Tuesday, May 6, 2014
Plugging the funding gap created by Norfolk County Council’s incinerator compensation bill could mean district councils lose out on a second homes council tax windfall, less money is spent fixing roads or fewer books are bought for libraries.
The county council voted by 48 votes to 30 to terminate the contract for the proposed incinerator at King’s Lynn at an extraordinary meeting last month.
That left the council having to figure out how to make £8m worth of further savings to cover the likely £30m compensation cost to Cory Wheelabrator, which would have built and run the controversial plant.
The council had already built up a compensation war chest of £19m and had identified £3m from underspends, but officers have now proposed how to cover the rest of the costs.
Some of the money will come from further underspends; £1m from cash which had been set aside for organisational change; £290,000 clawed back from the Icelandic banks; a £500,000 contribution from the council’s arms-length company Norse and £700,000 from the sale of council property.
But officers are recommending two options as to how to save the final £1m. One option would take £900,000 from highways maintenance and spend £140,000 less on library books.
The other would make up the missing £1m or so from about half of the money from council tax on second homes which the county council currently gives to district councils.
That suggestion has angered Nick Daubney, leader of West Norfolk Council, who said that more than £750,000 was currently used to try to raise educational attainment in the borough.
He said: “They’d always said in their budget they were going to phase it out. Now they say they’re going to do it straight away to pay Cory Wheelabrator, it’s not appropriate.
“That money made a big difference to local schools. It was extra training for heads and teachers.”
George Nobbs, leader of Norfolk County Council said: “Nobody wanted to have to find this money and we always warned this process would not be without pain.
“Our finance team has done its very best to minimise the direct impact on services for Norfolk people. However, no matter how much we have tried to minimise the impact, it would be foolish to pretend that there won’t be some cuts that will hurt.
“It will be for the council itself to consider these options. All of these are cuts we would not wish to make. We have done our very best to find ways of dealing with this.”
He said, if the council did decide to take the money away from what district councils currently get from the second homes council tax that the amounts removed would be “proportionate”.
West Norfolk Council currently gets £782,000; North Norfolk Council £934,664; Breckland £117,118; Broadland £103,629; Norwich £81,869; Great Yarmouth £110,500 and South Norfolk £137,409.
The £30m compensation bill consists of capped compensation to Cory Wheelabrator of £20.3m, contractor public inquiry costs of £1.6m and exchange rate and interest rate related costs of £8.36m.
The latter costs are likely to have to be paid by the middle of this month, while the rest will have to be paid by July.
The council had already spent £3.5m procuring the contract and £1.7m to buy the site at Saddlebow. That means taxpayers will have paid close to £35m with only a derelict site to show for it.
• What do you think of the incinerator saga? Write, giving full contact details, to Letters Editor, Prospect House, Rouen Road, Norwich NR1 1RE.