Newcastle Council will spend its way out of recession
May 12 2009 by Adrian Pearson, The Journal
But Mr Shipley said he believed he had no choice but to sign off on the borrowing increasing. He said: “It is vitally important during the recession that we invest as much as we can in the local economy.
“At the moment many jobs will depend upon the council and its ability to borrow money cheaply and invest it in housing and the general city infrastructure. We want to put money into real, tangible projects where people will see a difference soon.”
Mr Shipley faces a situation where money from other sources such as Government grants and planning charges has fallen dramatically.
With the council not up for election this year, the Lib Dem boss has in effect given his party the funds to convince voters to stick with them, with the results of the regeneration borrowing hopefully visible by this time next year.
Labour opposition leader Nick Forbes said the city faced a situation “in which a few officers with taxpayers money in their back pocket can go out and buy up a few buildings and have no need to justify any real gain to the council”.
Mr Forbes claimed it would be difficult to see how many families would benefit from the council spending tens of millions of pound buying up “a handful of empty properties”.
He added: “I’m no against borrowing the money if there is a perceived need, but I would question wether we should have blanket approach to buying empty buildings. They need to stop now and think about the long term implications of spending this much of taxpayers’ money looking to spend it on something instead of having detailed plans for the cash.”
But city treasurer Paul Woods last night said the council was following a sensible debt management policy.
He said: “The borrowing limits the council sets itself gives me a space to work within throughout the year.
“If the Government does not increase our funds then we have the option to use money which we control to support our capital projects.
“This gives us a parameter to work within through the year. And if we decide to do even more prudential borrowing then maybe I will have to go back and ask the council for permission to borrow more, but there is a reasonable margin to work with left here, something like £60 to £70m spare capacity here.”
Mr Woods was last night backed by experts at Durham University.
Professor Joe Painter director of the University’s centre for the study of cities and the regions, said councils had a responsibility to help out.
“Local authorities have to access whatever powers that they have to tackle economic issues.
“In disadvantaged cities and region such as the North East it is incumbent upon councils to do what they can to help residents through a recession.”
