Sunderland City Council is to receive a £4.1million windfall as a result of a refinancing deal for Newcastle International Airport.
The airport’s debt facilities were due to expire in the new year and a new deal has been carved out with lenders, which will slash the amount of interest it pays.
As a result, a special dividend of £43million has been approved by the board and the shareholders, which include the council.
Of this £43million, the seven local authorities in the North East will receive 51% – equivalent to £21.9million – based on the amount of shares they each old – with £4.1million going to Sunderland.
It is understood that the amount has not yet been allocated to a specific budget, and will be held in reserves until it forms part of the budget setting process next year.
But already the cash has sparked a war or words between political rivals on Wearside.
Talk about hypocrisy, It was only four years ago that Coun Oliver was demanding that we sell our shares in the airportCoun Mel Speding, cabinet secretary
Conservative opposition Coun Robert Oliver, said the money will mitigate some government cuts and urged the authority to spend it wisely.
“This windfall of £4.1million puts into context complaints about cuts to council budgets in recent years and provides an opportunity for the council to support some of its funding priorities,” he said.
“It is a huge amount of money and represents a significant boost to the council coffers at a time when money is scarce but it is essential that it is spent wisely and on the services people want.
“Over the next few years, it could, for example, be used to support the budget for litter collection; provide security for more of the city’ parks or assist with new library arrangements.”
But cabinet secretary Mel Speding hit back, saying: “Talk about hypocrisy, It was only four years ago that Coun Oliver was demanding that we sell our shares in the airport.
“What a turnaround, now he is trying to tell us what to do with a receipt from that same airport investment.
“Typically Coun Oliver, whose ideology dictates that he knows the cost of everything yet the value of nothing, cannot grasp that the ‘huge’ amount of money he mentions is tiny in comparison to the £250million his government has already slashed from the budget of this council and has cost 4,000 jobs since 2010, with yet more to come.
“While the dividend is very welcome, it is a one-off income receipt, but the cuts which the council is having to manage impact each and every year.
“The use of this receipt, in light of this government’s continued austerity programme of cuts, will be considered as part of the budget planning process over the coming months and subject to future cabinet discussions.”