Following an important Government decision to alter the way business rates are redistributed to local councils, Salford’s ruling Labour cabinet has now realised that the twenty-four million pounds it promised to the BBC as an incentive to come to Salford Quays will not now be recovered by the City by was of increased business rates - as was the situation when the contract was signed. The business rates payable by all tenants at Media City will now be distributed to every local authority in England and Wales instead of nearly all of it coming back to Salford.
The twenty-four million pounds is made up of a contribution to the BBC Philharmonic Orchestra of twenty million pounds, plus four million pounds towards the extension of the Metrolink line into the proposed Media City where the BBC will be housed.
Councillor Ian MacDonald, the Conservative opposition spokesman on finance and Deputy Leader of the Opposition on the Council, commented:
“This is an enormous blow to the City. As a result of this decision by the Labour Government, Salford City Council taxpayers are faced with an extra two million pounds bill for 2008/9, which will increase year-on-year until the full twenty four million pounds are paid off. The breathtakingly annoying thing about this is that the Labour Government decision has presumably been made with the full knowledge and consent of the Minister for Local Government, Salford’s own Labour MP Hazel Blears.
The Opposition Councillors were not made aware of either of these contributions until late on. The Conservative Councillors’ view of the wisdom of this enormous investment would, I believe, have been very different if we had known that the financing was not coming from the additional business rates - as we were informed at the time - but from the normal Council Taxes”.
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