Middlesbrough Council signs off plans to sell buildings and increase fees to avoid bankruptcy

 Credit: Ian Cooper/Teesside Live
The report asked the council' Executive board to consider the use of the Town Hall in the long term to justify ongoing investment. Credit: Ian Cooper/Teesside Live

A raft of fee hikes and building sales will go ahead after councillors heard it was the only way to save Middlesbrough Council from effective bankruptcy.

The executive board of the council met on Tuesday 21 November and agreed to sign off measures which they heard the previous Independent and Conservative-controlled local council had “shirked”.

The plans were drawn up in response to “critically low reserves” and a forecast £8.5m overspend against the council’s approved budget for the second quarter of the financial year.

Cllr Nicky Walker, Executive member for finance and governance, told the meeting they had inherited a council where the expenditure is exceeding the income.

“What we need to do is bring that back in line with resources we have available,” she said.

The move will see licence fees, parking and several service charges increase from December.

Assets being sold include:

  • TeesAMP business park

  • Viewley Centre in Hemlington

  • Middlesbrough House

  • Middlesbrough Municipal Golf Centre

An asset review report by the director of regeneration and director of finance revealed the proposed sales would bring in an estimated £33m. However, it would also see a reduction in the council’s longer-term income of £1m a year.

Cllr Philippa Storey, deputy mayor and Executive member for Education and Culture, said the council must strive to get the “maximum value possible” for assets they sell-off.

Executive member for regeneration, Cllr Theo Furness said a third party will be used in the sales of the assets and the council will use a “hands-off” approach.

“They will find buyers and when it comes to the sale of assets it will be the best value for the council,” he said. “Our priorities are to protect what residents see as vital to them.

“The decisions we are making are about saving Middlesbrough Council for the people of Middlesbrough and steadying the ship to make sure we have a council to provide the services that everyone needs.”

Decisions, he claimed, were “shirked” by the previous administration.

“We can’t escape the reality that we have been left in,” he said. “For four years we saw reserves dwindle to critical levels.

“We have only been in power for six months and we are making decisions the Tory Independent administration shirked,” he said. If a section 114 was issued, the council would no longer be able to protect assets which best served the communities, he added.

“They will just see community hubs as a loss maker and they will be gone. We are making the decisions rather than decisions being forced upon us.”

A range of other factors have also been blamed for the forecast overspend including demands and rising costs for several services. Most significantly in children’s social care – a predicted increase of £3.1m.

In response to the decision, Conservative MP for Middlesbrough South and East Cleveland, Simon Clarke said the sale of assets must be proven to deliver the best value for the people of Middlesbrough “rather than being deployed to plug holes in a sinking ship”.

Meanwhile, Group leader of the Middlesbrough Independent Councillors Association, Mick Saunders has insisted Labour had inherited “a balanced budget”.

“Yet within months of their leadership, the council faces bankruptcy,” he told the Local Democracy Reporting Service. “Middlesbrough Labour will still not admit it was senior management failings that were responsible for the failings.

“As far as asset sales, Middlesbrough Labour has a disastrous record. The potential revenue lost by Labour administrations in the past is horrendous.

“I do find it interesting that on the list of assets sales which are being considered this Labour Group has decided to hold on to Boho X built under an Independent Administration. Both Cleveland Centre and Captain Cook Centre were purchased under an Independent Administration.”

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