The cancelled Bristol arena that is not being built is costing the city £12m.
The 2019/20 Budget shows that money has been found from reserves to cover the costs. Ordinarily, the costs would have been funded from the capital stream of the budget; the part that deals with capital costs for things such as buildings and investments. The revenue stream deals with costs like libraries, and cuts, like those to libraries.
In the Resources Scrutiny Commission report we have the following comments. There is no mention of costs incurred due to the arena in this year’s budget:
8. Arena Funding
Members wanted to understand what the revenue impact of not going ahead with the arena at Arena Island was and to know what the interest savings were. Officers confirmed that £2.5
million per year is being saved.
Members were keen to understand more about the differing land values for the site
depending on the eventual use but were told it would be valued at the time depending on
the scheme. Members were surprised that such calculations had not already been carried
out by officers utilising the various different possibilities for the land use.
Members requested to receive further information in due course about the alternative
business cases that will be submitted to the LEP Board for the now unused £53 million.
In the Resources Scrutiny Committee Report, (p.14) however, there is the following chart that shows £12m of arena costs have reverted to the Revenue budget because they can no longer be treated as capital.
The Revenue budget is explained by the council as follows: ”
Before the start of each financial year, we need to set a budget for our day-to-day expenditure. This is called the Revenue Budget and is the amount of money we’ll need to provide our services during the year, taking into account grants we receive from the Government. Examples include staff salaries, building maintenance and the costs of running council vehicles.”
It is from this budget that the £12m was paid, the one that impacts staff salaries. The council drew money from reserves to meet this cost.
We know that from 2020 onwards, we are on our own and almost all our funding from central government will have gone – meaning the city’s services will be almost entirely dependent on council tax, business rates and income we can raise from other sources. By this time, responsibility for funding key services will have effectively shifted from central government to local tax payers.
We know, as the budget tells us, that by next year, there will be no central grant left and it will be local tax payers who will be funding key services. This is no time for spending Bristol’s money on projects that are not being built. It is also not the time to be losing £53m of funding that would have gone into the arena from the LEP.
All Budget reports can be found at the following page with all the reports and appendices.Tweet