Today’s Oban Times has a front page article whose opening paragraph says: ‘Cash-strapped Argyll and Bute Council will have to borrow the £30 million allocated to pay for Argyll’s CHORD programme’.
The point being made is that there is no pot available to pay for the waterfront regeneration projects adopted by the Council for each of the five major towns: Campbeltown, Helensburgh, Oban, Rothesay and Dunoon. With no reserves left, these projects are to be funded by ‘prudential borrowing’.
But borrowing was always openly in the frame, for £7 million of the total.
The question now is, with the Oban Times quoting a total figure of £30 million to be borrowed, what has happened to the money that was already set aside in the capital budget for the portion of the total not be achieved through loans?
The contest that wasn’t
The Council originally set up an expensive competition between the five towns – for funding for waterfront regeneration projects they were to prepare and submit. When it came to the point of decision, the Council ducked the issue and suddenly announced that all five towns were winners – although concerns on the calibre of the submissions at the time made rather a nonsense of this declaration.
Where the money was to come from
The final decision to fund the lot was little less than an even more expensive charade and of course, the questions posed at the time were all about where the additional money was going to come from. A £10 million prize had become a £31 million requirement.
We spent several days in too-and-fro exchanges with the Council to establish this, pointed out where the figures quoted did not add up, got supplementary answers to account for this and finally left it at the point whose details we published in full.
In the this article where we covered the decision and its proposed funding, it was clear that borrowing was a part of the extended funding. The details established at that time, published in the article linked above, were that the Council: ‘had agreed:
- to extend the programme over a fifth year with an additional £2.5 million from the capital programme
- to increase the budget for loans charges by £100,000 over the next five years, thereby providing funding for a further £7 million of capital expenditure
- to allocate £6 million from the capital plan’s unallocated 2012 roads budget to the Oban Development Road.
‘Together with the inclusion of £5.3 million already committed for the development at Dunoon, these actions produce the additional £21 million now made available to fund all five towns’ schemes’.
Questions to be asked
If there is no money at all now, questions to be asked include:
- What has happened to to the money allocated from the capital programme? Of the total of £12.5 million to come from this source, only £2.5 million of this was new money consequent upon the ‘all winners’ announcement.
- Has the Council vired money from the capital budgets allocated to the CHORD project to serve other needs? If so, what were these other needs?
- Assuming that the figure for loans charges will now, post banking collapse, be higher than it was at the end of November 2008 (before that disaster bit down on borrowing) – what are the current charges for the loans requirement on CHORD?
- What is the position with the £5.3 million already committed in Novemebr 2008 for the development at Dunoon?
There is a secondary row, highlighted in the Oban Times article – that the allocation of £6 million to the Oban ‘relief’ road was always hopelessly unrealistic. The final figure, if the road is ever built, is likely to be three times that – as estimated for the Oban Times by Scottish Government sources.
Where does all this leave Oban?
It leaves Oban at exactly the point we said it did when the Council performed a series of as yet unexplained procedural improprieties in arriving at a decision not to proceed with the Oban marina project – going backwards.
The bypass road, which was this important town’s second project in the scheme – was and clearly is going nowhere. The need to scramble something up at high speed to replace the rejected marina project and use up its £900k funding allocation – as a face saving exercise – is highly unlikely to leave Oban with the sort of legacy project envisaged in the original scheme.
All in all, everything about this entire adventure looks increasingly ill-managed. It will be surprising – and inert – if there are not reparations to be made when the local authority elections finally come around.