“A CPO is wasting taxpayer’s money!” – a rebuttal

There has been a lot of concerned talk, mostly from misinformed individuals, about the amount of money being spent on pursuing the compulsory purchase of Manston Airport. Let’s put this in to some sort of context.

£24,000 spent by the previous Labour Thanet District Council
Last year the Labour administration at Thanet District Council spent the princely sum of, approximately, £24,000 on ‘soft market’ exercises, the flawed Falcon Report and legal advice on potential CPO partners. The Commons Select Committee criticised TDC for the paltry amount spent while PriceWaterhouseCooper criticised their procedures. These monies will be refunded by RiverOak as soon as an invoice is produced.

£75,000 spent on the PwC Report
This was not prompted by the supporters of Manston but was an independent initiative by the Conservative Government, following the failures of the TDC Labour administration pre-election. This report was paid for by UK taxpayers at approximately 0.00125p per head.

 £10,000 spent by the current UKIP Thanet District Council
At last week’s Extraordinary Cabinet meeting, Leader Cllr Chris Wells said that a minimum of £10,000 was to be spent on legal services. This is for TDC-appointed solicitors will liaise with RiverOak’s solicitors, in order to satisfy the Council’s Finance Officer and to tie up any final loose ends. Cllr Chris Wells indicated that it would be inappropriate for RiverOak to pay for this at the point in time,  as it could be seen to be prejudicial to any outcome. RiverOak have always said that they would refund all monies spent once appointed as indemnity partner.

From the RiverOak website:

RiverOak has offered to indemnify the Council. What does this mean?
RiverOak will cover ALL the costs of the CPO process, the costs of acquiring Manston and all related costs. These include legal fees, valuation fees, inquiry costs and any other expenditure incurred in acquiring Manston under CPO. The Council will not have to pay for anything.

What happens if RiverOak won’t or can’t pay?
Under the terms of the indemnity, the Council will not be required to take any particular step until it has first received sufficient funds from RiverOak. The indemnity therefore prevents situations where the Council has incurred a liability which it needs to try and sue RiverOak to recover.

How will these payments be managed in practice?
RiverOak will open an escrow bank account which will always hold sufficient funds to meet any pending bills and which can be monitored by the Council.

What happens if the Secretary of State decides against a CPO?
Unless there are grounds for appeal, that will be an end to the matter. RiverOak will have paid for everything and the Council will not be out of pocket.

At the end of the day; compared to the £3,400,000 lost on TransEuropa Ferries; compared to the £12,400,000 of current unpaid council tax in Thanet; compared to the £20,000,000 spent on the Davies Airport Commission Report;  and compared to the £18,600,000,000 it will cost to build the third runway at Heathrow; the money outlaid by TDC on Manston Airport seems a tiny drop in the ocean.

4 thoughts on ““A CPO is wasting taxpayer’s money!” – a rebuttal

  • July 23, 2015 at 11:17 am

    Just a thought. If RO really are suitable indemnity partners, why does TDC have to spend £10k’s employing legal and accounting experts to verify RO’s bona fides?

    • July 23, 2015 at 11:19 am

      Well, TDC obviously can’t be 100% certain they are suitable until they’ve done these background checks. Better safe than sorry.

  • July 23, 2015 at 12:00 pm

    But that’s what I don’t understand. If, say, I was flogging a car on the internet, and someone said they wanted to buy it, then I’d need to see that they’d got the readies. If they struggled to do so, then I would be a bit dubious about them, and flog the car to someone else.
    In the same way, surely, if RO want to buy Manston Airport, then all they’ve got to do is make evidence available to TDC that they have the money to do the job. The fact that TDC is having to do what amounts to a forensic accounting job on looking into RO’s assets etc suggests, to me, that all is not as it should be.

    • July 23, 2015 at 12:10 pm

      Andrew – it’s all part of the prescribed due process – and not specifically set-up just to evaluate RiverOak. This process would need to be followed no matter the company. Most of the process is showing proof of funding and so on.

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