Council accused of having ‘money to burn’ over shopping centre payments

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Newport City Council’s subsidy payments towards a shopping centre deal have passed £4.5 million, according to figures obtained by the local authority’s Conservative group.

In return, the council has received less than £500,000 in income linked to occupancy levels of Friars Walk, in the city centre.

Cllr Matthew Evans, who leads the local authority’s Conservative group, said he was “absolutely staggered” by the council’s spending on the centre and accused decision-makers of having “money to burn”.

Newport City Council said previously the Friars Walk deal would be an overall financial benefit to the local authority, even if it paid out the maximum subsidy each year. 

It did not provide a comment in response to Cllr Evans’ claims.

Senior councillors agreed in 2017 the authority would top up the shopping centre’s income each year if it was not making enough rent.

A maximum of £500,000 would be paid out each year over the course of the 15-year deal, totalling a potential overall payout of £7.5 million.

The council has argued this deal represented “best value” to the council, which even if it paid out the full annual subsidies would still come out on top – because it received £8 million to sign the deal.

In addition, the terms mean the council can receive some income payments if the shopping centre is doing well.

According to the figures obtained by Cllr Evans’ party group, the council has only received those income payments in the first two years of the deal.

Cllr Evans said he believed the money had been “squandered” and could have been better spent elsewhere.

“Think how many additional social services staff could have been employed, or potholes fixed,” he said. “I seem to recall when I questioned the decision taken by the cabinet at the time, I was told this was merely ‘an insurance policy which would never need to be called on’.

He also noted a separate £6 million loan repayment to the council, for the redevelopment of the city’s indoor market, had not been completed on time.

“It would seem they have money to burn,” he added of the local authority.

Newport City Council was invited to comment on Cllr Evans’ claims, but had not responded at the time of publication.