Unnecessary way to raise shortfall to maintain harbour

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THROUGHOUT his recent press releases, John Wall, secretary of Beadnell Fisherman’s Society, is quoted as saying: “With its share of the proceeds of this development, the Fishermen’s Society will purchase an annuity to maintain the harbour and ensure its long-term survival.”

The Fishermen’s Society has had an average working deficit of around £2,800 per year for the last six years with an average spend each year of £7,000. In 2004, they dispensed with auditors because this was not necessary with such a low budget.

Looking at their expenses for this six-year period suggests there is scope for cost savings, especially on harbour dredging and insurance, although Mr Wall would no doubt dispute this.

However, we can take this deficit, as it stands, and add some perspective. If everyone who signed the petition against these building proposals gave £1, we would have sufficient money to cover the shortfall for one year. If they contributed the cost of a pint of lager it would cover the deficit for three years. But instead of collecting money from willing donors (in the form of subscription-paying associate membership of the Fishermen’s Society?) or considering opening up the harbour to provide additional income sources, or indeed listening to other positive ideas from The Save Beadnell Association, we are presented with nothing short of a multi-million-pound asset grab. The solution is out of all proportion to the problem. Harbour management needs a gentle tweak and we are presented with a coastal tsunami.

The current proposal is to build three luxury houses on fishermen’s land. If these proposals get the go-ahead, each of these plots, before any building, will be worth upwards of £250,000 (based on recent land sales in the area). By rights, the fishermen should get the bulk of this money, totalling £750,000. But, of course, we are forgetting the covenant. Mr Wall will have to buy this out. Let us in our ignorance say a cool £500,000 for that. Which leaves £250,000 earmarked for the harbour.

I cannot for the life of me figure out how or why an ‘annuity’ would be a suitable arrangement for something like a harbour but I’ll give Mr Wall the benefit of the doubt and assume that what he means is a simple method of generating the shortfall of £2,800 per year via invested cash. A sum of around £70,000 placed in something safe, savings account or gilts at four per cent, would yield the required amount and preserve the capital involved. The word ‘annuity’ sends shivers down my spine as it suggests loss of capital, fees, commissions and profits to an insurance company (which could go bust). I will assume that Mr Wall, with his in-depth knowledge of these matters, would steer well clear of these.

If the fishermen’s share of the land sale, after paying for the covenant, totals £250,000 and the amount of invested money needed to cover their annual operating shortfall comes to around £70,000, would Mr Wall care to explain what he intends to do with the difference, approximately £180,000?

Of course, we do not know how much he will be paying for the covenant but if it is less than my guesstimate of £½million, which may well be an over-exaggeration, then it will simply enlarge the difference to be accounted for.

Another point of interest, which graphically illustrates the initial enormity of this whole scheme, is that the original development models showed five houses between the two sites. That would have given a land value of £1.25million if planning had been granted. Five houses would then have reached upwards of £7million at selling prices.

Make no mistake, these are eye-watering numbers which illustrate only too well why the protagonist of these plans is so determined to build as much as he can. And all supposedly justified to fund a harbour deficit of £2,800 per year. Astonishing!

Sir John Craster gave the land in question for the benefit of working people. He specified that he did not want the land developed. It would be immensely sad, not to say somewhat disgraceful, if this generous man had his philanthropic gift hijacked by those who have no claim to it whatsoever.

Jim Norris, Beadnell