and fail to notice the warning signs.”
Both the Spanish City site and the Playhouse are key to North Tyneside Council’s £60m Whitley Bay seafront regeneration scheme.
But the council has insisted it is already carefully monitoring the situation.
A council spokesperson said: “Through the council’s strategic investment group, cabinet members and officers are closely monitoring any potential effects on income from sale of land or property.
“The council is still working to its agreed plan on regeneration of Whitley Bay.”
