In January, we were told we’d be paying £2.2m a year on repaying the Bristol Beacon refurbishment overspend. That figure, however, was based on an interest rate of 1.5% provided by Bristol City Council.
The current public works loan board interest rate is closer to 6%.
This is unsurprising seeing that inflation has been over 10% over the past two years. Even at times of low interest, the best interest rate the council negotiated was 1.65% over 50 years.
In January, Cabinet approved a further £23m loan for the Beacon, and EY reported on how much it would cost the public. The council haven't requested the loan from the PWLB yet but the lowest interest rate in August was 4.85% with other rates as high as to 6%.
So how high will the actual repayments be? Can we expect a figure closer to £8m a year?
The current estimated Net Present Value of “the project is estimated to be -£119.7 million which represents a significant financial loss on investment and primarily reflects BCC’s capital outlay position,” say EY. That figure was based on the 1.5%. It will be interesting to see if the loss increases as the true value of the repayments comes out.
Background
The initial cost of the refurbishment project was estimated at £52m with the Bristol City Council paying £10m of that. Then, the costs escalated.
A clue that things weren’t going well came up in 2018 when Green cllr and business lecturer Clive Stevens, raised concerns during cabinet. He worried that the business plan was either non-existent, not appropriate or both. He suggested the cabinet decision to fund the Bristol Beacon be delayed until all the information was available.
Councillor Cheney reassured him that they did not need any help.
The mayor, Marvin Rees, attacked him aggressively for wanting to build the arena at Temple Island.
Rees says, “the numbers will come to light very soon and you’ll be able to look at those”.
He was almost right. The complete numbers have not seen the day but we know we will be paying back millions for 50 years. The question is, how many millions a year?
And how many public services are being sacrificed for the lack of planning by our cabinet and mayor?
References
The current interest rates
https://www.dmo.gov.uk/responsibilities/local-authority-lending/current-interest-rates/
The current data, which has monthly spreadsheets for loans to local authorities
https://www.dmo.gov.uk/responsibilities/local-authority-lending/current-data/
My FOI to the PWLB about loans to Bristol CC
https://www.whatdotheyknow.com/request/loans_made_to_bristol_city_counc#incoming-2366472
The cabinet meeting: https://democracy.bristol.gov.uk/ieListDocuments.aspx?CId=135&MId=10185
They want more for themselves and less for everybody else, but I’ll tell you what they don’t want. They don’t want a population of citizens capable of critical thinking. They don’t want well-informed, well-educated people capable of critical thinking. They’re not interested in that if it doesn’t help them. That’s against their interests. That’s right. I said it
A discraceful state of Affairs Joanna
Local campaigners are regarded and treated as ‘The Enemy’ By the Cabal and Synchophant Councillors for raising issues when all they want is to be the ‘critical friend’ helping to get it right.