COUNCIL chiefs have made a U-turn on proposals for loan arrangements totalling £145 million.
The Conservatives say, the Labour-run council’s cabinet, at its July meeting, ‘nodded through’ a plan to conclude two new loan agreements for up to £145 million in relation to hotels in central Manchester and warehouses at Manchester Airport/Trafford.
However, the Tories, who are the opposition group, say that after ‘serious concerns’ were raised by Conservative Cllr Mark Jervis, the Labour administration has said that the new loan agreements will not now take place.
Cllr Jervis said: "The cabinet papers were flawed in describing the new loan arrangements as a ‘novation’ and a ‘regeneration loan update’."
Furthermore, he said the proposed new loans were 'neither straightforward assignments (‘novation’) nor were there any elements of regeneration benefit for Warrington'.
He added: “Labour’s cabinet failed to properly scrutinise the flawed and erroneous arrangements set out in the paper.
"They showed that they should not be trusted to play fast and loose with £145m of borrowed money.
“Residents can have no confidence in Labour’s ability to manage the £1.8 billion of council debt when the cabinet simply nods through proposals without understanding the issues and risks.
“Whilst I welcome Labour’s subsequent U-turn after the Conservative challenge, Labour are likely to have wasted thousands of pounds of council taxpayers’ money in the abortive internal and external costs of preparing the flawed new loan proposals presented to the Labour cabinet. This will include abortive expenditure on external consultants and external legal advisors.
“It is time for Labour to reduce its enormous debt mountain. The Labour cabinet is totally ill-equipped to make decisions on this debt.”
However, deputy council leader Cllr Cathy Mitchell, Labour, says the opposition group ‘had no influence regarding this decision’.