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The continuing saga of the Saddlers Centre

by Ian Shires on 24 April, 2018

They say that politics is a dirty game and following recent events it’s easy to see why people might think that.

No, I’m not talking about Donald Trump with his finger on the nuclear button, or the continuing Brexit saga which rumbles on causing stress within the Tory Cabinet and dismay from both sides in the country at large. I’m referring to the proxy debate that has been gaining momentum in the local press and on social media about Walsall Council’s decision to buy the Saddlers Centre. An investment which incidentally has already brought in over half a million pounds in less than 9 months. That’s half a million pounds which can be invested back into much needed services.

What I find particularly sad is that some long serving Conservative Councillors are deliberately setting about trying to confuse people by mixing statistics to suit their own ends. By this I mean pitching cuts in the Revenue Budget (ongoing recurring costs, year in, year out) against Capital Investment (a one-off payment from the capital account). The two are as different as chalk and cheese.

Putting this into terms that we can perhaps all understand, at home, heating and lighting bills are ongoing regular payments which you make monthly, or quarterly, that’s ‘Revenue’. Other things such as replacing windows or a heating boiler are one-off payments from the capital account. It’s the same for the council and each year the budget has to balance.

The reason why some services have been cut is because the Government as part of its ongoing austerity measures, has reduced how much money it gives the council each year. Many think that Council Tax pays for the bulk of Council services. Far from it. Council Tax provides around 17 to 18 % of what the Council spends. The bulk of the rest comes from Government grant funding.

Councillors don’t cut services for some perverse reason like they enjoy it. They do it because they have to. The books have to balance. If they don’t then the civil servants step in and make the cuts.  Walsall Council’s Revenue Account has been slashed by almost 35% over the past five or six years. By 2020 the Council will have around £200 million less to spend because of the Conservative Government’s continuing austerity measures.

So, is it any wonder that residents get confused when opposition councillors feed misleading information through the press, deliberately mixing up revenue monies with capital investment?

Buying The Saddlers Centre was a decision taken by the administration in order to make a capital investment into what is a prime location in the heart of our town. There are also well advanced civil engineering works in progress to continue the electrification of the rail line beyond Walsall linking it into the Trent Valley line. This will open up rail connections with London and the North. On getting off the train the Saddlers Centre will be the first thing that visitors will see as they come off the train and out of the station. It is the gateway into our town.

In private ownership the regular income from the rent off the shops usually ends up in the pockets of the shareholders. The private sector owners decide how much or how little to invest in the upkeep and appearance and development of the Centre. They don’t live in the town, they are only interested in how much they can earn from it.  To them the Saddlers Centre is just one part of a wider portfolio of properties. It has a capital value on their books, if it makes a loss on the revenue side because of empty units then it can be written off against tax in their accounts.

In Council ownership, The Saddlers Centre will give you as residents a stake in the future not just of the Centre but it will give you as residents a stake in the future of our town. A chance to influence the development of the train station and the wider town centre. How often have you said the town centre, your town centre, has too many empty shops? What is the Council doing about it? Well this administration is doing something about it. In buying the Saddlers Centre it is not going to leave things to chance, it is going to take the initiative giving you a stake in the future of your town.

In order to make the purchase the Council took out a loan over 5 years through the Public Works Loan Board (PWLB). The PWLB is a statutory body operating within the United Kingdom Debt Management Office (DMO) which is an Executive Agency of HM Treasury. The function of the PWLB is to lend money from HM Treasuries ‘National Loan Fund’ to local authorities.

Local Authorities are able to borrow money from a number of sources, and do not have to rely solely on borrowing from the PWLB. However, the interest rates offered by the PWLB in the vast number of cases are significantly lower than those available from other institutions such as banks.

The loan against the Saddlers Centre is over a 5-year term. It can’t be extended. So at the end of the term the Council has options. It can take out another loan or it could opt to sell the Centre. Clearly that decision will be taken at that time, based on economic and market conditions at the time.

The action taken by the current administration is not rocket science. Walsall is not alone in taking such decisions. At the time of the purchase the Conservative opposition could have ‘called in’ the decision for further scrutiny. They could have chosen to be at the Cabinet meeting to hear the rationale behind the decision. As Councillors they have the right to sit in on decisions taken in private session. They chose not to. The decision having been made to purchase The Saddlers Centre could, as already pointed out have been ‘called in’. It wasn’t.

One of the most vociferous voices against the decision in recent months has been that of the MP for Walsall North who is also a Councillor for Streetly Ward in Walsall has recently been reported in the local press as saying that he has been refused the detail of the loan. Clearly this is not correct because as a Councillor he has access to such information.

In conclusion I would leave you one thought. If Walsall Council doesn’t show enough confidence to invest in our town centre, then who will?

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