The Head of Economy explains the Councils position regarding the Floating Bridge: We have not agreed to the introduction of charges but are about to start a consultation about doing so. We have an offer of funding from Government to replace the floating bridge but need to construct a business case to secure it. It is likely we will be asked to include the provision for replacing the replacement bridge as part of the business case. In the Councils budget we expect a surplus of £140,000 per annum from the operation of the bridge. This is used to subsidise other services (eg street cleaning, beach cleaning, grounds maintenance etc) and we make no provision to pay for a replacement bridge (which is why the current one is 38 years old). Therefore if, to secure the funds for the replacement bridge, we have to set aside as sum every year for the next replacement this will be an additional cost to the council (perhaps as much as £200k pa) that we would have to absorb at a time we are trying to save £28 million. There is also the risk that the grant may be insufficient to fund the replacement of the bridge which would mean having to consider borrowing the difference in funds needed. This would be likely to cost £70,000 for every £1million borrowed. What we dont know however are the running costs of a new bridge, until it is designed and operated we wont have a clear idea about this but we will be designing it with a view to reduce the operating costs. So in rough terms, if the operating costs were reduced by £100k but we had to set aside £200k for a replacement ferry and borrow £2million (at a cost of £140k per annum), the additional costs to the Council could be £240k pa (£200k+£140k-£100k). This needs to be set against the cost of the Council funding a replacement bridge without the benefit of grant funding. Assuming a cost of £6million, the annual borrowing costs would be c£420k pa, less the operating savings of £100k leaves an additional cost of £320k without making any provision for a replacement in the future. These figures are of course very broad brush but illustrate the type of decisions which the Council may have to take in the future.
Posted on: Wed, 10 Sep 2014 19:10:06 +0000
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