You may have seen the badly worded news about the "Council buying Cramlington's Shopping Centre" and the attendant protests about it.
If all were as per the BBC's report I might be tempted to agree, but Jeff Reid , leader of the Lib Dem group on Northumberland County Council has written...
"You may have seen an item in the News Post Leader and on tonight's 'Look North'
about the purchase of Manor Walks, by the council's Development arm, ARCH. I
thought you may be wondering what on earth is going on, especially as a number
of the members of the public expressed concern about the use of council
What the item didn't do was explain what ARCH is, its relationship
to the council and what the council can and cannot do in law.
You may be
aware that the council's sports and leisure centres are managed by an
'arms-length company', Active Northumberland.
ARCH is the council's
arms-length regeneration and development company. It is a commercial company in
its own right but all its shares are owned by the council. The leaders of all
the political parties on the council are on the board, together with other
councillors and private entrepreneurs. Its remit is to look for opportunities
to regenerate the towns and villages in the county by operating in the private
markets that the council is barred from doing.
In the case of Manor Walks,
the council has borrowed money from the Public Works Loan Board at a low
interest rate and loaned it to ARCH at a higher interest rate. ARCH has used
the money to buy Manor Walks from the developers, Hammersons, who currently own
The council is forbidden under law to borrow such money for its day to
day operations, such as running libraries, doing road repairs etc. But it can
borrow money to put into investments and that is what it has done this time,
using ARCH to buy and manage it.
ARCH will pay interest on the loan,
amounting to several million pounds. The council can then use this interest for
its day to day activities - paying staff wages, cutting the grass, road repairs
and so on.
Although this was agreed by council at the beginning of July, I
have been bound by confidentiality not to say anything until the information was
If anyone has any queries or concerns about this, please
I do have concerns about the purchase and voted
against it at the ARCH board meeting. But on balance, it is a good deal for the
council, bearing in mind that at one time all of the rents from all of the shops
in Manor Walks left the county, paid to Hammersons. This way, the rents paid by
all the shops and offices stay in the county."
If only it had been reported that way by the "anti-everyone" press, there wouldn't have been half the complaints.