TPA – Keep Counting The Airports

The dubiously talented pool of non-job holders at the so-called Taxpayers’ Alliance (TPA), the Astroturf lobby group that still pretends to have more grassroots support than the People’s Front Of Judaea, has made a startling discovery: local authorities own property. This amazing fact was unearthed by the smug looking Chris Daniel, who has decided to tell only of its downsides.

So we find that annual running costs are £25 billion, but Daniel does not tell that, typically, a local authority’s property portfolio yields 20% of its revenue income. But we are told that these assets include hotels, three of which are Holiday Inns (there is a problem with Holiday Inns?), and even an airport. Just the one? Daniel ought to get out more: local Government has a hand in at least six airports.

And why should this be A Bad Thing? The company operating Luton Airport pays an eight figure annual sum as its concession fee. This feeds back into the authority’s finances and benefits the whole community. Newcastle Airport is 51% owned by the area’s local authorities and generated a profit of more than £19 million in 2009.

Perhaps the largest local Government participation in the airport sector is that of Manchester Airport Group (MAG), which is ultimately owned by the ten local authorities of Greater Manchester (Manchester City Council own 55%, with the other nine authorities having 5% each), and which runs Manchester, East Midlands, Bournemouth and Humberside Airports.

MAG employs 26,000 people directly – 19,000 of them at Manchester Airport – with tens of thousands more jobs being supported by the presence of the four businesses. On top of that, MAG distributed £26 million in share dividends in 2008, all part of those local authorities’ revenue income. So the wider community benefits twice over from local Government involvement.

Of course, property assets, which is what airports are, can be disposed of, and no doubt the TPA would welcome such moves, as they provide opportunities for the private sector, which bankrolls them. Indeed, Leeds Bradford Airport, formerly owned jointly by Leeds, Bradford, Wakefield, Calderdale and Kirklees Councils, was sold in 2007.

But those sales can only happen once, unlike revenue income.