North Lancashire Green Party have published a heavily critical assessment (below) of the Canal Corridor North scheme as proposed to the City Council on October 31st 2017 (see minutes(link is external)), calling it ’20th century, at best’ and calling for substantial changes to make it future-proof. Their report to Council on these proposals was ‘exempt’, which means that councillors are not supposed to release details to the public.
Cllr Jon Barry told us that he challenged the exemption ‘gagging order’ but was voted down. Conservative councillors had already released some of the details and tabled an amendment that would mitigate the Council’s expressions of support for the financial aspects of the scheme (Read our earlier report “Conservatives to back outline Canal Corridor development plans“). But both were voted down and the Council then passed the motion to support the proposals, in principal, including the ‘key financial asks’ of British Land(link is external) (BL) and the level of investment BL required of them.
Now, following the release of some details of this scheme(link is external) by the Labour-majority City Council itself in early December 2017, North Lancs Green Party say that they feel morally obliged to release some of the alternative arguments.
They argue that “This report does not contain all the detailed financial information – thus, we do not believe that any of the information below is commercially sensitive.” They also point out that the scheme will be considered again by Full Council in 2018 before a final decision is taken, by which time the proposals in the scheme may have changed.
Reading between the lines it does appear that BL won’t touch the scheme unless their profit on key elements of it is assured by Lancaster City Council, regardless of whether these are commercially viable. As the report below explains, the inflation-linked upwards-only rent deal would be similar to the one the Council negotiated for the Indoor Market building. At that time, in 1995, inflation stood at 2.6%(link is external) and was falling, but by 2011 it had doubled to 4.8% and the Market was losing the council an agonising £500k a year. Buying itself out of the 99 year lease cost the Council a further eye-watering £13m, plus the costs of consultations and studies dating back to 2003 as it tried to find alternative ways out.
In 1975 inflation was 24.5%. So you can see the problem; a period of inflation, whether caused by growth or instability can push the rent up – and then the rent stays unmanageably high when inflation comes back down. At present it’s low, but no-one has a clue how high or low it might go, and for how long, over the next 30 years (In 1923 it was -14%). It’s only fair to add that the Indoor Market’s problems were compounded by a 99-year lease on a badly designed-for-purpose building with poor access. Traders had complained about the design but their warnings fell on deaf ears and the trap was set. By 2001 only a handful of them were left, and their rents and rates were already more than 4 times higher than on Morecambe Market. Then the inflation rate started to climb.