Post by Humberside on Sept 14, 2015 17:03:17 GMT
www.gazettelive.co.uk/news/teesside-news/durham-tees-valley-airport-owner-10047118
Durham Tees Valley Airport could close unless it is allowed to pull out of Teesside’s local government pension scheme, council chiefs are being warned.
But if the airport were to shut, the four Tees councils would be left to meet the airport’s liabilities to the Teesside Pension Fund - an estimated £6.5m.
Peel Group, which owns DTVA, has issued an ultimatum warning the airport will either close or be downsized to essentially a private aerodrome if the proposals are not agreed by the four authorities - Stockton, Middlesbrough, Redcar and Cleveland and Hartlepool.
The Gazette believes the airport has estimated its liability to the Teesside Pension Fund as £6.5m were it to cease trading.
Peel is now consulting with the councils on the airport no longer contributing to the fund.
The Local Government Pension Scheme (LGPS) is for local authority employees (or employees working for a body that is eligible to participate, such as DTVA) in the Teesside region.
Peel is telling Teesside council chiefs that leaving the pension fund is one of three vital measures that must be achieved for the airport to continue operating as it now does.
Cutting costs and allowing land on the north of the airport to be used for housing are the other two.
By transferring DTVA’s liabilities in the pension scheme to one or more of the shareholding local authorities, the airport is hoping to avoid exposure to the future funding uncertainty in the LGPS.
The Gazette also understands affected DTVA employees will be offered an alternative pension scheme.
Stockton South Conservative MP and Northern Powerhouse Minister, James Wharton, said: “People will be rightly concerned that this just makes it easier for Peel to close the airport if that is what they ever decide to do.
“It transfers the risk onto the Local Authority pension schemes.
“If this is the only deal on the table the councils need to be very careful before deciding and should ensure they get real guarantees about the airport’s future before making any decision.”
Durham Tees Valley Airport has declined to comment on the proposal being discussed with council executive members over the next few weeks, saying the proposal is “commercially sensitive”.
A spokesperson for Peel Airports said today: “We are, of course, in continuing dialogue with our local authority partners in our shared objective of securing the future of Durham Tees Valley Airport and putting it on sound financial and business footing.
“We are currently updating all the local authorities on the progress being made in implementing the range of objectives set out in the Airport Master Plan, including, for example the application currently before Stockton and Darlington councils for the construction of a new link and associated facilities which will open up development opportunities on the south side of the airport - a project to which the Peel Group has pledged £5m.
“As part of the dialogue with the local authorities we have also put forward to all the local authority shareholders a further proposal which believe is an important part of a package of key measures aimed at securing the airport’s future.
“This proposal, which is commercially sensitive in nature, is currently under consideration by all the local authorities and it would be wrong to comment further before all those considerations have been completed.”
As well as the four Tees authorities, Darlington and Durham are also shareholders in the airport, but are not members of the Teesside Pension Fund.
A spokesman for the six local authority shareholders, said: “Durham Tees Valley Airport is a key asset to the area and though the six local authority shareholders collectively own only 11% of the airport company shareholding, compared with Peel’s 89% stake, we are doing all we can to support the airport because we want it to stay open for business.
“In the coming weeks, the appropriate cabinets and committees of each of the authorities will receive an update on the progress of the proposals in the Airport’s Master Plan.
“They will also consider a further proposal from DTVA and Peel concerning the airport company. Details of this proposal are commercially sensitive and so, in line with standard exempt information procedures, cannot be considered in public.”
But if the airport were to shut, the four Tees councils would be left to meet the airport’s liabilities to the Teesside Pension Fund - an estimated £6.5m.
Peel Group, which owns DTVA, has issued an ultimatum warning the airport will either close or be downsized to essentially a private aerodrome if the proposals are not agreed by the four authorities - Stockton, Middlesbrough, Redcar and Cleveland and Hartlepool.
The Gazette believes the airport has estimated its liability to the Teesside Pension Fund as £6.5m were it to cease trading.
Peel is now consulting with the councils on the airport no longer contributing to the fund.
The Local Government Pension Scheme (LGPS) is for local authority employees (or employees working for a body that is eligible to participate, such as DTVA) in the Teesside region.
Peel is telling Teesside council chiefs that leaving the pension fund is one of three vital measures that must be achieved for the airport to continue operating as it now does.
Cutting costs and allowing land on the north of the airport to be used for housing are the other two.
By transferring DTVA’s liabilities in the pension scheme to one or more of the shareholding local authorities, the airport is hoping to avoid exposure to the future funding uncertainty in the LGPS.
The Gazette also understands affected DTVA employees will be offered an alternative pension scheme.
Stockton South Conservative MP and Northern Powerhouse Minister, James Wharton, said: “People will be rightly concerned that this just makes it easier for Peel to close the airport if that is what they ever decide to do.
“It transfers the risk onto the Local Authority pension schemes.
“If this is the only deal on the table the councils need to be very careful before deciding and should ensure they get real guarantees about the airport’s future before making any decision.”
Durham Tees Valley Airport has declined to comment on the proposal being discussed with council executive members over the next few weeks, saying the proposal is “commercially sensitive”.
A spokesperson for Peel Airports said today: “We are, of course, in continuing dialogue with our local authority partners in our shared objective of securing the future of Durham Tees Valley Airport and putting it on sound financial and business footing.
“We are currently updating all the local authorities on the progress being made in implementing the range of objectives set out in the Airport Master Plan, including, for example the application currently before Stockton and Darlington councils for the construction of a new link and associated facilities which will open up development opportunities on the south side of the airport - a project to which the Peel Group has pledged £5m.
“As part of the dialogue with the local authorities we have also put forward to all the local authority shareholders a further proposal which believe is an important part of a package of key measures aimed at securing the airport’s future.
“This proposal, which is commercially sensitive in nature, is currently under consideration by all the local authorities and it would be wrong to comment further before all those considerations have been completed.”
As well as the four Tees authorities, Darlington and Durham are also shareholders in the airport, but are not members of the Teesside Pension Fund.
A spokesman for the six local authority shareholders, said: “Durham Tees Valley Airport is a key asset to the area and though the six local authority shareholders collectively own only 11% of the airport company shareholding, compared with Peel’s 89% stake, we are doing all we can to support the airport because we want it to stay open for business.
“In the coming weeks, the appropriate cabinets and committees of each of the authorities will receive an update on the progress of the proposals in the Airport’s Master Plan.
“They will also consider a further proposal from DTVA and Peel concerning the airport company. Details of this proposal are commercially sensitive and so, in line with standard exempt information procedures, cannot be considered in public.”