SERVICING the debt on the proposed new Civic Complex will cost the Borough Council £2.4million a year for half a century, it has been disclosed.
Council Leader David Jukes revealed the figure at a marathon meeting of the full council last week, but argued the costs would be outweighed by the financial benefits of the scheme.
There was clear dissent among some Conservative members who expressed misgivings about the cost of building a Civic Complex.
The council plans on borrowing £72million, with interest and payment of principle amounting to £2.4 million per annum across the lifetime of the loan.
Cllr Jukes attempted to head off a row over the payment of interest, by arguing the rate of just under three per cent was fixed for the duration and therefore the real cost will be eroded over time.
He said: “It is like taking out a mortgage over 50 years. Five decades ago I took out a mortgage at a fixed rate of seven per cent and the repayments were £24 a month. What is £24 a month today?
“In 50 years’ time the £2.4million we will be paying, at the rate of inflation we have had over the last half a century, will probably be peanuts.”
He pointed to Royal Victoria Place as an example of a development that had faced opposition but now yields £840,000 per annum for the council.
However, almost a quarter of Conservative members eventually voted against approval of the next stage of development, stated in documents to cost £1.95million.
“Can we keep adding housing without improving the cultural and civic offer?”
Tory Cllr Sean Holden, asked for the vote to be deferred and said: “I think there is considerable concern and anxiety as to how we are to find the money.
“We were told by the Director of Finance that he was ‘pretty sure’ he could find the saving necessary for this, but ‘pretty sure’ is not good enough. We need to be sure on this before we spend even more money progressing the project only to find out we cannot afford it later.”
Tory Cllr Claire Stewart said: “We are already in a period of austerity. The income from future economic expansion from housing growth is unpredictable and uncertain.
“We were briefed that some cuts to services may be required to fund the interest for this project. We were told this would depend on the appetite of elected members for these cuts. I have no appetite for such cuts.”
Other members backed the proposal to push on with the project.
Tory Cllr Tracy Moore argued the planned theatre is a ‘key component’ of the council’s five year plan and added doing nothing ‘is not risk free’.
She said: “It will cost £13million to stay in this building and it is still a Town Hall. You will spend that money but the asset valuation of this building based on its existing use, as a Town Hall, is only £4.5million. You do not have to work in the City to appreciate that does not make a lot of sense and is not a good business decision.
“Can we keep adding housing without improving the cultural and civic offer? If we don’t we will end up a dormitory town.”
“This is a unique opportunity for ensuring the vibrancy of the town and supporting documents show experts claim £13 to £15million will be added to the local economy.”
Around 30 out of the 48 councillors spoke during the almost two hour debate.
Ultimately it was a victory for the council’s leadership, with final voting of those present splitting 34 in favour, including Labour members, nine against and the abstention of the two Liberal Democrats.
The nine Tory rebels were Cllrs Holden, Hall, Hannam, Hastie, Stewart, Bullman, Stanyer, Williams and Simmonds.