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Private Eye's Rotten Boroughs reports on the "vindictive pursuit" by South Tyneside Council of one of their independent councillors Cllr Ahmed Khan. The Council are taking legal action to seize his communications records to uncoover the identity of a whistle blower. The case concerns payments to Newcastle Airport executives.

The article says:

Newcastle Airport is majority-owned by seven councils in the north-east. When the £377m refinancing deal was agreed in 2006, the airport's executve directors, John Parkin and Lars Friis, were each paid a percentage of the loan as a personal bonus.

Between them they trousered £8.5m with the agreement of the airport remuneration committee, which included South Tyneside's Labour leader Iain Malcolm. the bonuses were not made public. The airport recouped slightly more than half  the money in an out-of-court settlement in 200. Parkin is now chief executive at Leeds-Bradford airport; Friis has since died.

Newcastle, Sunderland, South Tyneside, North Tyneside, and Gateshead, and the county councils of Northumberland and Durham, own 51% of the shares in the airport. While rest are owned by Copenhagen Airports. While Northumberland is run by the Lib Dems and North Tyneside has a directly elected Conservative mayor, the other councils are Labour. The Councils are known as LA7 and Council Taxpayers could end up having to repay this debt. South Tyneside Council says no dividend was paid last year.

Isn't the wider point that councils should not own airports? It would have been much better for the Council Taxpayers if the airport had been sold before 2006 and sought its refinancing in the market place accountable to real shareholders not councillors playing around with other people's money.

Leeds-Bradford Airport was sold in 2007 for £145 million. Leeds Council got £58 million, so did Bradford, some other councils go smaller share. Sounds to me like a better deal for their Council Taxpayers than the LA7 ones.

22 comments for: Why should local councils own Newcastle Airport?

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