The Stage

Liverpool wants £20m loan to cover Capital of Culture costs

Published Tuesday 10 July 2007 at 15:05 by Lalayn Baluch

Liverpool City Council is appealing to central government for a £20m loan to help meet the financial shortfall for its year as European Capital of Culture.

The council has estimated a budget deficit of £29.4m for 2008/9, of which £22.2m relates to next year’s culture programme. It has proposed to borrow money for the one-off costs, and make repayments over a five year period by raising council tax by 1%.

A spokesman for Liverpool City Council said: “It’s a once in a lifetime event - the European Capital of Culture won’t be coming back to Britain for at least 25 years.

“This city was chosen in a nationwide competition, and is representing the UK on the European stage. To fund this purely from city council funds would knock out the budget for this financial year coming. The council is saying, let’s spread the burden over the next five years, because of the benefit of 2008 is not just for that year but for future generations.”

A financial report released by the council states the loan will not be used to fund ongoing costs of its mainstream services. Other methods of meeting the shortfall could mean remortgaging council properties, or using reserves.

Last month, Councillor Joe Anderson, leader of the opposition Labour group at Liverpool City Council, agreed to sign a letter appealing to the government to agree to the funding formula. The decision came a day after Anderson resigned from the culture festival board, after accusing the council of wasting money on hospitality for VIPs and alienating local communities.

He told the Liverpool Echo: “I have made my feelings known about the way the culture programme is being handled, but we all want to see our Capital of Culture year succeed.”

A Liverpool council spokesman denied that funds were being mismanaged. He said: “The chairman of Liverpool Culture Company has highlighted that the entertainment budget represents less than 0.5% of the entire budget.”