East Devon defers rates and advances cash
A package of financial support designed to ensure Exeter Airport can avoid the ‘worst case scenario’ of closure has been unanimously backed by East Devon District Council’s ruling cabinet.
The combination of the collapse of Flybe, as well as the coronavirus pandemic, has led to the airport facing an existential threat, with passenger numbers down 90 per cent year-on-year.
The cabinet approved measures including a further deferral of £180,000 of business rates, forward-funding the airport’s share of the Long Lane enhancement scheme by nearly £750,000 and endorsing the concept of a sustainable aviation cluster centred on Exeter Airport.
Project director Andrew Wood, in his report putting forward the recommendation, said that Exeter Airport had probably been the business most impacted of any in the district by coronavirus, particularly given the collapse of Flybe right before the lockdown. He said: “It is not possible to say categorically that the package of support outlined in this report will stave off the threat facing the airport, is not a cure, and won’t address in totality of issues they face, but it will help to cushion the impact of the pandemic and we hope it is more than a gesture.
“The most obvious alternative option would be not to provide any form of public sector backed support. The airport does though face an existential threat currently. In the worst case scenario the Airport would close. This would lead to further large scale job closures, reduce business rate revenues and also diminish the connectivity of the region.”
Mr Wood added: “The package of support is in place for the Airport to help counteract the impact of the lockdown, promote recovery and chart a course to a more sustainable future.
“Passenger numbers at the airport in May 2019 were 97,000 and in May 2020 the equivalent figure was just nine. From the beginning of the financial year to the end of the July passenger numbers dropped by 99.5 per cent compared to the same period last year.
In total, £580,000 of the Long Lane works will be secured by a guarantee from the airport’s parent company. Cllr Paul Hayward, portfolio holder for economy and assets, said that as it was taxpayers’ money that was being put on the line, it was only right there was security, and that if the council shares the risks of the bad times, they share the benefits of the good times.
But he said that while the council could offer business rate relief of £180,000 of the £600,000 bill they offer as it was the right thing to do, the government should step in an offer a year-long relief from business rates for all airports in England and Wales and bring them in line with their Scottish and Northern Irish counterparts.
“This is a national issue and for every regional airport, and the government putting money where its mouth is for this vital economic activity,” he said, adding that Simon Jupp, MP for East Devon, had also made this call. Mr Jupp had said: “The government needs to cut business rates entirely for the Airport and reimburse councils who would be affected.”
Simon Davey, the council’s strategic lead for finance, said that if the government put a national scheme in place, then that would override any decision made by East Devon, and the contribution would come back to the council.
Cllr John Loudoun, portfolio holder for policy co-ordination and regional engagement, proposing the council goes ahead with the package, said: “This demonstrates the confidence we have in and around the airport.”
The range of the measures that the cabinet agreed will aid short term recovery, ensure infrastructure improvements can continue to be progressed and work towards the strategic objective of developing a sustainable aviation cluster can be completed.
As well as the proposed business rate relief request within state aid limits to be funded through the Enterprise Zone programme, the cabinet endorses increasing the budget for the Long Lane project by £1.1m, and recommended to Council the borrowing of up to £3.7m against ring fenced business rate income to implement the scheme.
The Long Lane Enhancement Scheme will widen the road that runs past Exeter Airport and down to Hampton by Hilton hotel, which will enable a new Airpark – one of the four planned ‘Enterprise Zones’ – to come forward, as the current ‘unfit for purpose’ road prohibits its development The scheme includes the construction of a T junction, rather than an initially proposed roundabout, at car park 1 at the airport. The carriageway between car park 1 and the Flybe Academy/Hampton by Hilton hotel will then be widened to ensure a road width of 6.5 metres and footway is achieved and to ensure tie-in to the proposed roundabout junction.
And while Long Lane is being widened, a new road to connect Silverdown Office Park to the FlyBe Academy access road, known as the “Silverdown Link”, will be built. Once the Long Lane works are finished, the Silverdown Link will become a permanent bus and cycle only link.
The previous £2.55 million budget for the Long Lane scheme was agreed by the cabinet in March – on the same night that Flybe’s collapse was confirmed. The airport was due to fund South West Water to the tune of nearly £800,000 for the installation of a proposed deep sewer system, with work to take place at the same time as the Long Lane enhancement.
Those works will still take place, but would be funded by the Enterprise Zone Board, with the airport to repay the cash at a later date.