Will Rachel Reeves step in as Doncaster Sheffield Airport plans face turbulence?

The Chancellor said that in contrast with how the last Government “stood by” as the airport was shut by private owners Peel, Labour would support Doncaster Council and South Yorkshire mayor Oliver Coppard to reopen the site as a “thriving regional airport”.

Her comments were a brief part of a much longer speech about growth centred around her backing for a third Heathrow runway, a much more contentious national issue.

So it may have seemed that the Government’s support for the return of DSA was something of an easy win – especially in the context of widespread public backing for the idea and a plan already in progress for Doncaster Council to use its share of already-agreed devolution funding to set up a company and run the site.

Indeed the case for reopening the airport fits neatly with the Chancellor’s growth agenda as it is claimed its return will prove the catalyst for wider regeneration work creating thousands of jobs and generating £9 for every £1 spent.

Such high-profile backing for the project obviously provides it with a lot of soft power when it comes to discussions on topics such as securing airspace. However a series of developments since then indicate that the Government is likely to have to commit much more than just warm words to get the airport reopen.

Firstly, a decision on whether Oliver Coppard will allow Doncaster Council to use its share of devolution funding on the project has been delayed until the summer as he seeks independent advice over what his officers have warned is an "inherent and significant financial risk to the public sector” from the plan.

Secondly, a report to Doncaster Council’s cabinet put the revised figure for reopening costs at £145m – £7m more than the £138m of the city’s devolution funding which has been earmarked for use.

Thirdly, it has just come to light that the council’s auditors Grant Thornton wrote a “letter of concern” to the local authority in November to express their doubts about the scheme and the substantial escalation of financial risk. It has separately been revealed the estimated cost of minimum lease payments on a 125-year agreement the council has already entered into for the airport site has dramatically increased from £14.8m to £56.6m.

Grant Thornton’s letter highlighted two recent examples of where councils had entered into “complex commercial arrangements that were beyond the limits of their expertise” – including Nottingham Council’s notorious Robin Hood Energy company which collapsed after losing millions in public cash. The letter pointedly noted that Doncaster’s leaders may find reading up on that issue to be “helpful”.

But the idea of the Government stepping in to stump up extra money to make a more sustainable case for the airport project is not a simple calculation for the Chancellor.

Leeds Bradford Airport has already raised concerns that the level of public money currently being proposed for DSA amounts to “unfair competition” – with more funding obviously having a further distortive effect.

It is worth remembering that Ms Reeves, who is MP for Leeds West and Pudsey, has already blotted her copybook with LBA after previously opposing its plans for a new terminal in 2020.

The nature of what exact form of “support” Government provides towards restoring of DSA remains unclear but Government sources indicated to me last week that the reopening is a matter for Doncaster Council and its commercial partners.

It suggests a funding contribution is not in the offing but come the summer if the project collapses due to concerns for local finances while the Chancellor is “stood by”, her supposed support will look very hollow indeed.

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