'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.
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.