December 5 2013 Latest news:
Thursday, October 17, 2013
The plug being pulled on the contract for an incinerator in Norfolk could have a “devastating” effect on services, council leaders have warned.
Libraries, fire stations and children’s centres would all face closure if the controversial contract for Cory Wheelabrator to run a burner at King’s Lynn is severed, claimed Steve Morphew, Norfolk County Council’s cabinet member for finance.
His comments come after a group of cross-party councillors unveiled what they say is an alternative to the agreed deal for the Anglo-US Consortium to run an incinerator at Saddlebow, which the government had awarded waste credits for.
The councillors, including UKIP leader Toby Coke, say it would be cheaper to send waste to be incinerated in Amsterdam, and a full council debate on the future of the burner will be held on Monday October 28.
The secretary of state is yet to make a decision on ratifying the planning permission the council’s own councillors agreed to award.
Council officers have said if he rejects the plan, the council will have to pay just over £20m in compensation to Cory Wheelabrator and say the figure could be much higher if, as some councillors want, the council pulls out.
And Mr Morphew warned the council, which already needs to save £189m over three years, could face the prospect of being told its budget cannot be set because it is illegal if compensation costs rack up.
He said: “The effect on services of lopping even the very lowest estimate of compensation at £20.3m could be devastating to services.
“Compensation is classed in the rules that govern councils as day-to-day spending so we could not borrow the money. It would have to come off front line spending and would be due 40 days after the contract was terminated. There is not enough in reserves to take the strain.”
Mr Coke said: “Steve is right to say that, as things stand right now, this is what they are likely to see, but we have 10 days before the debate and we are going to be looking at ways of mitigating this.”
He said MPs were being asked to help, with one option being to ask the Treasury for permission to capitalise the £20m, so it could be repaid over a 20 years.
Dismissing any idea that the government would step in to help, Mr Morphew said: “There needs to be a reality check - and the reality is that a decision to cancel the incinerator comes with consequences that are extremely serious and deeply unpleasant.”
Conservative leader Bill Borrett said: “The decision in the first place to go ahead was based on financial sense and I’m not surprised the current administration, faced with making grown-up decisions, is making the same conclusion.”