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Wednesday, October 10, 2007

The tax payer will have to bail out the airport - letter to the Echo and Councillors

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Dear Editor

In Peter Jacques letter on 25th Sept he claims “The airport's assets will always be greater than its liabilities, borrowing to finance any improvements will, in no way, affect council taxpayers and there'll be no need for any future bailing out." We have down loaded a copy of the airports accounts from Company’s House for review against his statement.

These accounts show the net assets of the airport are only £2,518,273. The business plan estimates that expenditure will be £2.19 million, but this estimate has not been validated and could easily rise to up to £3million. Furthermore, the airport only has £406,437 cash in hand, so the development will have to be funded entirely through borrowing.

As the total loan will most likely be higher than the assets, then the council tax payer will have to back the loan. Given the warnings of economic recession and escalating fuel prices, then if the business that the airport is relying on does not materialise, then the council tax payer will be left to pick up the bill. Alternatively, if the airport has to comply with environmental concerns such as restricted opening times, it will limit its revenue and increase the likelihood of requiring a council tax bail out.

It is clear that what ever way this development is viewed, it is bad for the council tax payer. They will either suffer increased noise and pollution, or have the risk of bailing out a failed investment.

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