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Cherwell’s Reckless Investment in a Struggling Shopping Centre Leads to Cuts in Services and Increased Charges for all Cherwell Residents

Cherwell District Council announced it’s budget last week detailing £4.4m in cuts and extra charges that it will be imposing on the residents of Cherwell as well as an increase in council tax.

During the budget debate I raised my concerns that around a third of these cuts and charges were as a result of losses incurred over the past two years in Banbury

In a nutshell the centre is predicted to make a loss of around £1.6m in the 21/22 financial year after having made a similar loss in 20/21.  On a broader scale, taking into account some small gains in the first 2 years the council owned the development, it will have racked up losses in the region of £2.5m by the end of the next financial year if the current predictions are correct.  To close the gap left by that hole in the budget there have been additional service cuts with around a third of those in the forthcoming budget directly attributable to pressures from Castle Quay. 

You may have seen some of this in the press this week in Oxford Mail and the Banbury Guardian

I was also interviewed by BBC Radio Oxford, although my section was recorded and heavily edited, after which Cllr Tony Ilot ,the Lead Member for Financial Management & Governance on Cherwell District Council, was invited on the show live to respond.  If we’d been on at the same time I might have pointed out that as the councillor responsible for this development it would have been more encouraging had he bothered to do his homework before coming on.  At one point he seemed uncertain about how much the losses amounted to (he guessed at £1.3m and the interviewer had to correct him that it was £1.6m) and he also claimed that the £1.6m was a cumulative loss since the council took ownership.  It’s not, it’s just the predicted loss for the forthcoming year on top of a similar one for the last year. You’d think the Lead Member for Financial Management & Governance might have been a little more cognisant of the situation given the scale of problem, but this lack of concern over important details is a familiar theme with Cherwell’s Conservatives.

Cllr Ilot also seemed quite laid back about the fact that the centre is now worth less than half what was paid for item having lost a whopping £30m in value.  They are also currently spending even more than the original purchase price for the shopping centre on the canal side extension which, as a retail analyst myself, I think they are going to struggle to make a return on.

You can listen to the interview in full here 

The council’s line on this has been that the losses at CQ have not directly resulted in an increase in the council tax. As that increase was already in the pipeline anyway that’s probably fair to say, but it also fair to say that if this white elephant wasn’t providing such a huge financial drag on the council’s resources, we may not have needed to increase the tax and we certainly wouldn’t have need many of the cuts in services.

It will be interesting to see how much support we get for the high street in Kidlington and the Exeter Close project in the light of all this.  Certainly something we can point them to if they start penny-pinching on our project to support the eye-watering amounts of public money that’s being poured into one scheme in the far north of the district that we’re all footing the bill for.

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My response to Cherwell District Council’s 2021/22 Budget

At the full meeting of 22nd February Cherwell District Council passed their budget for the forthcoming financial year. I spoke in the debate criticising a further lack of response to the climate emergency and highlighting the pressures that the council’s reliance on commercial investments have placed on its finances, in particular its ownership of the Castle Quay shopping centre in Banbury.

I’ve long been a critic of the decision to risk council tax payers money by investing in a shopping centre that was already starting to show signs of distress. It was a quite ludicrous decision at the worst possible time, just as the retail economy was collapsing. As a retail analyst myself I’m acutely aware of the pitfalls of investment into retail space with provincial shopping centres being some of the most challenging developments to achieve a viable return on now.

I and fellow members of the council have been excluded from the so-called cross party advisory group on the management of Castle Quay which is entirely composed of Conservative and Labour councillors. Labour supported the purchase of Castle Quay in 2018 for £63m with a further commitment of a similar sum to build a canal-side extension, including a cinema and a hotel.

Looking at the figures in this budget we can see that around a third of the financial pressures are a result of losses attributed to Castle Quay. Even if the council’s own optimistic predictions are correct, by the end of next year Castle Quay will have returned a loss of around £1.9m since the council took full ownership.

The value of the centre is now around half what was paid for it, amounting to a whopping £30m loss of equity in an investment backed by council-tax payers money!

Of course all this is now being blamed on the pandemic, but that’s only part of the story. This was always a reckless investment, and that recklessness has now translated into service cuts for everyone in Cherwell.

Whilst I agree that councils should be the drivers of town centre regeneration, that needs to be evenly distributed. Ownership of Castle Quay is likely to produce only dubious benefit to the people of Banbury with a potentially massive financial burden that will be felt by every Cherwell resident for years to come”

As a retail analyst and adviser, I made my misgivings about the public purchase of a struggling shopping centre clear to the council, even before I was a councillor, but was ignored.

I knew there were already signs of problems on the horizon with several of the major tenants of the scheme, not least Debenhams which recently collapsed into administration.  That failure is yet another problem that is about to hit the beleaguered development when lockdown is lifted.

The much vaunted opening of Lock 29 indoor market in the space previously occupied by one of the other failed anchor tenants – BHS – is yet to prove itself viable.  While I support the inclusion and encouragement of many of the smaller enterprises that were invited to trade there, it’s notable that the major occupier, Happerley, pulled out last year after only 3 months. 

I have asked several questions of the council about Happerley’s involvement with the scheme and the due diligence that went into licencing that company to trade there in the first place.  Those questions remain unanswered.

I originally supported the extension of the scheme with more canal-side restaurant and leisure uses, but as time has gone on it’s becoming apparent that even that is a dubious move. One of the major parts of the development is a cinema, and we are already seeing a market shift there with several of the large cinema operators closing venues and some going into administration

Little focus on climate change

We’ve just had a taste of the pressures a global catastrophe can place on our finances.  In the coming years, ecological threats will make the pandemic look like a mini-break.  Yet 2 years into our declaration of a climate emergency, we have another budget with very little progress towards tackling that threat.

The last budget had a tiny percentage of spending dedicated to the ecological emergency and even that wasn’t fully honoured.  This one has just 5 short paragraphs – less than a page of vague aspirations with no real commitment to anything.  Added to that we’ve increased charges for making homes more energy efficient, the very thing we should be encouraging!

Last year’s budget was billed as Cherwell’s “greenest budget ever” yet many of the pledges made then remain unfulfilled, not least the promise to convert lighting at Bodicote House to LED which would have saved the council money as well as helping to save the environment.

On top of that we also have increased building regulations charges for thermal upgrades to buildings and for the installation of solar panels. These are the very things we should be encouraging residents and businesses to do. Many councils don’t charge at all for Solar Panel installations

It’s becoming clear that Cherwell’s ruling Conservative members simply don’t understand the meaning of the word ’emergency’.  We need to be taking bold steps towards tackling climate change, but the Conservatives would rather simply box tick and greenwash with projects that are either not of their making or are never completed. 

The huge financial commitment that is now being poured into the new waterside development in Banbury could have gone towards renewable energy schemes that would have both helped with climate change and returned a regular profit for the council instead of the losses we see from Castle Quay now. 

Unfortunately due to the short-sightedness and fiscal incompetence of the council’s political  leadership we are now committed to a path that I think will just bring further financial misery to the residents we should be working to protect.”

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An Open Letter to Ian Hudspeth, Leader of Oxfordshire County Council, About Proposed Budget Cuts

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Dear Mr Hudspeth

I was the Green Party Parliamentary Candidate for Banbury in May. I’ve met you a couple of times, the most recent being after the public meeting held in Banbury Town Hall as part of Oxfordshire County Council’s consultation process on the proposed additional £50m cuts to local services.

So it was with great interest that I read your correspondence with David Cameron, splashed across national headlines last week, which painted a clear picture of a Prime Minister with only a tenuous grasp on the realities of the demands he has made on local authorities such as Oxfordshire, where he also happens to be an MP.

At the meeting we briefly touched on the magnitude of the savings being demanded in the context of our national finances. I made the case that with a national debt of £1.56 trillion – nearly half of which was added by our Conservative Chancellor during the tenure of the last government – a deficit of £83bn and annual interest payments of around £43bn, saving £50m from local authority spending was the equivalent of trying to pay your mortgage off by skipping breakfast once a year.

Whilst these cuts will have virtually zero impact on the debt left to future generations, they will have a huge effect on those who depend on the front line services being withdrawn. In particular on adult social care facilities and the children’s centres you plan to close which were amongst Mr Cameron’s principal concerns.

Your reply to me was that we all had to “do our bit”. Well it seems from your response to the PM that ‘our bit’ has already been well and truly done.

As a local politician expected to deliver on these impossible polices, I’m sure you know that they are economically illiterate. Cuts to social care will impact on the health service as a whole. Cuts to support for young people have potential effects on social order. Cuts to public transport have serious implications for the workforce and people in isolated rural communities.

I hope you’ll agree with me that there’s a point where cuts can no longer be the solution to balancing the books. Personally I think we’re already well beyond that line in the sand.

So I’m confused by your own position on government policy, given that you continue to publicly affirm that you share Mr Cameron’s blind faith in the blunt instrument of austerity as the answer to all our problems.

You’ve also made much of the statistic that 2% of the county’s population consumes 50% of the finances. I’m sure the old, the sick and infirm are a great drain on our public services, but in a modern society surely those people should expect to be looked after by those of us who are better able to do so.

Do you feel perhaps that this 2% should be prepared to support the more lavish spending plans of our government in other spheres? The wasting of hundreds of billions to allow us to play our part in a thermonuclear Armageddon maybe. Or vanity transport projects that will allow people to get from London to Birmingham 15 minutes faster, when Oxfordshire County Council has just voted to cut local bus subsidies in the county.

Should Oxfordshire pensioners be made fearful of putting their heating on this winter but be comforted as they shiver in the dark that they are ‘doing their bit’? All this while the government you support hands over £5.9bn to private oil and gas companies – a figure well over a thousand times greater than the cuts we are being asked to make – and slashes support for local renewable energy projects, meaning we will miss EU emissions reductions obligations and become the only G7 country to increase spending on fossil fuels.

I really feel that you have to come down on one side of the fence or the other here. You can’t continue to support the cuts in public whilst apparently opposing them in private. As leader of the county council, the people of Oxfordshire deserve an unequivocal statement of your aims and allegiances.

You will no doubt be aware that Mr Cameron’s intervention in Oxford has now prompted requests from over 100 other councils to have a similar direct consultation with him over budget pressures. He also faces accusations of ministerial impropriety over his intervention with you.

So perhaps now would be a good time for hard-pressed council leaders such as yourself to make a firmer stand. You could set an example and refuse to pass what you have already told the PM is an impossible budget to balance in any morally defensible way. I know such actions come with potential repercussions, but if other council leaders followed your lead, how many mutinies could Westminster really handle? This could be your place in history calling!

Alternatively you could join the drive for the abolition or raising of the now outdated 2% referendum threshold on council tax increases. As you hinted at in your letter to Mr Cameron, selling the family silver can only plug the gaps for so long. If we want well funded local services, we should all be prepared to pay ‘our bit’ for them. Polls carried out by the Oxfordshire Green Party, The Oxford Mail and at your own consultation events have shown that people would be prepared to pay more council tax if they saw the money going to essential services.

Of course this would require the government to square the circle of increasingly expensive public services without any rise in taxation. But if they truly believe in localism, councils should surely be free to set their own local levy, unhindered by ideological thresholds dictated by central doctrine.

I think the people of Oxfordshire would welcome your further engagement with the PM on their behalf and with local activists on these matters. I personally look forward to your thoughts on how best to capitalise on what has now become a national talking point, and how we can use this new focus in the best interests of Oxfordshire residents and other similarly concerned groups across the country.