Blackpool Local Government Branch

On July 27, Blackpool Council (BC) declared that it will loan £5 million to The Pleasure Beach to fund a £10.3 million development. This is on the back of the announcement in June that up to 261 of its employees (now reduced to 70) were to be thrown onto the scrap heap, following reductions in funding from central government of £5.6 million.

When asked why the loan had been given to The Pleasure Beach, Leader of the Council, Mr Peter Callow, said "What better place to put our money?"

After being consistently lectured that the authority was broke and, therefore, unable to honour workers' contracts and maintain much-valued services, many are outraged at this blatant disregard of the value of Council workers.

An enraged member of staff said: "'Have I been dreaming or hasn't our country just gone through a financial disaster on the back of risky investments? For the Council to be investing all this money in risky capital ventures, with absolutely no guarantee of getting any of the money back in the current economic climate, whilst cutting essential services and making honest public servants redundant, is absolutely scandalous.'

A BBC reporter asked the Leader of the Council how such a huge loan could be afforded when local authorities are making cuts. Cllr Callow said: "We borrow money, we lend money and when you lend money you get it back with interest." Asked if the Council would lose money if it flops, Callow replied, "'It won't flop at all. But if it did, in the unlikely event that it did, we are well covered financially."

Council record of financing the private sector

So what of the idea that the Council will profit from its loan? The track record of its decisions regarding major attempts at regeneration in Blackpool would hardly leave tax payers brimming with confidence. Below are some recent examples:

• The Sandcastle has received four rounds of loans. The latest - earlier this year - was for £2.5 million, estimated to create six jobs. This has, of course, been dwarfed by the loss of jobs for workers Council-wide. To underline the point further still, the authority still hasn't recouped the money it put into building The Sandcastle in the first place.
• The Talbot Gateway could now be scaled back significantly following the withdrawal of regional funding. It was financed by public funds from various sources but BC has already spent £millions on lawyers and on officers' time trying to bid for funding and finalise legal agreements with the private developer.
• The Tower, Winter Gardens and Louis Tussaud's Waxworks were bought with £38.9 million of public funds, including an incredible £10 million from the Council's own coffers. It also had to borrow £millions for approximately one month whilst it waited for the Government funding to arrive. The cost to the Council Tax payer is a fortune in interest payments.

To justify its decision, the authority claims that the project will be 'revenue neutral' over its lifespan. The lifespan it has in mind, however, is 30 to 50 years. It is a scandal that the same consideration isn't given to the long-term value of employees performing socially useful jobs, such as helping the unemployed back to work and assisting vulnerable families, as well as supporting young people and those with disabilities.

£5 million loans while BC staff are made redundant

Millions are to be spent on developments for which there is no guarantee that the return will be as expected. While The Pleasure Beach, and the firms that will operate the Council-owned Tower and Winter Gardens - Merlin and Crown Entertainments respectively - take advantage of the generosity of Conservative councillors, the Council continues to push ahead with plans to make approximately 70 people redundant. This stands in marked contrast to the recent statement from the local authority when it said, in justifying making the £5 million loan, "In these tough economic times we need local jobs for local people."

The redundancies have been justified by the authority as necessary measures to cut back on their expenditure. Such a reduction in spending is merely the first wave of a tsunami of cuts expected in the autumn. It is evident that even when BC declares that it has saved much-needed services, it has done this by making substantial cuts across other areas, including getting rid of the Alley Gate service, taking almost £100,000 out of the Extended Schools budget, and almost £400,000 from the Education budget.