Doncaster Sheffield Airport: Reform won't cancel £57m loan tomorrow - but 'safeguards' being demanded

An extraordinary council meeting is to take place on Monday morning to vote on rescinding borrowing approved in November as a way of frontloading spending on the reopening before £159m of devolution funding controlled by the office of South Yorkshire mayor Oliver Coppard is delivered in annual instalments.

The devolution funding is set to be used in substantial part to repay the £57m borrowing, which is due to be drawn from next March and is expected to be subject to an estimated £39.4m in additional interest repayments.

However, the devolution funding will only be released subject to the council’s lease with landowner Peel being amended. Changes are currently “on hold” with an impasse over whether taxpayer funding should be excluded from a turnover rent clause entitling Peel 20 per cent of future airport revenues above annual base rent payments. Negotiations with Peel are due to restart on Tuesday.

A Reform motion seeking to rescind the £57m loan at Monday’s meeting says they had “materially-incomplete information” at the time of the original November decision, with previously-secret details of the lease including the turnover rent clause only coming to light two months later after it was leaked to The Yorkshire Post.

Speaking to this newspaper on Sunday lunchtime, Councillor Jason Charity, Reform UK’s deputy leader in Doncaster where it holds the majority of seats on the council, said the party’s position was still being finalised in advance of Monday’s meeting.

But he confirmed it is discussing amendments set to avoid any immediate cancellation of the loan but putting in place new conditions for the money to be released.

He said: “It is still a work in progress. We still support the airport, which is why we are at this point trying to make sure we have the right deal.

“We’ve always said all along we’re not going to sign a blank cheque and it is not just any deal. It has to be a deal that manages risk and will set up DSA with a strong chance of success.

"The lease is fundamental to whether the airport succeeds or not.

"I don’t think it is going to be a straight ‘rescind’ or a straight ‘support’. There will be some stringent conditions on this. For us to continue to support, there will have to be some safeguards.

"We’re not just going to wave it through but we do want to support the airport if there’s an option.”

Councillor Charity said without the lease negotiation succeeding, the £57m borrowing would remain on Doncaster Council’s books and put the authority at financial risk.

It comes after South Yorkshire mayor Oliver Coppard wrote to Reform councillors this weekend with a last-ditch plea not to go through with a cancellation of the loan.

He said there is “no credible alternative” to the current plan to reopen DSA via a council-owned company. Reform has suggested a purchase of the DSA site from Peel should be attempted.

Mr Coppard’s letter, which has been seen by The Yorkshire Post, says the purchase idea is not feasible and "the likely result" of cancelling the borrowing would be that "the business case for DSA will be fatally undermined and DSA will not reopen".

"Your plans to halt the current proposals for reopening DSA must be put into context; chiefly that there is no credible alternative for taking this project forward or for reopening DSA or the wider Gateway East site,” it states.

"There is currently no legitimate private sector buyer who will take the financial risk of reopening DSA, chiefly because Peel Group are not prepared, and never have been prepared, to let go of the freehold of the site.

"There is equally little prospect of a compulsory purchase of the site. Even if it were possible, that plan would not be without significant cost. Any Compulsory Purchase Order would require CDC to pay a market rate for the site, a sum likely to meet or exceed the deal already agreed with Peel.”

Mr Coppard said the loan “is scheduled to be repaid in full” from the £159m devolution funding package.

"That money comes from the funds given to South Yorkshire by the government in London. Doncaster may have to take out the loan, but it will be repaid by the government, via the Mayoral Combined Authority.”

His letter also reveals further negotiations on lease changes are set to take place on Tuesday. “Negotiations are continuing positively with the next round of discussions scheduled on 12 May,” it states.

Councillor Charity has responded to Mr Coppard with his own letter, saying: “Members were asked to vote on £57m of public borrowing without sight of the Peel lease.

"The recission motion does not require Reform to produce an alternative airport plan. It requires the council to revisit the November decision with the information members should have had the first time.

"This is not opposition to DSA. It’s basic democratic control over public money.”

He added: “You say the £57m will be repaid in full from the £159m MCA package.

"The funding agreement, as I read it, makes repayment conditional on lease renegotiation, business case viability and regulatory compliance. If those conditions are not met, the borrowing remains on Doncaster Council’s books without reimbursement.

"SYMCA isn’t a passive bystander. You have structured the deal so Doncaster Council borrows first with reimbursement dependent on unresolved conditions.”

A spokesperson for Peel Land said on Friday: “We continue to work closely with the City of Doncaster Council and the South Yorkshire Mayoral Combined Authority to deliver the significant economic opportunity of the wider Gateway East initiative and to realise the benefits for both Doncaster and South Yorkshire more widely.”

Become a Yorkshire Post subscriber to follow our extensive coverage of the Doncaster Sheffield Airport reopening project and Monday’s extraordinary council meeting.