Ever since Robert Maxwell blustered his way around East Edinburgh in 1986 Meadowbank has been a headache for which the cure has been magic money
The Bouncing Czech came in to save the Commonwealth Games as a £4m black hole yawned open and walked away having secured an estimated £4m worth of publicity for his newspapers and the city still faced a debt just short of, you guessed it, £4m. The Daily Mirror tycoon had put in less than £300,000.
Built for the 1970 Games, the stadium was just about good enough for 1986 but with plan after plan for the city’s main publicly-owned sports facility having so far come to nothing, the headache is a throbbing, spangle-eyed migraine which just won’t go away.
Back in 2006, a failure to engage properly with the local community ended up with the collapse of a plan to redevelop the site for a local sports centre and housing and to build a new stadium at Sighthill. A petition signed by 6000 people was too much for the then Labour administration to resist, but it still resulted in defeat in the 2007 election.
Then the future of the arena was the cause of a major rift with Scottish Rugby who saw its reconstruction as an opportunity to form a partnership for Edinburgh Rugby similar to that enjoyed by Glasgow Rugby and Glasgow Council at Scotstoun. No deal could be done and Edinburgh will be moving to Myreside instead.
The Meadowbank redevelopment scheme at the heart of that dispute took another step forward this week with approval of a progress report about its demolition and replacement with a smaller complex plus a running track for a whopping £43m.
The problem is the council is still some £8m short, but even then there is a catch because the £35m the council claims to have includes £10m it will raise by selling off some of the land currently occupied by the Velodrome and back pitches for affordable housing . . . not on the open market, but to itself. The accounting wizardry involves the £10m being paid from the Housing Revenue Account which will then be covered by borrowing against future receipts. Magic money.
At a meeting of the Culture and Sport committee this week, Conservative councillor Joanna Mowat forced a council officer to admit a sale on the open market would raise more money and the reason for not doing so was the council’s apparent ability to deliver more quality affordable houses more cheaply in a better scheme than anyone else. The trams experience suggests otherwise.
So as councils up and down the country face a looming financial crisis, on this one project Edinburgh Council plans to borrow £10m even though it doesn’t have to, and to pass on the opportunity to eat into an £8m gap by failing to maximise the revenue from the sale of a major public asset.
Transferring money from one account to another to enhance departmental profits was what we used to call wooden dollars, and once council accountants have waved their magic wands doubtless there will be congratulations all round that new Meadowbank is fully funded and on-budget.
And to fund that gap, it looks like there will be more borrowing at an interest rate of 5.1 per cent, or £600,000 a year for 20 years, even though a new report suggests public borrowing could be available for 1.6 per cent.
Ultimately the money comes from only one place, you the taxpayer. And if your council tax goes up to pay for the cheap sell-off, the borrowing and the over-spend don’t expect the council to accept wooden dollars or fairy dust.
Ex-Evening News editor John McLellan is the Scottish Conservative candidate for Craigentinny & Duddingston