Thursday, 1 February 2018

Tory budget puts thousands of jobs at risk

Over 2000 jobs at risk by 2021 as Tories plan to sell off Arch assets and transfer wealth from South East to rural North and West

Northumberland Conservatives have presented their first budget which has been branded as a 'slap in the face to council workers, services and South East Northumberland' by Labour group leader Grant Davey. 

He's pointing to decisions taken by Tories in the county since May 2017 as 'instrumental in creating a £65m black hole in council finances. The black hole means that 2048 jobs are at risk if spending and waste isn't reigned in. Labour are accusing them of 'financial skulduggery' as they prepare to sell of Arch assets worth over £330m. Labour are also pointing to the Arch company accounts which have been filed by 'Arch hater' Cllr Richard Wearmouth who is chairman of the company along with fellow director Cllr Peter Jackson, the Tory leader and significant landowner. Cllr Jackson is said to own 5000 acres of land. 

The council's budget marks a milestone after local Tories have decided to halt the sale of County Hall and refurbish the ageing building at a staggering cost of over £38m. This is despite claiming that County Hall 'just needed a lick of paint' in the election campaign. The Tories also decided to ditch Labour's plans to save over £30m which was contained in the last budget and this has contributed to the Tory £65m black hole. They also decided to let the former CEO go with a payoff said to be £1.5m and hire a new part time CEO at £189,000 for two days work.

Labour group leader Grant Davey said

"It's now becoming clear that local Tories have serious questions to answer and the 3rd rate political witch hunt against Labour in Northumberland is designed to distract from their own serious issues. It's a scandal that over 2000 council workers will pay for Tory misrule in just 9 months with their jobs and that the Tory's plan to flog off Arch in what is being described by some as a 'fire sale'. We need transparency not their 'secret society' as they seek to borrow £21m for a 'start up business scheme' which is shrouded in secrecy. Tory decisions are costing Northumberland residents dearly with 8% real time rise in council tax over the next 2 years with more tax increases and service cuts in the pipeline. It's also clear that the South East of the county is being targeted by rural Tories like Cllr Jackson and he needs to be clear about his plans by sharing them with the whole county. He could start the Transparency agenda by publishing the recently filed Arch accounts on the council website in a prominent place along with the EY audit report which has cost taxpayers hundreds of thousands of pounds. His decisions since May 2017 are now under the spotlight and thousands of council jobs depend on his answers".  

Notes for Editors

·         The council has been given permission to utilise £30M from its reserves of £137M by its external auditor to fend off the cuts. The supposed use of £8.1m leaves a shortfall to be filled by Job Cuts valued at £56.9M.

Ave cost of employment in the LG sector this year has risen due to inflationary factors and all authorities have now completed JE so it stands a £27,300, LGA Figures.  That means 2084 average FTE’s will have to be removed by 2021.

·         Arch update from Company Accounts signed off by Cllr Richard Wearmouth

·         The turnover of the company was doubled to over £22m generating a profit of £5.5m.

·         The companies assets grew to £320m after repayment of any debt and tax this would generate a profit of £59m to the people of Northumberland.

·         The Chairman sites a number of achievements by Arch including; A £1m contribution to the Leisure Charity Active Northumberland, over £143m of private sector inward investment being attracted into the county creating some 461 jobs and major property developments (themselves providing local jobs) being completed across the length and breadth of Northumberland.

·         The accounts clearly show that the company continues to provide hundreds of homes for our families, thousands of jobs occupy the commercial buildings owned by Arch and millions of pounds in income are being generated.

·         So why does Cllr Wearmouth also state that in the next year the assets of Arch will be sold and the company dissolved. Could it be the conservatives have a buyer lined up for Northumberland’s Development Company and its assets? 

·         This is why we need TRANSPARENCY not third rate political witch hunts. 

Arch loans - the Facts 

1.      Average rate of borrowing for any loans borrowed after Arch's inception 2012 onwards is 0.78%

2.      So that plus MRP is 2.5% + 0.78% = 3.27%

3.      But the rate applied in the council report is as follows

4.      £14.3m/£269m which = 5.32%

5.      Can the council explain the difference between 5.32% and the actual rate of 3.2%? 

6.      Have the council and Arch under the Tories heard of CIPFA and 'false accounting'?


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