Council attacks critics after financial fallout from Banbury's Castle Quay saga - but are they being fair?

Cherwell District Council has claimed its deputy leader of the opposition “ignores or misrepresents” information relating to Castle Quay, Banbury – but the facts appear to be on the councillor’s side.

Councillor Ian Middleton (Green, Kidlington East) came under fire last month for saying the financial fallout from the district buying the shopping centre and regenerating the waterfront had been “simply staggering”. He also said the council had rewritten its reasons for the deal as predicted revenue vanished from balance sheets.

“The report says that it should be noted that the Castle Quay development was undertaken as a long-term regeneration project,” he said.

“In the Budget Planning Committee meeting of February 27, 2018, it was said the acquisition of Castle Quay and investments in the project would generate additional income for the council.

“Now we see the reality, a fair bit of revisionism going on because now we are seeing the impact of the budget.”

In that address during a meeting to set the council's budget from April, Cllr Middleton noted a £4.3 million shortfall in anticipated revenue over this and the next financial year, including a £1 million drawdown from council savings to plug the gap publicised in July 2022. He also estimated that the centre and Castle Quay 2 combined is now worth £87 million less than its acquisition and development cost.

The council did not dispute those figures but submitted an astonishing rebuke.

A statement attributed to a spokesperson for Cherwell District Council said: “Officers have been in contact with Councillor Middleton regarding Castle Quay for over a year and have been providing him with regular, detailed and transparent communications.

“We are therefore disappointed that he continues to present a narrative which ignores or misrepresents factual information that has been shared with him."

Update on March 24th: In reference to the line above, the council has apologised to Cllr Middleton and wishes to retract it. We have kept it in as it is relevant to Cllr Middleton’s response below.

“We have made it clear that reports to executive and council which informed the decision to purchase Castle Quay were focused on town centre regeneration for the benefit of our communities.”

Those documents were kept confidential but the council’s performance, finance and risk report presented in July 2018, seven months after the purchase of Castle Quay was announced, reads: “The purchase of the site was principally as an investment, although this also means that the council can provide strong leadership in ensuring that this exciting development delivers improvements in the area.

“A full financial appraisal was undertaken but the investment of circa £60 million will generate significant revenues in excess of £5 million pa (per annum) that will fund the costs of development as well as contribute to the wider costs of our services for all of our residents, businesses and visitors.”

The council has been invited to provide information on how much overall profit or loss has been made in each year since the acquisition. The Local Democracy Reporting Service is awaiting a response.

In a statement, Cllr Middleton said he had found gaining clarity on Castle Quay “extremely challenging”, adding: “Whilst officers have indeed engaged with me, there has been a degree of obfuscation and resistance to dealing with the realities of the situation which has only served to heighten my concerns.

“Everything I have said both internally and publicly about Castle Quay has been backed up by facts, based on the somewhat limited information that has been made public.

“I find it very concerning that the council has chosen to characterise my comments in this way. As a business journalist and an elected councillor, I regard accusations that I have deliberately misrepresented the facts as extremely serious.

“For a council to be briefing against one of its own members in this way is highly irregular and of questionable purpose. I will be considering my position with regard to a formal response.”

The council also issued a statement from deputy leader Councillor Ian Corkin (Con, Fringford & Heyfords), who is also in charge of regeneration and economy.

“The council took the decision to purchase Castle Quay in December 2017 making it clear that the driving reason for the investment was economic regeneration,” he said.

“The council was provided with a sound business case prepared by external specialists so there can be no suggestion the decision was ‘irresponsible’.

“The recent cross-party Local Government Association Peer Review congratulated the council on the work that has been undertaken across the district, and special mention was given to Castle Quay and its role in invigorating Banbury town centre and the district as a whole.

“We have no plans to sell Castle Quay and look forward to bringing forward further regeneration projects in Banbury and across the district for the benefit of our residents and the local economy.”

Talking at a previous meeting, council leader Councillor Barry Wood (Con, Fringford & Heyfords) argued that “constant undermining of things that are going well in Banbury” is “not right and not appropriate”.

Talking about the Castle Quay, he added: “He (Cllr Middleton) seeks to denigrate the scheme and he seeks to denigrate Banbury.

“Banbury needed that investment to make it a destination, not just a place where people went to the shops.”

Councillor Adam Nell (Con, Adderbury, Bloxham & Bodicote), the district’s portfolio holder for finance, said: “All shopping centres around the country have suffered with the same things which have come from national and international events over which this council has no control.

“The alternative would have been to allow Banbury town centre to collapse with no shops and no services."