What do you think about this story - should Liverpool take out the loan ? Who or what is responsible for the
LIVERPOOL City Council faces having to borrow up to £20m next year to pay for its year as European Capital
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
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.”
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.