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Thread: 2008 Cash Crisis?

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    Newbie bolshevik's Avatar
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    Default Liverpool asks for culture loan

    What do you think about this story - should Liverpool take out the loan ? Who or what is responsible for the

    budget deficits

    ?

    http://icliverpool.icnetwork.co.uk/0...name_page.html

    LIVERPOOL City Council faces having to borrow up to £20m next year to pay for its year as European Capital

    of Culture.

    The alternative is massive cuts in services, or searching for major cost-cutting efficiencies, councillors were warned last night by

    resources chief Phil Halsall.

    Communities and Local Government Secretary Ruth Kelly is now likely to be asked to allow Liverpool to take out a

    government-backed loan to pay for its culture celebrations in 2008. Normally, Chancellor Gordon Brown’s Treasury will only permit local councils to borrow

    money to pay for projects, rather than one-off events.

    But city council finance managers will argue that Liverpool will reap the benefits of its 2008

    Capital of Culture year for years, making borrowing the cash a credible solution to a potential financial dilemma. If the Treasury allows a loan to be paid

    back over a number of years, it will enable local politicians to spread the cost of the culture programme. Instead of finding all of the money in one year,

    the council would pay off a few million a year until the loan was cleared, softening the impact on council operations.

    Last night, city council leader

    Cllr Warren Bradley insisted that a money-raising formula made sense for Capital of Culture. “There are ways of raising money on assets owned by the council

    to use for Capital of Culture. I would only want any such arrangement to be for a short-term period,” he said.
    As well as potential loan arrangements,

    Cllr Bradley believes the council could raise culture cash by leasing brownfield sites to developers and diverting the cash they pay for the land into the

    culture budget.


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    Opposition leader Cllr Joe Anderson said the council should have been putting money aside since 2003 when it first won the culture

    crown. “By 2008, we will have had five years to save up for European Capital of Culture. It is not as though it has suddenly been sprung upon us.”

    The

    spending dilemma comes as leading Liberal Democrat councillors, helped by finance managers, look at ways of balancing the council books by next week when the

    council meets to fix its budget for 2007-08.
    Last night, with just over a week to go, the gap in the budget stood at £23.6m, a figure that has to be

    reduced to nil by a week tomorrow.

    Next year, the predicted budget gap in Liverpool will rocket to almost £39m, mainly due to Capital of Culture

    costs. The council already knows that it is facing a budget deficit of £32.9m by 2009.

  2. #2
    Senior Member SteveFaragher's Avatar
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    Default What's the best thing to do when you ae skint

    Yeah go out and buy 10 x £2000 robotic peregrine falcons, jsut what the spin doctor ordered

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    Shapers
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    Things look really rosey with CoC dosen't it

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    Default 2008 Cash Crisis?

    Walton Group threat to 2008
    PROPERTY developer Bill Davies is taking legal action against Liverpool City Council over his failed bid to develop a multi-million pound shopping and leisure centre in Chavasse Park. more
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    I think all Liverpudlians were proud of the city having been awarded Capital of Culture 2008 and wanted to support it by not being critical of Liverpool City Council and Liverpool Culture Company and thereby giving the press a big stick to beat us with - but enough is enough! I fear the legacy of CoC will be a very damaging one for the people of this city. Already we have seen cuts in adult education. Even money allocated to a One Stop Shop for Kensington was diverted to pay towards the 08 Place in Whitechapel. Inevitably there will be more cuts to services and more money diverted away from the very people that need it.

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    City’s 08 cash banker
    Mar 28 2007
    by Nick Coligan, Liverpool Echo



    PRIVATE firms could take over the running of council assets to help generate money to fund Capital of Culture.

    Town hall finance director Phil Halsall suggests making “better use of existing assets” is one way of bringing in more than £22m still needed to pay for 2008.

    He mentions Colomendy’s transfer to a private company and rent generated by land leased to the Liverpool One shopping district as examples of how the council is already doing this.

    But Mr Halsall today told the ECHO money saved by Colomendy’s handover would not go directly towards 2008.

    The council is currently investigating various ways to find its £22m contribution to Capital of Culture. No final decision will be made until June.

    And the council is still likely to choose a combination of four options revealed by the ECHO earlier this month, including increased sponsorship and financial support from the government.

    The options are part of a financial plan which sets out the council’s spending priorities for the next few years.

    It will be discussed by councillors on Friday.

    Although the Capital of Culture funding gap is mentioned, the report does not set out a solution.

    Mr Halsall says: “The council is most likely to need a combination of all of these approaches and therefore all are being actively pursued.”

    The council has frequently come under fire recently for not setting out exactly how it will pay for 2008.

    nick.coligan@liverpool.com

    Source: icLiverpool

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    Shapers
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    Quote Originally Posted by Howie View Post
    I think all Liverpudlians were proud of the city having been awarded Capital of Culture 2008 and wanted to support it by not being critical of Liverpool City Council and Liverpool Culture Company and thereby giving the press a big stick to beat us with - but enough is enough! I fear the legacy of CoC will be a very damaging one for the people of this city. Already we have seen cuts in adult education. Even money allocated to a One Stop Shop for Kensington was diverted to pay towards the 08 Place in Whitechapel. Inevitably there will be more cuts to services and more money diverted away from the very people that need it.
    You more or less took the words right out of my mouth. There was a few scousers (meself included) that were critical of this 'award' from the start, but as nearly every talk phone host or journalist from the echo says 'look at the bigger picture, be worth it in the end'.

    But so far all we've seen is infighting from those above us, local scousers with businesses suffering through the big dig, outside contractors, the money wasted on the Tram project and other projects not gone of the ground, like the 4th Grace (though thank god, that was a monstrosity).

    All i have witnessed is old buildings been pulled down round Paradise street turning what was once a unique area into legoland. I really don't see much improvement come 2008.

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    theninesisters
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    Quote Originally Posted by Shapers View Post
    You more or less took the words right out of my mouth. There was a few scousers (meself included) that were critical of this 'award' from the start, but as nearly every talk phone host or journalist from the echo says 'look at the bigger picture, be worth it in the end'.

    But so far all we've seen is infighting from those above us, local scousers with businesses suffering through the big dig, outside contractors, the money wasted on the Tram project and other projects not gone of the ground, like the 4th Grace (though thank god, that was a monstrosity).

    All i have witnessed is old buildings been pulled down round Paradise street turning what was once a unique area into legoland. I really don't see much improvement come 2008.

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    Default Chickens home coming roost to

    Re arrange this well know phrase.....lets ask Mr Halsall (wasnt he named as one of the EvilCabal, didnt his son's band support Status Quo at the summer pops)how many kids need to go to Colomendy to cover the 25 million shortfall.

    Maybe the rest of Britain should go someway to subsidising the CofC just like the rest of the country is going to have to cough up for the Olympics in London, they are already raiding the lottery, 20 odd million is a drop in the ocean, but I do have the feeling that the council thought there would be more "sponsors" than appeared. I mean one of the main sponsors is "Sayers" for god sake, fresh pasties for everyone,so much for healthy eating

  10. #10
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    Quote Originally Posted by SteveFaragher View Post
    Re arrange this well know phrase.....lets ask Mr Halsall (wasnt he named as one of the EvilCabal, didnt his son's band support Status Quo at the summer pops)how many kids need to go to Colomendy to cover the 25 million shortfall.

    Maybe the rest of Britain should go someway to subsidising the CofC just like the rest of the country is going to have to cough up for the Olympics in London, they are already raiding the lottery, 20 odd million is a drop in the ocean, but I do have the feeling that the council thought there would be more "sponsors" than appeared. I mean one of the main sponsors is "Sayers" for god sake, fresh pasties for everyone,so much for healthy eating
    Sayers, the company that laid off staff at there manufacturing plant. CoC's benefits for local people working wonders.

  11. #11
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    Culture year cash crisis deepens

    by Larry Neild, Liverpool Daily Post


    PROPERTY developer Bill Davies is taking legal action against Liverpool City Council over his failed bid to develop a multi-million pound shopping and leisure centre in Chavasse Park.

    It comes as opposition councillors claim a massive loan will have to be found to fund a £29m black hole in the budget for Capital of Culture Year.

    The council’s executive board will meet on Friday to discuss ways of bridging the cash shortage, just months before the big culture year.

    To add to the cash problems, a report to politicians last night confirmed the pending legal action by the Walton Group.

    Mr Davies’s group held an option on the showpiece site but after a lengthy court battle the site was handed over for a rival scheme by Grosvenor.

    While their £920m Liverpool One project has been racing ahead, and is due to open next year, Mr Davies’s lawyers are embroiled in a behind-the-scenes legal clash with the city council.

    A report compiled by the council’s resources director, Phil Halsall, says money saved from the disposal of the Colomendy outdoor children’s centre, in North Wales, could be used to help fund the culture year.

    He also says income to the town hall from the leasing of land for the Liverpool One redevelopment could also be allocated to the culture programme.

    The bulk of the missing millions, more than £22m, relates entirely to Capital of Culture year, a figure made worse because more than £4.4m of private sponsorship has so far failed to materialise.

    Mr Halsall says there are four ways of finding the cash: seeking extra help from the Government and sponsors, cutting the costs of running council services, raising money using capital or making alternative financing arrangements.

    Using capital means selling council land, specifically brownfield sites, taking money from income generated by Paradise Street or the savings from Colomendy.

    But he warned that using capital would need special government permission.

    Last night, Labour leader Joe Anderson accused the Liberal Democrats of mismanagement.

    He said: “Capital of Culture has been in the planning for more than four years, and months away we have this financial black hole.

    “It is bad enough not having arrangements in place, but to talk about using the money saved from Colomendy is rubbing salt into the wounds as far as the children of Liverpool are concerned.

    “We have just finished paying off the loans from the Militant era, and now will have to go to the moneylenders for more.

    “If the Government then refuses us permission to use the capital money, it will potentially be a disaster.”

    Last night, council leader Warren Bradley defended the council’s strategy. He said: “By producing this report, we are being open and transparent.

    “I have no doubt we will deliver the best-ever Capital of Culture and we will find any shortfall by means that will protect services and council tax bills.

    “We have always said we will raise £12m in our culture year, so despite the impression from Labour there is no crisis. People will enjoy our culture year and it is not going to cost them through extra taxes.”

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    Senior Member SteH's Avatar
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    Quote Originally Posted by Kev View Post
    Walton Group threat to 2008
    PROPERTY developer Bill Davies is taking legal action against Liverpool City Council over his failed bid to develop a multi-million pound shopping and leisure centre in Chavasse Park. more
    This is the same man who got a grant to redevlop Exchange Flags and for years the only thing to show was a new sandwich ship and then he failed to redevelop the old post office for years till some sort of compulsory purchase order was slapped on it so the Met Quarter could be developed. Now he's trying to say he could have built on Chavasse Park. He is pure money grabbing evil and holding the city to ransom. incidentally, he lives in tax exile in Monaco.
    Last edited by SteH; 03-29-2007 at 10:36 PM.

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    Senior Member Howie's Avatar
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    No government cash for Capital of Culture police
    Mar 30 2007
    by Ben Rossington, Liverpool Echo

    CASH to pay for Liverpool’s Capital of Culture policing will not be coming from the government.

    At key talks yesterday, policing and security minister Tony McNulty told Merseyside Police and the Merseyside Police Authority there was no cash in Home Office coffers.

    Instead, police will have to turn to the lottery, local businesses or look “down the back of the couch” to find £10m needed to put extra officers on the streets during the celebrations.

    Chief Constable Bernard Hogan-Howe is already in talks with developer Grosvenor over the possibility of private sector funding.

    Cllr Bill Weightman, chairman of Merseyside Police Authority, said: “From the beginning, Mr McNulty made it clear there was no money.

    Story continues...

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    Default Alternative sources of money are needed

    THE impact of European Capital of Culture 2008 upon us all cannot be over-estimated. The number of cranes dotting the skyline and workmen busily laying the foundation bricks are constant reminders of the city's rise in status and opportunity. more
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    Default £20m culture debt TB cleared?

    Jan 5 2008 Exclusive by David Bartlett

    A MULTI-MILLIONAIRE land- owner has offered to plug Liverpool’s £20m 2008 shortfall in exchange for land and planning permission to build a retail park.

    Derwent Holdings, owned by Isle of Man-based property owner Albert Gubay, wants to redevelop its Edge Lane retail park and other property it owns in the area.

    See Grotspots Thread

    In a letter to council leader Cllr Warren Bradley, which has been obtained by the Liverpool Daily Post, Derwent has offered to buy the adjoining Rathbone Road Recreation Ground for development.

    In the letter, one of Mr Gubay’s representatives, Peter Willers, said the offer was “made in good faith to help with the apparent shortage of funds”. Liverpool City Council and Derwent have been in a dispute for a number of years over what form the firm’s plans for the area should take.

    The council is currently locked in a legal battle with Mr Gubay over the state of the derelict Rugs 2 Go and Klaussners stores, the ex-Advent car showroom and a huge pile of rubble, which was once the Traveller’s Rest pub.

    The council has demanded that he demolish the dilapidated buildings and tidy up the sites while they work out a long-term plan.

    A hearing in November was adjourned and is likely to reconvene at a yet-to-be decided date before March.

    The Daily Post was last night unable to contact Cllr Bradley or Derwent Holdings for comment.

    But city’s regeneration leader Cllr Mike Storey said: “The council and its partners have invested a considerable amount of money to improve the quality of Edge Lane.

    “It is disappointing that this particular landowner and developer has sought over a number of months to leave his property holdings in a derelict state. Any negotiations over the regeneration of the Edge Lane retail provision should be done in a proper manner.

    “At the same time, (we) will continue to pursue through the due legal process this particular landowner and developer, who has left his buildings in a derelict state.”

    The council is still currently waiting to hear if the Government whether it will be allow it to fund the £20m Capital of Culture shortfall from sales of land and buildings.

    The letter from Derwent, that was circulated to a number of councillors, stated: “Over the Christmas and New Year recess, we have been giving some thought to our landholdings... in Edge Lane, the Rathbone Recreation Park and the current problems surrounding the 2008 European Capital of Culture.

    “We therefore wish to make an offer of £20m to acquire from the council the Rathbone Road Recreation Park, being the land edged red on the attached plan, and will exchange contracts within seven working days of your agreement and thereafter will complete such acquisition within seven working days of outline planning permission being granted.

    “We will, following consultation with your planning officer, make a single overall outline planning application on our retail holdings in Edge Lane, including the Rathbone Road Recreation Park at a coverage of 45%.

    “Such application will be made within seven days of our exchange of contracts for the acquisition of the Rathbone Road Recreation Park.

    “This offer is made in good faith to help with the apparent shortage of funds as set out in the press and to enable Edge Lane to be redeveloped to the satisfaction and benefit of all.

    “This will also enable all the other current Edge Lane problems to the satisfaction and benefit of all.”

    At the city’s executive board yesterday, leading councillors demanded that Derwent’s “eyesore” sites on Edge Lane be cleared up during the city’s flagship Capital of Culture year.

    Cllr Berni Turner said she thought the site was being deliberately allowed to fall into ruin to force the council into a corner. “Quite frankly, I have thought about stopping traffic on Edge Lane with banners to bring this issue to the forefront.”

    Cllr Paul Clein said: “I think it is outrageous. It’s a key year for the city. Tens, hundreds of thousands of people will be visiting.”

    In the summer, Derwent said its £200m proposals would see:

    Edge Lane retail park demolished and replaced with modern shops and leisure facilities, owith most of the current stores moving into the new premises. Offices and a hotel would also be built;

    A central boulevard through the rebuilt retail park, with views over the city centre;

    The notorious Rugs 2 Go and Klaussner site transformed into housing;

    The derelict Advent car showroom demolished and replaced with leisure facilities;

    Mill Lane’s former factory site in Mill Lane, off Edge Lane, redeveloped into mall industrial units and homes.

    Cllr Paul Brant, opposition regeneration leader, said: “I am deeply concerned that this is an example of the council being pressurised to sell assets because of the financial crisis in funding Capital of Culture.

    “We would have not hesitation in calling in the District Auditor if there’s any hint of property being sold off at less than its real value, and we will be watching the Lib Dems like a hawk on this issue.”
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    2008 debts may force sale of Culture office

    Jan 19 2008 by David Bartlett, Liverpool Daily Post

    THE HOME of Liverpool’s Culture Company could be placed into a charitable trust and sold to help plug the £20m shortfall in ’08 finances, the Daily Post can reveal.

    The unusual option of setting up a charitable trust is being explored by the city council as an option to plug the funding gap for the city’s Capital of Culture celebrations.

    Last night, council officials stressed the preferred option was for the Government to give permission for buildings or land to be sold directly through a process known as capitalisation to pay for the year.

    It comes as new figures show the council faces a £62m hole in its budget this year with a likely council tax increase of around 3.75%, with £20m of that the need to pay for Capital of Culture.

    Yesterday, councillors at the authority’s ruling Executive Board hit out at the Government’s continuing delay in letting the council know whether the city would be allowed to break a treasury “golden rule”.

    The setting up of a charitable trust would see advantageous tax relief applied to buildings, services, or the proceeds of sales put in trust.

    Liverpool Culture Company is based at Millennium House in Victoria Street and it is one of the buildings that could be put into a trust.

    And the Daily Post understands it is not just selling and leasing back council buildings through a trust that is being considered.

    Placing services like libraries or leisure centres in trust is also being looked at.

    The Charity Commission would have to approve any move to set up such a scheme.

    It is understood the option is seen as a last resort, as once set up trusts are very difficult to wind up and the council would lose political and financial control over the new body.

    Last night, the city’s finance leader, Cllr Keith Turner, said: “There is a whole range of potential options that have been put forward by officers as we go through the budget-setting process for next year.

    “At the moment, we are completely focused on working with our local MPs to persuade the Government that they should give us permission to use capital receipts as that is the most simple and straightforward solution, because this is a one-off expense.

    “Obviously, we are also looking at a number of other options and one of the many things suggested is for us to possibly consider placing a council function in a charitable trust.

    “One thing is clear – our Capital of Culture year will be fully funded.”

    Opposition Labour leader Cllr Joe Anderson said: “It has been made clear to me this is an option (putting Millennium House in trust).”

    He said the irony of putting the home of the Liverpool Culture Company in a trust and re-mortgaging “was not lost” on him.

    The council and the city’s MPs are discussing the option of selling off buildings or land to pay for the year.

    This is usually only allowed to help pay for other capital building projects, but the council argues that as Capital of Culture is a one-off, it should be treated the same.

    At executive board, education leader Paul Clein led the protests against the Government for not having made up its mind yet over the issue of capitalisation.

    He said: “We are not asking for a handout, we are asking for a relaxation of the rules. To leave us dangling like this beggars belief.”

    A council spokesman said: “The council is in the process of setting its budget at the moment but no final decisions have yet been taken.”
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  17. #17
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    Opposition Labour leader Cllr Joe Anderson said: “It has been made clear to me this is an option (putting Millennium House in trust).”

    He said the irony of putting the home of the Liverpool Culture Company in a trust and re-mortgaging “was not lost” on him.
    Not lost on me either Joe!

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