Annabelle Dickson, Political Editor
Tuesday, April 8, 2014
Norfolk County Council has urged MPs to get the government to help cover the incinerator compensation bill – but MP Henry Bellingham, pictured, has admitted he has found no precedent.
George Nobbs, Labour leader of the council, has written to the North West Norfolk MP and South West Norfolk MP Elizabeth Truss to ask that they take action to stave off further “painful cuts” to services after Mr Bellingham previously said he would mobilise the county’s MPs to seek help if the county council made a formal request.
Mr Nobbs has urged them to convince the government to part with a grant to cover the £30m compensation cost the authority is likely to have to pay Cory Wheelabrator for terminating the contract for the Saddlebow burner.
He said: “Over the course of this saga, you have suggested on a number of occasions that the government may help to mitigate the financial impact of a contract termination on Norfolk’s public services.”
The council will have to pay an estimated £8.36m within two weeks – because termination has triggered payment to the banks to mitigate foreign exchange and interest rates risks. The capped compensation cost of £20.3m and the £1.6m costs relating to the public inquiry would have to be paid in just over 50 days.
Mr Bellingham said he would refer the matter to the Department for Communities and Local Government and the Treasury. But questioned on whether there is any precedent, Mr Bellingham said: “I have researched and I can’t point to an immediate one. All of these things are done on a case by case basis. There is not a case in the courts, or regulation in local authority statute which says ‘if the government takes away money or the local authority in question wants to take out a loan it can do so under a certain regulation’.
“If the government takes money away, even with good reason, it puts a local authority under pressure, so that is a factor. The other factor is whether a local authority, in this case, has got itself into a muddle. The government might turn round and say it is entirely their own fault, but there is a muddle here and the government is the lender of last resort and also has the power to make money available.”
The letter from Mr Nobbs said: “I am now asking formally, on behalf of the people of Norfolk, that you make the necessary contacts at government to make this a reality. I have copied in to this letter all Norfolk’s MPs who may, I hope, be willing to act in concert with you on this matter to secure additional funding that may avoid the authority having to make further painful cuts to front-line services. We ask that support should come in the form of a grant – not borrowing approval – given that the authority is already facing significant reductions in revenue income. Adding to the burden of debt for future generations should not be an option in these very difficult circumstances.”