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Government Give £2.5 Million To The Wrong Newcastle

The government has been criticized after wrongly awarding £2.5 million to the wrong Newcastle.

Although one Newcastle is a quiet town in Staffordshire with a population of 74,000 and one is a bustling city in the North with over 270,000 residents, the similar place names confused council officials enough to make the foolish mix-up.

The massive cash reward was awarded to Newcastle City Council for promoting local firms, but it was given to the smaller Newcastle Borough Council instead. In fact, Newcastle Borough Council should have been awarded just £600,000 for the incentive, which gives councils back some business tax paid by local firms, in exchange for promoting them. The initiative saw the government award around £126 million to 270 councils in England in 2005. However, because of the complexity of the reward system, Newcastle upon Tyne City Council said that they only realized the money was missing at the start of 2008.

Simon Tagg, leader of Newcastle Borough Council, was shocked by the revelations. He said: “I am shocked that this has actually happened, that the government has got the two Newcastle’s mixed up. I think it's extraordinary and shocking. I'm flabbergasted.”

Councilor Tagg said the first he had heard of the government’s error was when the borough council received a letter last week, which discussed repayment methods. However, Mr Tagg stated that the borough council were reluctant to hand the amount back, as it was accepted in good faith. He said: “The council accepted this money in good faith. It was a large amount, but we assumed it was in recognition of the work we’ve done to encourage business growth in the borough. We want the Government to look at its figures again. If we do have to pay it back, it should be over 20 years. We can’t hand over £2m just like that.”

The Department for Communities and Local Government simply described their mistake as a “regrettable error”. A spokesperson said: “We are working closely with the councils involved, and are taking steps to ensure this does not happen again.”

The council will repay the missing money to Newcastle City Council, who is expected to invest it in council services such as improvements to services for the elderly, play schemes and youth services. However, it is unlikely that the amount will be used to reduce April’s council tax increase in the city, which is thought to amount to around 3.9%.

The government has been criticized after wrongly awarding £2.5 million to the wrong Newcastle.

Although one Newcastle is a quiet town in Staffordshire with a population of 74,000 and one is a bustling city in the North with over 270,000 residents, the similar place names confused council officials enough to make the foolish mix-up.

The massive cash reward was awarded to Newcastle City Council for promoting local firms, but it was given to the smaller Newcastle Borough Council instead. In fact, Newcastle Borough Council should have been awarded just £600,000 for the incentive, which gives councils back some business tax paid by local firms, in exchange for promoting them. The initiative saw the government award around £126 million to 270 councils in England in 2005. However, because of the complexity of the reward system, Newcastle upon Tyne City Council said that they only realized the money was missing at the start of 2008.

Simon Tagg, leader of Newcastle Borough Council, was shocked by the revelations. He said: “I am shocked that this has actually happened, that the government has got the two Newcastle’s mixed up. I think it's extraordinary and shocking. I'm flabbergasted.”

Councillor Tagg said the first he had heard of the government’s error was when the borough council received a letter last week, which discussed repayment methods. However, Mr Tagg stated that the borough council were reluctant to hand the amount back, as it was accepted in good faith. He said: “The council accepted this money in good faith. It was a large amount, but we assumed it was in recognition of the work we’ve done to encourage business growth in the borough. We want the Government to look at its figures again. If we do have to pay it back, it should be over 20 years. We can’t hand over £2m just like that.”

The Department for Communities and Local Government simply described their mistake as a “regrettable error”. A spokesperson said: “We are working closely with the councils involved, and are taking steps to ensure this does not happen again.”

The council will repay the missing money to Newcastle City Council, who is expected to invest it in council services such as improvements to services for the elderly, play schemes and youth services. However, it is unlikely that the amount will be used to reduce April’s council tax increase in the city, which is thought to amount to around 3.9%.

Source:
IC Newcastle
BBC

Seed Newsvine

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