Green perspectives on Stockwood and Bristol. Mostly.

Tuesday, 14 January 2014

Austerity? Let's buy an Arena !

Stockwood Pete isn't too fussed about an Arena. Having clicked through the programmes and the prices now on offer at other Arenas – Cardiff, Newcastle, Sheffield, Leeds, Coventry, (not much on here), and Birmingham, it's clear that Stockwood Pete's bum is unlikely to occupy any of the Bristol Arena's 10,000 seats.

But on Thursday, the Mayor, with the support of his chosen Cabinet, will certainly commit Bristol residents to borrowing – and repaying - many millions of pounds, just to make sure that I and my fellow Bristolians have the opportunity.

It won't be a business decision (no business would touch it); it will be populist and political.

Most Bristolians will probably never go to our Arena (in the absence of naming rights, lets call it the Red Trousers Arena) just as they don't feel the need to go to professional football matches. Even so, it's been elevated to a matter of civic pride, and political pragmatism, that we should have one, just like every other self-respecting city. If we don't, the others will laugh at us. It's also a useful distraction from more serious matters.

Original nicked from Dru Marland.  Trousers by Stockwood Pete

In pursuit of the dream, many public servants and quite a few consultants have for years been fully occupied trying to find a business rationale for building an Arena. Back in 2003, the now defunct South West Regional Development Agency had a head start with it, and poured £9 million into acquiring the site, the heavily contaminated 'Diesel Depot' alongside Temple Meads. Then they spent a few million more on remediation. They even got as far as committing another £14 million to build a bridge from Cattle Market Road, giving not just access but essential services too. They found a global corporate arena operator, SMG Europe, plus other developers ready to make maximum use of the site. Then, in 2007, it went pear shaped. The operator argued (as private sector partners tend to do) that their own investment couldn't be justified without further effective public subsidy. SWRDA quickly backed off. As they explained at the time
the Bristol Arena will not be able to go ahead. Following a thorough look at the scheme, rising costs for the project mean it would simply not be a good use of public money. The amount of public cash needed for the scheme would have been £86m, including the £15m we've already spent.
Of course, SWRDA never had to depend on votes. They were more dependent on government imposed financial targets and on shrinking budgets. Your average elector, not to mention the Bristol Evening Post, didn't matter too much to them. Their days were numbered anyway, so they could afford to take this unpopular, but commercially sound, decision.

Enter the mayoral system. The Arena Promise was thought to be an essential part of any winning electoral strategy, and the Red Trousers Arena won. Back came the consultants and the development teams. Plus the new boys on the block, the West of England Local Enterprise Partnership – a powerful mix of elected members and businessmen self-appointed in backroom deals. By this time SWRDA had been dissolved, and its assets, including the now 'clean' diesel depot, transferred to the government's Homes and Communities Agency (HCA).

On Thursday, the Mayor and Cabinet will – after an earlier item about cutting £90 million from the city's public services – agree to borrow £90 million for an Arena. (That's before they've actually found the cash to buy the land it will stand on from the HCA.)

It's called, in the language of council finance, 'prudential borrowing'. The security – and the repayments - on the loan will rely on three funding streams : 
  • Rent paid by the Arena operator over 25 years
  • Car parking fees
  • Anticipated income from new business rates in the Enterprise Zone.
    The first two are 'new' money – they won't happen unless, and until, the Arena's built. Reliance on car parking revenue suggests that (in spite of the rhetoric) this will be a very heavily car-dependent venture, because it's based on a projection of 1,000 new nearby parking spaces (ie one car to every ten Arena seats) at £6 a throw and each occupied a hundred times a year. That would bring in £600K and a whole load of traffic on Cattle Market Road, while giving the customers every opportunity to drive back home without getting round to spending anything off-site. (The notion of a proper city public transport hub at Temple Meads gets its customary mention in the blurb around the Arena, but in truth it remains as woolly and opaque as ever)

    The last income stream to cover the Arena debt and repayments – the hoped-for business rate income from the Enterprise Zone – covers the bulk of it, at £53 million. But that's not guaranteed, and more important, if it wasn't used for the Arena it would be available (the LEP permitting) for other things. So in effect it's far from being a new income, it's a massive new cost to the public purse.

    Nobody pretends the city coffers will end up in the black from all this. It's much more about trying not to be too much in the red when it's all over.

    On Thursday, will we really see the Mayor, backed by his Cabinet, within a few minutes of imposing a budget of £90 million in cuts, decide to commit a similar amount to what, in a time of austerity, can only be a vanity project?

    Sadly, yes. And will we see any protests from the business elite, the people whose commercial nous has put them in the LEP driving seat to manage these public funds ?  Like hell we will.


    Stockwood Pete said...

    and in the same vein..... harpymarx's blog

    Harry said...

    We'd be a better city without people of your ilk.

    Anonymous said...

    If it wasn't for people like Stockwood Pete, the harbourside would be filled in with concrete, there would be a dual carriageway through queen's sq and the whole city would be a shitload of developer led crap (even more than it is now).


    Interested said...

    I doubt that I shall go to the arena either Pete but thousands will each time a gig or whatever they are called are put on. So-called deprived areas such as Merseyside get theirs courtesy of the public purse entirely with little need to wring hands about the cost of it all. Bristol as in so many things is regarded by central and European governments as being too wealthy for its own good and has to usually fend for itself when it wants any facility taken for granted in other cities of comparable size and some even smaller. Cities such as Swansea and Hull have new football and rugby stadiums built for them by their local authorities. In Bristol when private money does become available for a new football stadium a tiny minority of people block it. You say that most Bristolians will never feel the need to go the arena as they don't for professional football matches. The same could be said about the theatre or museums. Well over £20 million was spent on M Shed which is not as good as the old Industrial Museum in my view and in the view of others to whom I've spoken and still others whose opinions I've read in the local paper. So do you advocate no more public money support for museums and theatres in this city? Bristol City might be averaging 11,000 spectators per home match in Div 3 but a few years ago both Cardiff and Swansea were averaging less than half this in Div 4 (don't go in for euphemisms such as League One or Two. They are now in the Premier League bringing in tens of millions of pounds to their local economies each year and giving their cities international profile especially in the new economic power houses of Asia through their membership of the much-watched throughout the world Premier League. The fewer facilities that Bristol has the less likely it is that companies will set up in the area bringing much needed jobs.

    Stockwood Pete said...

    Thanks for the thoughtful comment, Interested. I've no strong feelings for or against an Arena, my concerns are more about whether we should pay from scarce public funds, plus a few other things like traffic management and access.

    As you say, the question of whether (and what) cultural/entertainment infrastructure should be publicly funded is always going to be contentious – especially when there are so many cutbacks in other more fundamental services. I think the difference with an Arena is that it's very much part of big scale commercial culture – and it won't make things significantly more accessible to more people who wouldn't otherwise get the chance. Cardiff isn't all that far away... in fact we've just booked for a concert there (St Davids Hall, where there's a great sense of occasion and theatre performance, far more than Colston Hall) – and we'll get back by train and bus the same evening. George seems to have the same travel pattern in mind for his Bristol Arena, relying on car-borne visitors to provide the parking fees that will (might) balance the books

    And we've been told repeatedly that a Bristol Arena will turn a profit. So why aren't the investors queueing up?

    Arenas and football stadia do both seem to be a matter of local pride and of keeping up with the Joneses. I'm not convinced, though, that they improve the host's standing on a world stage. Maybe that's because I lived most of my life near Middlesbrough! Even with a spanking new stadium, and a strong local footballing tradition, the club's sunk back into Second Division obscurity. Only the charges have gone up.. and in a place where people generally have less in their pockets than in Bristol. Inward investment there (a very mixed blessing) has mostly been market driven by those keen to acquire steel and chemical works at knock-down prices, and with little sense of local responsibility. For Teesside, read Avonmouth without the motorways. It takes more than stadia to turn a town around. In Bristol, I'm sure the presence of so many financial and creative companies counts a lot for drawing in more of the same, and I suspect it doesn't need an LEP to make it happen. In itself, that kind of investment doesn't do much to tackle the local poverty and skills gaps if it just means building more houses to bring in the skills from outside. Sorry if that sounds very negative!

    Interested said...

    Pete - when you mention Cardiff you touch a raw nerve with me. That city region left to its own devices would be struggling and would have few of the facilities it enjoys and that you are prepared to travel to.

    Over the years it has received and still gets an inordinate amount of public money compared to Bristol, (a) because it's the Welsh capital and (b) because South Wales is a supposedly deprived and deserving area that, like Merseyside and the North East, is given oodles of dosh from the public purse provided in part by cities such as Bristol that gets back less of its redistributed business taxes than it pays into the central government pool.

    The result is that the Wales Government (funded largely by the Westminster Block Grant which we all contribute towards) can indulge itself by liberally splashing the cash around its capital city to try to give it the look of an impressive European capital.

    The latest waste of public money is the £52 million spent by the WG on the basket case that is Cardiff Airport. It's loss making and the WG will have to spend a lot more of our money to have any chance of turning it around. The First Minister admitted it would probably have closed without Welsh government intervention.

    Using your analogy of the Colston Hall/St David's Hall, there is a perfectly good and successful airport just outside Bristol that is run profitably by the private sector which more Welsh travellers used last year than used Cardiff Airport (CAA stats).

    So if I have to go to Cardiff to see a concert - and spend money in local restaurants/pubs there that I'd rather spend in local businesses here, not to mention the cost of getting there - why should my money be used to help Welsh people get themselves a better airport so they don't have to travel to Bristol?

    And don't get me started on the lottery-funded Millennium Centre which competes with the privately-owned Bristol Hippodrome. Not only that but the Millennium Centre was given a legal multi-million pound slush fund to try to snitch shows bound for the Hippodrome. Don't forget also that the lottery also went a long way to funding the Millennium Stadium. What did Bristol get for its millennium lottery present? At-Bristol.

    If the Bristol Arena is a vanity project then so too without doubt is Cardiff Airport's acquisition by the Wales Government.

    I've become more than fed up with Bristol being shafted by central and European governments down the years because it is supposedly too wealthy to need assistance from the public purse, yet other places that don't create wealth are handed things on a plate (whether they become profitable or not).

    I want an arena, a major conference centre, a proper sports stadium and a decent public transport network, including an improved suburban rail network where the infrastructure is still largely in place, for starters, and if the public purse has to oil the wheels along the way then so be it. We would then be like some of those cities that we support.

    I sometimes wish that Bristol was on the other side of the estuary. Its size and long history would have ensured it was the Welsh capital with all the contrived advantages and major hand-outs that come with the job.

    At least your site has given me the chance for a rant and I thank you for that.