The i360 proposals make financial sense and would benefit taxpayers
5:00am Wednesday 5th March 2014 in Letters
There seems to be a lot of confusion and misunderstanding about the “Council loan” for the i360 that is being discussed at the Policy and Resources Committee meeting tomorrow. Perhaps I can cast some light on this.
The loan will be provided by the Public Works Loan Board (PWLB), a body set up some 200 years ago (yes, amazingly enough it was established permanently in 1817) with the aim of providing capital funding for public bodies. Commercial banks being unable or unwilling to finance public investment is clearly nothing new.
Virtually all PWLB lending nowadays is to local authorities over the UK, ranging from the biggest cities down to small parish councils. For example, just since November, Greater London has borrowed £55 million, Sheffield £27 million, Leeds £15 million – and a couple of parishes have borrowed a tiny £20,000 apiece. Total new lending in 2012/13 by PWLB was more than £3.1 billion to nearly 200 different local authorities.
The PWLB treats the loans commercially and has to be satisfied that the business case is robust and sustainable, and will produce enough income to repay the loan.
Typically PWLB funding is used for shopping centres, visitor and conference attractions, leisure facilities and so on.
Brighton Council will also make around £1 million profit each year on the loan – it is lending on to the i360 at a higher rate than it pays the PWLB – which seems a good deal to me as a council taxpayer.
Much more information is available on the PWLB website and the council has set up a useful Q&A on its website.
Lastly, can I say how keen the West Pier Trust is for the i360 to go ahead. The scheme will earn us an annual rent which we will plough back into our heritage plans for the site – this includes researching the feasibility of a contemporary sea-based structure.
After decades of drift, finally something can actually happen.
Steve Pavey, Treasurer, West Pier Trust