The deal sought by Cornwall Council’s Conservative Cabinet to get into bed with an American financial company to run Newquay Airport and its lucrative 650-acre estate is off. The proposed airport deal failed Cornwall Council’s own due diligence tests just days before it was due to be decided.
A council spokesperson said: “Whilst negotiations have progressed, and the principal terms of a transaction are agreed, it has not been possible to bring these all together in a way that addresses some of the technical issues of the deal.”
Noah Law, MP for St Austell & Newquay welcomed the decision, as he and Cornwall’s six MPs had cautioned against privatisation soon after their election wins. He stated: “I welcome the council’s decision to halt this costly and misguided process, which has been draining taxpayers’ money on consultancy fees for a deal that was never viable.”
If the deal was signed off it would see asset management company Adynaton taking a large slice of the airport estate, which includes Aerohub Business Park, the Spaceport, Kernow Solar Park and 200 acres of land. The company would also oversee the running of the Cornwall Airport Newquay which has always proved costly for the council and is subsidised by the taxpayer to the tune of around £4.8m each year.
Mr Law, a former financial analyst, criticised the plan, describing it as emblematic of a “naive Tory administration chasing free lunches that don’t exist when, in fact, it’s having its trousers pulled down”. He added: “Nobody said that running a small but economically vital regional airport would be easy, but thinking that American venture capitalists of all people would pay for the privilege of solving the council’s problems is fanciful.
“As with its other botched privatisations, the council needs to take proper responsibility for our assets and do the hard work to improve their operations before lurching to give away hundreds of acres of prime Cornish land on the cheap.”
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In response to the latest development, Ben Maguire, the Lib Dem MP for North Cornwall – who, as the MP for most of the airport’s site which sits across the constituency boundary, has also been vocal in his criticism of the deal – commented: “We warmly welcome the news that the sale of Cornwall Airport Newquay to an American property company is now not going ahead. This is absolutely a victory for the residents of Cornwall.
“For months, we have been calling for clarity and openness around this deal, and it’s clear the Conservative-led council has finally heeded those calls. Now, we must ensure the airport continues to be managed in a way that prioritises long-term benefits for Cornwall, rather than be seen as an opportunity for a quick cash grab at the expense of our constituents.”
Independent councillor Tim Dwelly, chair of the Economic Growth and Development Overview and Scrutiny Committee, said the deal failed due to the council’s own due diligence tests just days before it was due to come before his committee and the Cabinet.
“As a scrutiny committee we had profound doubts about the proposal and we are very pleased our concerns were listened to,” he said. “None of this means that new ideas for making income from the airport land and reducing the cost of the airport won’t be important for whoever runs Cornwall Council after the May elections. Our cross party committee has worked well on this matter and we will use our ongoing Airport Inquiry to make recommendations for the future.
“Even though I am an opposition independent councillor I do want to thank the current administration for taking the airport’s future seriously. Although their preferred solution has failed for now, councillors are likely to unite around new ideas for investment under the next council administration.”
A council spokesperson didn’t go as far as saying the deal was definitely off but stated: “As agreed at the June Cabinet meeting, Cornwall Council has been working with the preferred partner on the future of the Newquay Airport Estate. Whilst negotiations have progressed, and the principal terms of a transaction are agreed it has not been possible to bring these all together in a way that addresses some of the technical issues of the deal.
“Papers regarding the deal were due to be published ahead of both Cabinet (January 17) and Overview and Scrutiny Committee (January 16), but those meetings will no longer be discussing those items as we continue the talks.”
Phil Mason, Strategic Director for Sustainable Growth and Development at Cornwall Council, added: “We remain completely committed to the development of Cornwall Airport Newquay and the surrounding estate and continue to engage and work with our preferred partner under the terms of our Exclusivity Agreement in order to bring the proposed deal to fruition.”
An insider at the council told us: “Heads should roll over this disaster. Serious questions need to be asked about leaders at the council spending over a year on a pet project that was never going to happen. Over £1m has been spent on expensive consultants.”
If the Conservative administration loses its majority at the May election, it is thought that their preferred airport scheme will be thrown out by other councillors, who have long criticised the mooted partnership. There will now be serious questions about how much public money has been spent on pursuing the unpopular deal.
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