'Why not buy a big wheel' says MP over £50m loan quandary
TORBAY Council should buy a permanent big wheel, Torbay MP Adrian Sanders (pictured) has suggested.
The MP believes it is one way of using a £50million government loan the authority has been saddled with after a bid to hand the money back was turned down by Whitehall.
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Torquay seafront wheel
Torbay would have seen a reduction in interest charges of approximately £2.35million, partly offset by a loss of investment income of around £1million.
Mr Sanders blamed the problem on the previous Mayor, Nick Bye, and argued against borrowing cash before it was needed.
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But he said having 'millions sitting in Torbay's bank account' presented an opportunity as well as a challenge.
Mr Sanders has made a series of proposals for investing the money, which would raise cash for the authority.
His suggestions, which he has presented to the current Mayor Gordon Oliver and councillors, included providing rented housing. In addition to providing much-needed family homes, it would also generate revenue.
Mr Sanders also proposed buying the big wheel so all future income came back to the Bay, as well as opening up office and business spaces for rent to capitalise on the benefits of the Kingskerswell bypass.
Explaining the background to the loan, Mr Sanders said: "Councils borrow through the Public Works Loan Board. It is cheaper than the commercial market. When a loan is offered the government borrows a similar amount through the issue of bonds or other mechanisms.
"The PWLB by statute is not allowed to make a loss, so to cancel a loan of £50million the government would have to pay more than £50million.
"The bottom line is no one should borrow in advance of need. You wouldn't borrow to buy a house before you had agreed the purchase."
Mr Sanders, who with Totnes Conservative MP Sarah Wollaston met with Treasury Minister Danny Alexander to discuss the situation, added: "The problem is of the previous Mayor's making and probably wouldn't have happened if such sums of borrowing had had to be approved by a wider group of councillors.
"However, this situation of millions sitting in Torbay's bank account does offer the present Mayor an opportunity to invest in our future and improve the lot of hundreds of local families.
"If I were in his shoes I would look to investing the money in revenue generating activities."
Mr Sanders met with Mr Oliver and councillors last week.
Mr Sanders said: "Having met with the Mayor I am hopeful he will see this as an opportunity and not just a challenge. Using money to bring in an income stream would have to appeal to any sane or sensible councillor or mayor, rather than paying interest on money they are not using."
A Treasury spokesman said the move would have not represented value for money for the taxpayer. Mr Oliver said the 'privately owned' wheel would be returning and paying a fee.
16 Comments
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by eTorbay
Wednesday, February 13 2013, 4:41PM
“Just for info, I contacted a supplier of big wheels similar to the one here last Summer, this was part of the reply, from a company called technicalpark.com:
"About the price range, I can use our recent installation in Kharkov as a sample, with a 55 meter Ferris Wheel. The price is about 1,8 million Euro EXW. Optional RGB led lighting instead of white led lighting may have an impact of about additional Euro 300.000,-- on the EXW price. Transport takes about 11 trucks (x approx 3.800,-- Euro each) and installation require foundation works that I can't estimate."
Not cheap, but certainly possible with that £50 million loan.
Not sure how long it would take to pay for itself, but with around 2.5 million day visitors and 1 million overnight visitors in the bay each year it would surely have as much chance of turning a profit as any other big wheel around the world.”
by ChasTysement
Wednesday, February 13 2013, 4:33PM
“Unbelievable! Spending it on toys for holidaymakers when we have some of the most deprived areas in the country? Surely not. This is an opportunity to get some much needed regeneration under way. The chance may not come again for years.”
by EdnaFruitcake
Monday, February 11 2013, 10:32AM
“Use the money to build one huge doss house in the middle of Torquay. Give the rest of what's left to the addicts to fuel their addictions. Sort of what the council are doing now but on a larger scale.”
by TorbayFan
Sunday, February 10 2013, 10:40AM
“Why is the council so obsessed by spending on new blue-sky, get-rich-quick, instant-reward schemes? If Torbay needs higher quality facilities, why not use the money to improve what there is? £50 million spent in improving existing facilities would provide £30 million in salaries for the local trades (assuming £20 million goes in materials). That's over 1100 new jobs paid at the UK's average salary and 1100 fewer people on benefits. If the council were to offer the money in grants to local shops, restaurants, bars, amusements etc on a 'match funding' basis (i.e. the council matches the owner on a pound for pound basis) the total spend would double, and the number of jobs created would double. This is not rocket science. It's been done for many years by successive governements and very successfully too.”
by Azriel22
Saturday, February 09 2013, 9:00AM
“Obviously a no-brainer to invest the £50m to get a better return than the net annual loss of £1.35m but to blame Nick Bye is far from honest.
Does anyone really believe the loan agreement was drawn up by the mayor without advice from the recently decamped exorbitantly overpaid chief executive and her equally costly team?
Let's see something in the paper about the advice offered to Bye in the matter as the loan was all about glorifying the council officers accommodation.”
by Cweed
Saturday, February 09 2013, 8:44AM
“Has no one thought of the obvious? We are saddled with this £50 million loan on which we have to pay interest anyway.
But on the other hand we have to make £10 million worth of cuts to all our local services.
Could not £10 million be used to reinstate the cuts and that would still leave £40 million to invest in revenue raising schemes.”
by thisolgit
Saturday, February 09 2013, 2:25AM
“Yet another example of the Forest Gump School of Accountantcy. Clowns. Just how many "Big Wheel" rides would it take to pay the interest on a £50 million loan.”
by RivieraPalms
Saturday, February 09 2013, 12:03AM
“Hi Mansands. Feel free to tell us about you're own ideas! And yes I would love to spend the money on a second prom for Torquay because unlike Paignton and Brixham, we don't have a front with the same opportunities and would literally have to build one.
I was on Rock Walk today and noticed just how far the pier is away from the beach, it starts at the Princess Theater, that's a considerable distance from Torre Abbey Sands so there's plenty of room to widen it, and I think it could represent a golden opportunity for Torquay.
If it means anything I was for the playground on Paignton seafront, and I'm also for the council finding money to keep Shoalstone pool open throughout the entire season. I think the people of Brixham have been treated shamefully over that.”
by ThatsYourWife
Friday, February 08 2013, 8:33PM
“Let's buy a big wheel, a roundabout and some swings. Sounds like the only things you could trust the Lib Dems with financially.”
by Mansands
Friday, February 08 2013, 6:56PM
“@ RivieraPalms ↓ ↓ Looks like you've decided where the money should be spent, any chance of a few quid left over for the rest of TORBAY!”