The Bank of Rotherham

September 15, 2011 11:56 AM

At a time when Rotherham Council is cutting its budget and making some of its employees redundant, you wouldn't think it had any spare cash to splash, would you?

Well, you'd be wrong, because the council who spent £2.9 million refurbishing its Town Hall (including £310,000 on chairs and coverings) has recently spent almost £10 million on furnishing its new multi-million pound offices. But that isn't all it's been using our money for.

The council also seems to see its future in the banking industry. Last year it loaned £5 million to Rotherham College to help build a new state of the art building on its campus. Recently it managed to find another £5 million to loan to Rotherham United Football Club. Yesterday I was interviewed on BBC Radio Sheffield about the council's decision to loan a local businessman £750K to help renovate six buildings in the town. He argued that one of the town's oldest buildings, the former 15th century coaching inn, the Three Cranes, will be part of the plans to rejuvenate the town. The council agreed to loan him this money despite banks refusing to do so on the terms he wanted.

Council taxpayers in the town are not happy, and rightly so. They want to see their money being spent on frontline services, not on expensive refurbishments and loans. The council has said it has guarantees on the loan, which of course means if it could not be paid back it would assume ownership of the properties. At a time when many councils are reducing the size of their property portfolios, Rotherham is potentially adding to theirs.

Putting to one side whether or not they are sound investments (which is questionable) councils are not there to act as banks. Spare cash should be used to help protect front-line services, and fund reductions in council tax. Although all of us want to see our town and city centres flourish, councils can help by reducing car parking charges. The government can assist by reducing the amount businesses pay in corporation tax and business rates. It can look at the levels of employers' national insurance contributions. There are many ways to stimulate the market without councils resorting to loaning vast sums of our money on deals the banks won't touch.At a time when Rotherham Council is cutting its budget and making some of its employees redundant, you wouldn't think it had any spare cash to splash, would you?

Well, you'd be wrong, because the council who spent £2.9 million refurbishing its Town Hall (including £310,000 on chairs and coverings) has recently spent almost £10 million on furnishing its new multi-million pound offices. But that isn't all it's been using our money for.

The council also seems to see its future in the banking industry. Last year it loaned £5 million to Rotherham College to help build a new state of the art building on its campus. Recently it managed to find another £5 million to loan to Rotherham United Football Club. Yesterday I was interviewed on BBC Radio Sheffield about the council's decision to loan a local businessman £750K to help renovate six buildings in the town. He argued that one of the town's oldest buildings, the former 15th century coaching inn, the Three Cranes, will be part of the plans to rejuvenate the town. The council agreed to loan him this money despite banks refusing to do so on the terms he wanted.

Council taxpayers in the town are not happy, and rightly so. They want to see their money being spent on frontline services, not on expensive refurbishments and loans. The council has said it has guarantees on the loan, which of course means if it could not be paid back it would assume ownership of the properties. At a time when many councils are reducing the size of their property portfolios, Rotherham is potentially adding to theirs.

Putting to one side whether or not they are sound investments (which is questionable) councils are not there to act as banks. Spare cash should be used to help protect front-line services, and fund reductions in council tax. Although all of us want to see our town and city centres flourish, councils can help by reducing car parking charges. The government can assist by reducing the amount businesses pay in corporation tax and business rates. It can look at the levels of employers' national insurance contributions. There are many ways to stimulate the market without councils resorting to loaning vast sums of our money on deals the banks won't touch.

Latest Blogs: