‘We’re bust now if we cancel’ warning to council over tram extension project
A r ow has broken out over E d i n b u r g h C i t y C o u n c i l ’s tram extension project, after an opposition council leader warned “we’re bust now if we cancel, or we might be really bust in three or four years time if we carry on”
A new financial report, carried out on behalf of the council by London-based consultancy firm Steer, shows that the cost of cancelling the tram extension to Newhaven could be less than the cost of completion.
The report lists four possible scenarios, each dealing with var ying levels of demand for public transpor t, which the scheme relies on to fund its £207.3m budget.
While the first and most optimistic scenario assumes that demand for the central tram line returns to pre -covid levels by 2022, and demand for journeys to the airport returns by 2023, the fourth and most pessimistic scenario projects a drop in demand of just 20 per cent in the years following the pandemic, which would force the council to use £93m of its reserves and take until 2055 to pay back.
Now, opposition councillors have warned the council could b e faced with difficult decisions in the future in order to continue financing the tram extension to Newhaven.
At a meeting of the council’s transport committee to hear the report, Inverleith councillor and Conser vative group leader Iain Whyte introduced an amendment to send the report to the next full council meeting for approval.
H e s a i d : “I t h i n k y o u w i l l agree with me that the discussion this morning has largely been about financial risk, the risk to the reserves of the council and the cost to the council of either continuing with or cancelling this project.
“I t s t r i k e s m e t h a t t h o s e risks show a huge downside o f e i t h e r o p t i o n , a n d a l l o f that has been surrounded by a huge amount of uncertainty, which as we’ve heard from officers we haven’t done any planning to see how we could pay for any of it.
“It strikes me, also, that basically what we’re saying is, given our reser ves are already b eing run down b ecause of the Covid situation this financial year, we’re not making savings we said we would make, t h a t e s s e n t i a l l y we’r e b u s t now if we cancel, or we might be really bust in three or four years time if we carr y on and the passenger demand doesn’t come back.
“All of those risks and scenarios to me are financial items, and unlike the business case where you decided to put us in this risky situation and go a h e a d wi t h t r a ms , p a i d f o r through risky future revenue, unlike that, this hasn’t b een presented to the finance and resources committee.
“At this stage, the only option I h ave t o m a k e s u r e t h o s e councillors are aware of this is to send it to full council.”
P e n t l a n d H i l l c o u n c i l l o r Susan Webber, Conservatives, seconded his amendment, and warned the council could be forced to make cuts to services to fund the tram extension.
C o u n c i l l o r We b b e r s a i d : “T h e a d m i n i s t r a t i o n h a s repeatedly assured us that the trams will not have any impact on council ser vices, but my line of questioning today clearly dictates there is going to be some choices to be made on capital, reserves and revenue going forward.