Tory manifesto questioned as Arch remains a really hot issue

From the construction of a new council HQ in Ashington to the £78million purchase of Manor Walks, the name of Arch is never far from the headlines.

By The Newsroom
Saturday, 25th February 2017, 2:00 pm
Updated Tuesday, 28th February 2017, 11:40 am
Manor Walks Shopping & Leisure, in Cramlington.
Manor Walks Shopping & Leisure, in Cramlington.

Proponents will say that it is also building homes, business premises and hotels in the likes of Alnwick, Berwick and Amble, but critics say it is a risky use of taxpayers’ cash which has limited scope beyond the likes of Ashington and Blyth.

And the county council’s financial plan for the next three years, which was due to be approved last night, allocates £150million a year for loans to third parties such as Arch.

An example of what the new Northumberland County Council headquarters in Ashington could look like.

The Conservatives have made scrapping Arch one of the main planks of its county-council election manifesto, meaning Arch is sure to continue to be a talking point up until Polling Day in May.

But the pledge to scrap the ‘highly-centralised’ company is also sparking criticism, with one resident questioning the legality of this given that the leader of Northumberland Conservatives, Coun Peter Jackson, is on the board of Arch through his position as leader of his political group.

Jean Mould, who is also a tenant of an Arch property and is worried about what would happen to her and others like her, wrote an open letter to the leader and chief executive of the council.

She said: ‘Coun Peter Jackson the Conservative group leader has suggested within the document that if he and his group seize control of the county council in May they will scrap the Northumberland regeneration company Arch, throwing hundreds of people out of work and people like me out of our homes.

How Arch works

‘As a very wealthy businessman and a director of numerous companies, Coun Jackson must know that suggesting that he scraps a profitable company he is a director of is against Companies House rules and will probably force a run on the company and its assets like my home. He’s breaching the Companies Act 2006.

‘I hope the other directors of Arch and the chief executive of the county council, who are currently managing public money to create wealth and jobs to improve the economy of Northumberland to offset Government austerity cuts, use their powers and show Coun Jackson that he can’t break the law and get away with it.’

However, in response, Coun Jackson said he was ‘sorry to see that Mrs Mould has fallen for Labour’s spin’.

He added: “The fact is that this is a wholly-owned private company, owned 100 per cent by Northumberland County Council, and not a publicly quoted company.

An example of what the new Northumberland County Council headquarters in Ashington could look like.

“So it is perfectly reasonable to propose that the structure of the company is changed so that the assets of that company return to the control of the county council.

“Not only will this save on expensive structures, including the £500,000 per year which goes on directors’ fees (none to the councillors on the board), but it will greatly improve the transparency and accountability of this publicly-funded operation.

“Existing tenants would still have the security of the county-council ownership as their landlord, but we need to halt the process by which Arch, instead of creating new jobs and opportunities, is seen as a vehicle for potentially risky investments such as the purchase of the Cramlington shopping centre for £120million (this figure includes the purchase of Westmorland Retail Park) with money wholly borrowed on behalf of the public.

“There is a serious imbalance in the way that Arch has treated the different parts of our county, with little being done to improve the lot of communities in need such as Berwick, Amble, Bedlington, Prudhoe and Haltwhistle, while tens of millions have been spent in Labour heartlands.

How Arch works

“Not only does this imbalance need to be redressed, but Arch should have been concentrating on our county rather than buying up many properties in places like Durham and Teesside.”

But the Labour group on Northumberland County Council has also attacked Coun Jackson over the Tory manifesto pledge to scrap Arch, questioning how an incoming Conservative administration would deal with more than £50million of central government cuts.

Labour also points out that ‘Arch employs more than 150 staff directly and another 400 sub-contractors and looks after more than 1,000 homes across the county.

‘Arch is also expected to contribute £25million in vital profits to the council which underpins jobs and services across Northumberland and this money will be lost.’

A Labour group spokesman said: “Peter Jackson’s Conservatives in Northumberland have put forward a recipe for financial disaster. Not only is their manifesto uncosted, but it will result in swingeing job cuts.

“It’s a ‘fantasy manifesto’ that ignores completely Theresa May’s £50million cuts and it wipes out £25million by scrapping Arch.

“That’s a £75million black hole in council finances under this Tory plan. That means council jobs losses on top of the Arch cull.

“Their plans will bankrupt Northumberland. To add insult, Arch employees have been maliciously targeted by their own director Peter Jackson. His position is untenable. He should either resign or he should be sacked”.

However, the Conservative manifesto itself also plays the financial incompetency card, saying: ‘Labour has doubled council borrowing to £1billion, putting us all in deep debt with massive interest payments.

‘This has meant less money for the everyday important things like road repair, local fire services, libraries, grass cutting and schools.

‘Labour has left a legacy of a debt crisis in Northumberland just as they did in national government.

‘The council’s latest forecast is for its debts now to exceed £1.4billion or more than £10,000 per household in Northumberland.’

When the council’s budget for 2017/18 and its spending plan for the period up to 2020 was discussed by the cabinet, Coun Jackson and Lib Dem leader Jeff Reid expressed concerns over the increased capital spending, while the Labour administration and the Independent group leader, Paul Kelly, backed their bold approach of invest to save.

So whether it’s investing in a vision for the future or increasing debt with risky spending, it’s clear that, one way or another, Arch will be a key issue for some time.

• Regarding manifestos, a spokeswoman for Northumberland County Council said: “Political manifestos are provided by the political groups. Officers of the council are not involved in their production or in assessment of the legal or financial implications. After the election officers of the council will work with the new administration and provide appropriate advice at that point in time.”