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SALFORD COUNCIL TO INVEST IN £1.5BILLION MANCHESTER AND STANSTED AIRPORT EXPANSION
 

Star date: 6th March 2018

£10MILLION ALREADY PUT ASIDE BY SALFORD COUNCIL AS IT'S SET TO JOIN £1.5BILLION AIRPORT 'INVESTMENT'

Salford City Council is to borrow money to 'invest' in the £1.5billion 'transformation' of Manchester Airport and Stansted Airport in which it has shares along with other Greater Manchester councils.

In papers relating to the loan, which is set to be rubber stamped next week by the Cabinet, no figure is mentioned. But the cash-strapped Council, currently looking to close five nurseries, has already set aside £10million in its budget for 'Manchester Airport'.

Full details here... 


Next week, Salford City Mayor, Paul Dennett, and his Cabinet are set to endorse a huge investment in the 'transformation' of Manchester Airport and London Stansted Airport.

Both airports are now owned by the Manchester Airport Group (MAG), which is looking for a £1.5billion investment from its shareholders to "secure future business plan growth and the longer term sustainability of the business".

Salford is one of ten Greater Manchester local councils that have a share in MAG. Manchester City Council owns 35.5% of the company and the other nine councils own 29%, with Salford Council's share being 3.22%. The remaining 35.5% is owned by the private Codan Trust Company (Cayman) Ltd (as trustee for IFM), registered offshore in the Cayman Islands.

The report going to Salford's Cabinet next week states that "there is an opportunity
for the Greater Manchester districts to provide shareholder loans" and that "the most cost effective means of securing finance for the loan will be identified".

Nowhere in the report is the actual amount of the loan specified, although the Council does have a figure of £10million set aside for 'Manchester Airport' in its capital budget for the new financial year 2018-19.

Given that the source of the loan has not yet been 'identified' it's not known how much it will cost to service it from the Council's revenue account which supports front line services, like the five nurseries the Council is currently proposing to close.

The report states that, in future years, the Council will get a "direct return on the loan", and that it "should enable future anticipated dividends to be paid". It adds that "Without the capital investment there is a very real risk that the level of dividend payable, which supports the council's budget, will reduce considerably in future years. This would lead to increased revenue budget pressures which would increase future savings targets".

The investment by Greater Manchester councils would be part of a £1.5billion 'transformation' that represents 'the most significant programme of investment ever made in Manchester Airport'.

This would include an expansion of Terminal 2, improvements to Terminal 3, links between the two terminals, better departure gate facilities and 'customer friendly enhancements'. Stansted Airport would get a new arrivals building. The investment, states the report, would "promote economic growth and employment opportunities".

The report concludes that "Any investment decision has to be underpinned by a thorough assessment of the risks involved and a robust due diligence process" and adds that "From the analysis and work carried out, on behalf of the GM authorities, this is deemed to be a reasonable investment".

It adds that "The risks of the potential stakeholder loan have been reviewed on behalf of the GM authorities" – but nowhere does it state what these risks actually are...

The decision will be made by the Cabinet next Tuesday – the same day that the City Mayor is due to be jetting off to the South of France to speak at the MIPIM property orgy event in Cannes (see here).



Felsey wrote
at 15:27:41 on 08 March 2018
Peter allow me to point out the cash on return factor here. Last year John Lewis posted a 4% dividend. That equated to over £450million profit. The same year Salford Council got £3million from Manchester Airport shares (our shares). Comparing these puts our Manchester Airport share value at around £300million. Saying you want to save the Nurseries I suggest £300million now will make Salford Council cash rich. Enough to wipe out debts, save services, pay rise for low paid Care Staff, reclad high rises with the best material without borrowing any cash, wipe out the Salford student debts and invest £4million into each wards local health and wellbeing projects. The choice is as simple as XYZ.
 
Peter wrote
at 11:42:08 on 08 March 2018
Salford own part of Manchester airport and continue to receive a dividend but the funds are not earmarked to be spent on any particular purpose. What is bad about Salford people having a stake in a major local airport. The dividend it receives is used by the council's revenue budget and helps to keep down the council's net expenditure. So I have no problem receiving 5 million last year, 3 million the year previously etc. So maybe the campaign should be to link the dividend with helping keep the nursery's open.
 
LESLEY DUNCAN wrote
at 14:05:28 on 07 March 2018
The sad thing is this does not come as a surprise to most of us when it comes to local Councils, Councillors, projections and investment
 
Arnold Rimmer wrote
at 14:05:09 on 07 March 2018
Seems like a good investment to me. They council got £5 million from dividends from the airport last year. This will make sure they get more in the future to protect us from cuts. A lot of "small picture" people commenting here that don't really understand how investments work.
 
wrote
at 10:25:46 on 07 March 2018
Bob is right we need to get to the bottom of this. What is going on in City Hall. We have 60 Councillors none seeming to object. It is like a Labour-Tory coalision. Salford taking out another loan, jobs at risk, nurserys closing, debt on debt, closure on closure and we see Council workers and Unions sit back and let Salford go down the plug hole. Time to strike against Salford Labour-Tory Council.
 
Bob the regular wrote
at 07:33:54 on 07 March 2018
Why is Dimwit Dennett so keen to invest our cash in Manchester Airport group? If it was such a good deal, the banks would be falling over themselves to put cash in. Buisness investment is not a strong point with our councillors, even the Tory ones. Mark my words, this deal stinks. I am not sure, but I think Salford Council own ,or used to own, Barton airport. There were plans to expand this at one time a few years back. A few years back there was available landing space at London docklands. Don't know if this is still the case. But just think, Barton to London docklands would be a good alternative to Bransons overpriced trains for the 1st class and full fare buisness traveler . Why don't we get our little airport going, and ask others to invest in that?
 
Felsey wrote
at 21:05:41 on 06 March 2018
For the record I am totally against any sending of Salford Council (our) cash into the Manchester or Stansted Airport. I demand a recorded vote of all our elected Councillors on this matter in case a challenge in how agreements affect the vulnerable people in Salford becomes raised. I do see Salford changing. Be quite sure it is a journey that will require many answers. My Doncaster experience and Management qualifications place me well to be the one asking on behalf of everyone in Salford.
 
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