Get the popcorn ready: the politics of Pydar are about to become even more interesting

Posted By on 9th April 2024

By Graham Smith

Cornwall Council’s plans for a £2 billion capital spending programme looks set to come under attack next week – from the ruling administration’s own side.

The total projected capital spend is £2,077.035 million.

Within this context, the extra £10 million approved by the council’s Conservative cabinet last month for Truro’s Pydar regeneration looks like loose change from the back of the sofa – but many backbench Tories dispute that this cash should be treated as “capital” at all because it is to fund only more architects, consultants and council staff for two years.

The extra money will put not a single shovel in the ground or lay a single brick.  Therefore, say the rebels, it should be classed as revenue.

The extra money for Pydar will almost certainly be approved by the full council because of an unholy alliance between the Tory payroll vote – the cabinet and committee chairs – and Liberal Democrats from the Truro area who are enthusiasts for anything that spends money in Truro.

But the Conservative “awkward squad” are lining up to ask questions.  The £10 million will have to come from borrowing.

The council’s ruling administration was embarrassed last month when it was exposed as not knowing how much interest it would have to pay on the £10 million.

The borrowing costs are definitely “revenue” and will impact on frontline council services all over Cornwall.  The latest official estimate puts the figure at £600,000 – about the same as County Hall spent on last year’s military parade in Falmouth.

Over the two years that the extra £10 million will keep Pydar on life-support, the borrowing costs alone could pay the wages for 15 full-time care workers.

Council officials have blamed part of their failure to make progress at Pydar on a “sudden” requirement for new designs caused by the 2023 Building Safety Act (BSA.)  This introduced new rules for buildings taller than 18 metres, rather than the previous 30 metres.

But there was nothing “sudden” about the 2023 legislation.  It was introduced into Parliament in July 2020, following an independent review published in 2018 stemming from the 2017 Grenfell Tower disaster.  The progress of the 2023 BSA through Parliament has been covered extensively in the construction press.

It is beyond belief that the army of architects, consultants and council officials who have been drinking from the Pydar well since 2016 were not aware of the BSA before “suddenly” discovering they wanted another £10 million last month.

Some Tories also want to know why they were not told about the “special purpose vehicle” called Treveth Pydar LLP when it was created, on 6th March 2023.  Even some cabinet members did not know about it until they voted to approve it 12 months later.

Other councillors question why priority within the Pydar project – now split into five distinct construction phases – is to build a hotel.  And even this will not be finished before 2030.

The original promise of 35% affordable housing is now so far in the future that no-one really thinks it will ever happen.

Councillors from outside of Truro have never been impressed with the Pydar concept.  One of County Hall’s firms of consultants has produced a report arguing that what is good for Truro is good for Cornwall.  This is an argument which fares less well in Bude, Saltash or Penzance.

Some councillors are minded to call for a scrapping of Pydar and replacing the project with a low-cost “natural” asset such as allotments or even a wildflower meadow.

“This would probably mean writing off about £8 million in money wasted so far,” said one Tory.

“But we are never going to find the hundreds of millions we need to actually build the thing.  We might as well stop now.

“The trouble is, the officials are so addicted to chasing their losses, hoping that their luck will change, that they cannot see beyond the next bit of bad news.

“The cabinet has been asleep at the wheel for years.  It was the Liberals who foisted this thing upon us but we’ve had three years to get a grip and we have failed to do so.

“Circumstances have changed.  In 2016 this was an idea which might have stood a chance if we’d just got on with it.  Interest rates were still low.  They are not low now and they won’t ever be going back to 2016 rates.

“Maybe we should have gone with the Public Works Loan Board instead of fannying about with all that Blairite Private Finance Initiative bollocks.  But we can’t spend what we haven’t got.

“As someone once said, there is no ******* money.”

The Grenfell fire of 2017 led to the 2023 Building Safety Act.  The progress of this legislation through Parliament was covered extensively by the construction press.  Yet County Hall officials and consultants say they were taken by surprise when it "suddenly" became law last year, forcing them to redesign parts of the Pydar project.

Crucially – and on this point there may well be a cross-party consensus – councillors want to know the latest forecast costs of the whole Pydar project.  For some reason this detail was left out of last month’s cabinet report.

In 2017 Pydar was forecast to cost £100 million.  It has risen each year, most recently estimated – more than six months ago - to be £220 million.

By the time Treveth Pydar LLP gets round to putting spades in the ground, the costs could easily be approaching £300 million, if not more.

These are the sorts of figures over which some councils go bankrupt.

The Conservatives used to pride themselves on being the go-to brand for “sound money.”  Some worry that they should now sign up to Gamblers Anonymous.

This article has 11 comments

  1. I draw the attention of Cornwall Council staff and Councillors to Social Responsibility, as defined by the Gambling Commission:
    1. That crime should be kept out of gambling
    2. It should be conducted in a fair and open way
    3. Children and other vulnerable persons should be protected from harm and exploitation from gambling
    Compliance includes:
    Transparency with consumers – do they know who they’re participating against?
    The importance of interacting with customers
    Fair and transparent terms and practices

  2. If Councillors vote to pile this £10,000,000 debt liability onto us Council Tax payers, then all 283,042 of us in Cornwall will each have to contribute £35.33. That is 1.6% of the 5% Council Tax rise only recently applied due to impending bankruptcy of the Council? Assuming the approved budget included this payment then without it our Council Tax would have risen by ONLY 3.4%.
    The pretence that this is Capital expenditure, merely massages gullible Councillors into believing this is not real money, just a paper exercise in UPLIFTING the Capital Budget. NO! The architects etc. will be paid in real time from the real money we are transferring to Treveth. It will then be out of Council control how the £10,000,000 is spent, because Treveth is not under Council control. Why should we the Council Tax payers take on this unsecured debt for the benefit of a private entity like Treveth? If they went to a bank for this loan and for the reasons they need it, the banks would just laugh at them. They would not entertain an unsecured loan for wages and salaries to a company with assets of £8, which is what they have paid to acquire them.
    Councillors should give up on this enterprise now. Unless Treveth can stand on their own two feet we cannot afford to finance them. These delusions of grandeur need to stop. The Council are crap at Development, and we are equally unsuited as a collective of “Mutual Investment Bankers”. The sooner this mess is transferred to the real world the better for everyone.

  3. Excellent article – thank you. The Tory who said ‘Maybe we should have gone with the Public Works Loan Board instead of fannying about with all that Blairite Private Finance Initiative bollocks’ sounds like my kind of Tory – a beast never previously sighted and assumed to be mythical.

    But what I’d lke to ask, in my ignorance, is doubtless a silly question: is ‘vehicle’ as in the Treveth Pydar LLP some sort of metaphor for heaven knows what? Or is it a useful lorry or something like that? As I live in Penzance, I have my own reasons for taking an interest in Treveth and its workings

    • Linda Camidge were this matter not so very serious it would be high comedy given the clownish nature of the players who do a great line in ”corporate speak” while singularly lacking the killer instinct to turn waffle and fudge into results that translate into a positive bottom line on a balance sheet.

      Whether they succeed or fail they get paid handsomely, basically being unaccountable and answerable to no one, while like the proverbial bull in a china shop they founder around wasting vast sums of taxpayers funds on dubious property development fantasies that anyone with any business sense whatsoever can see are so flawed as to be doomed from the outset.

      This is where the term ”vehicle” enters the suits vocabulary, it is obvious that they are aware that they are now skating on extremely thin ice that could bring their corporate house of cards crashing down around their ears as their own self styled brand of casino capitalism runs out of wallpaper and paste to cover the cracks that are so obvious to outsiders.

      The ”vehicle” in question is a corporate entity which is perfectly legal but nonetheless very ethically dubious in that it is deliberately designed to go broke in the event of disaster thus shedding all liability and debt that would otherwise fall on the parent company (Treveth), which by default as the sole Treveth shareholder, on Cornwall Council who are obviously paranoid about ”reputational damage” which is a bit of an oxymoron given that its reputation was shredded years ago.

      The whole rotten edifice of Cornwall Council (AKA Kremlin Kernow) has been heading down a one way street towards insolvency since its misbegotten inception in 2009 due to a succession of appalling chief executives, equally appalling elected councillors who mainly just do as they are told without question, they milked the EU funding for all it was worth which for a few years gave a false impression that all was well.

      Given that most of the EU funded gimmicks actually crashed and burned financially some of the money did actually enter the local economy but not until the consultants economists and outside contractors had creamed off the lions share of the honeypot and legged it back to the smoke with the loot.

      Now these failures are there in full view for all to see, eg Wave Hub circa £45 million, Spaceport circa £30 million, Heartlands circa £32 million which are but prime examples of illustrative utter failure, while there are countless other dubious initiatives that just about stagger along while swallowing taxpayer funds faster than the printing presses can produce the money.

      (To be fair Cornwall did get fast fibre broadband and Goonhilly Earth Station which can be considered a beacon of success in an otherwise pretty barren landscape).

      In this league are the ”arms length” corporate entities like Cormac and the latest wheeze in the form of the arms length property developer Treveth which takes corporate claptrap into a whole new dimension, conceived on the back of the property boom unleashed by the disastrous local plan, by the time Treveth was actually incorporated the boom had become a bust as interest rates soared, while as usual ahead of the curve the smart money had as usual legged it, just as Treveth was wading in.

      It is ironic that Cormac has always claimed to be profitable, on paper it probably is but it appears to systematically overcharge its main customer Cornwall Council then returns the money in the form of a ”dividend” in what is in reality a gigantic money go round that fools the gullible into believing that all is wonderful and the skies are perpetually blue over Kremlin Kernow.

      I could go on but that is enough for one day!

    • Assuming, perhaps incorrectly, in which case I apologise, that you request an answer to what a business “vehicle” is, HM Government describes an LLP as follows:
      An LLP is a form of legal business entity with limited liability for the members. The main difference between an LLP and a limited company, is that an LLP has the organisational flexibility of a partnership and is taxed as a partnership. In other respects it is very similar to a private company.
      Your metaphor for heaven knows what is probably correct!

  4. Gamblers anonymous !!

    No, no, no its Betfred.

    Nothing anonymous – they just gave Betfred Tory Party Donor a Planning Permission of a truly monstrous hotel in Newquay, for free, with no Planning Committee – just one Tory Cabinet Member PEP and one Planning Officer.

    Nothing anonymous going on they are now so brazen they gamble openly – with Betfred….

  5. Give the blighters enough rope!!!

    At last some councillors are seeing the light and questioning this lunacy which is egged on by the Truro centric councillors who really should know better given the damage they have already done to our lovely little city.

    It is time that this folly is stopped and the inevitable losses written off before the Kremlin really does dig itself in too deep to get out of the mess it has created.

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