A BONANZA £3.1 million cash windfall heading to Worcester City Council could be used to build a first class swimming pool, reverse massive cuts or pay off debt.
Your Worcester News can reveal how the city's Conservative leadership is running the rule over three possible ways to spend the cash coming from the sale of its Orchard House HQ.
- Funding the city's new swimming pool project, which as we revealed yesterday is being re-examined to see if Worcester can get a bigger, better facility than a six-lane, 25-metre pool
- Dramatically reversing at least some of the proposals to slash around £4.1 million from budgets by 2019 by deleting ones deemed unpalatable
- Paying off historic levels of debt, which today totals £8.5 million and includes loans from third parties like the Government-backed Public Works Loans Board and borrowing on the money markets
As we revealed yesterday the Orchard House complex, along with neighbouring council buildings Wyatt House and Graveney House are being sold to the University of Worcester for £2.9 million.
The deal also includes a 20-year lease on the Moors car park, which the university will pay a £260,000 upfront premium for and a nominal £1 per annum fee.
The sale is due to be voted through by the city's Conservative cabinet on Tuesday, and by March 2015 council staff will relocate to the City Art Gallery and Museum in Foregate Street.
Councillor Simon Geraghty, the leader, said: "It's a very welcome, large capital receipt for this council and we will be seeking to assess things immediately to see what we do.
"I would point out as this is a one-off capital sum it can't simply go on propping up services, but there are all sorts of other areas we can invest in.
"It could be used to reduce the levels of debt, or it could be used to make other big improvements in the city.
"It could go on the swimming pool, or it could bridge some of that gap (in the budget) - these are the areas we'll be looking at.
"This money is very welcome news for us and it's vital we use it wisely."
The news is another big boost to Worcester swimming club, which is pinning its hopes on the city getting an eight-lane competition standard pool at Perdiswell.
The cash could mean there is no need to take out such a hefty 40-year loan on the existing £6.5 million pool proposal - or even beef up the coffers enough to make an eight-lane, £13 million facility a reality.
Cllr Geraghty added: “Negotiations over selling Orchard House started in March when the previous (Labour) administration was in charge so I don’t think this is one of those issues where politics comes into it.
“But there will be a debate over how the money is used, some people might say we need to strike a balance across all the areas.”
The opposition Labour group say the decision will be massively important due to the current precarious nature of local government funding.
But some options may prove tricky, as under accounting rules the council cannot use a capital sum on revenue items, effectively ruling out an immediate cash injection to prop up service areas.
And on paying off the debts, if the council opts to wipe it all out in one go there would be financial penalties to pay for dealing with it so quickly.
Some of the repayment deals include clauses that lead to extra fees being added on for an early settlement.
The Coalition has already indicated that town hall grants will continue to shrink for the foreseeable future.
Councillor Richard Boorn, the party’s finance spokesman, said: “If they went for a much bigger pool there would be a bigger cost in heating it.
“You might say this is a lot of money to have (the sale of Orchard House) but it’s a one-off sum.”
Of the £8.5 million of debt the council is carrying, £5 million is from borrowing on the money markets and compares well to other district councils.
The remaining £3.5 million is owed to the Public Works Loans Board, which is affiliated to the Government and offers repayment rates below those available commercially.
* How would you spend the cash? Leave your comments below and we will feature the best ones in the newspaper.