Conservatives call for Transparent Accounting

The Council’s Revenue expenditure, including pay awards, is leaping ahead of the ability of Taxpayers to pay.  Colchester City Council, like many Councils, is looking for revenue earning Capital investments that will provide sustained income to support the provision of front-line services in future. However, across the Country there have been some spectacular failures where the risks of these ventures were unacceptably high, and the projects have crashed leaving the local taxpayers to pick up the bill for decades to come.  

Cllr William Sunnocks, Conservative Spokesman on Resources said: "It is essential that Councillors and taxpayers know of the risk, and understand the consequences if things go wrong.

Colchester has one project in this category - the Northern Gateway. Very few of its financing details have been made public, other than it will cost £65m, with Turnstone Estates as the developer. The Liberal Democrat Administration and their Labour Party backers says it will retain the freehold of the site and have agreed a set of complex financial transactions to fund the development. This is the first danger signal. None of these transactions appear in the Council’s statutory accounts, and we don’t know what the impact will be. We do know that the cinema, which constitutes a quarter of the Northern Gateway development, is to be leased to Cineworld, an operator which has been in financial distress for some time following COVID.

It is clear that most of the risks and rewards of the development accrue to Colchester.  The developer’s job will shortly be finished and the funder, Canada Life, wants clean index-linked annuity income.  If the scheme does well, then so will Colchester.  But if it struggles then Colchester’s general fund will have to pay the shortfall on the lease payments. This shortfall will be deducted from the Council’s ability to provide front-line services."

Colchester’s Conservatives demand increased transparency: and improved financial discipline in relation to such investments to protect the interests of the City's taxpayers.

This article is one in a series of how a Conservative Administration would run Colchester Council more effectively and more efficiently.

 2023-07-21