Foreign investment enquiries falling, Telford & Wrekin council says
Foreign investment enquiries in Telford and Wrekin are “dropping” but companies are “offsetting” this by making other plans and picking up new contracts, a cabinet member has said.
Councillor Lee Carter, who holds the finance portfolio, said his administration had not done a detailed impact study because the UK’s exact route out of the European Union was unknown until very recently.
Ken Clarke, the authority’s chief finance officer, said the short-and medium-term economic outlook was “uncertain”, but not necessarily negative, and welcomed a rare increase in the government-provided Revenue Support Grant.
They were presenting a draft “Service and Financial Planning Strategy” to the Finance and Commercial Services Scrutiny Committee.
Councillor Carter said the proposed budget was “as balanced as it could be”.
He added: “We’ve seen some horror stories from, particularly, neighbouring authorities, where they have had to put in emergency spending controls."
In November 2019, Shropshire Council announced a spending freeze until the end of the year after confirming it faced a £6 million overspend.
Mr Clarke’s report said the administration was only proposing a one-year revenue budget.
A longer one was unsuitable, he wrote, because the government’s promised Comprehensive Spending Review was postponed and planned changes to the local government finance system were delayed by a year.
“This period of unprecedented uncertainty facing local government finance has been extended for a further year,” he wrote.
Conservative councillor Eric Carter said: “From the conversations I’ve had since the election, with certain ministers and other people, there is a strong feeling we will see the government spending on certain projects in the Midlands and the north.
“We’ve seen the rise in the pound, and a rise in the stock exchange. Certainly the City is happier.”
Labour councillor Kuldip Sahota asked Councillor Carter: “Have you done any survey or study about how Brexit will effect jobs and the economy in Telford and Wrekin?”
Councillor Carter replied: “We’ve not done a study on potential impact because, until recently, it was a case of ‘What is it?’.
“It would have been dedicating a lot of officer time to something that couldn’t be known.”
He said foreign inward investment enquiries had fallen in the borough, but that “has been offset by companies making other investment plans, or continuing plans they were always going to do”.
He gave a further example of existing companies switching from EU suppliers to domestic ones.
Mr Clarke’s report said “the uncertainties arising from Brexit are likely to create a high level of uncertainty over the medium-term projections within the CSR”, when it is published, and the impact EU withdrawal may have construction, tax receipts and household incomes “is currently very uncertain”.
He told the committee: “I haven’t said it’s negative. I’ve just said it’s uncertain.”