Trafford Council has given £12.95 million to Manchester Airport through borrowing.
As part of a £260 million investment by all ten Greater Manchester councils made earlier this month, the council’s share of that investment was approved at an executive meeting.
In total, Trafford Council gave £12.95 million to the group as the airport is “a major generator of income” for both the authority and the area to support it through the coronavirus outbreak and its immediate aftermath.
At the executive meeting where the amount was agreed, it was also decided that the source of those funds would be through shareholder prudential borrowing.
The agreed increase to the council’s capital budget means the authority’s overall budget for 2020-21 has gone up during a time where councils are under particular financial pressure.
Predictions state Trafford Council could find itself up to £37 million down this financial year due to the impact of COVID-19.
The authority even had take out a two-week loan of £7 million earlier this month to resolve “cash flow issues”.
Some councillors have previously expressed concern over Trafford Council’s levels of borrowing, with the authority facing up to £80 million of loan repayments over the next 10 years.
Over the last three years in total, the council has borrowed up to £194 million as part of its investment strategy.
It could also have to repay almost £30m in loans in just one year in 2026.
However, council leader Coun Andrew Western labelled concerned interpretations of the authority’s investment strategy as “a worrying level of misunderstanding”.
A spokesperson for Trafford Council said: “The £12.95 million relates to the council’s part of the £260 million investment in Manchester Airports Group.
“Manchester Airport is critically important to the future success of the area. MAG is also major generator of income for the council which is used to help fund vital services.
“Together with the other shareholders in the airport – including the other nine Greater Manchester local authorities – we are investing to support MAG.
“Backing the airport will enable it to weather the current storm and come out stronger in the years ahead, ensuring that these benefits continue in the long term.
“Failure to act to support the group now would cost much more in the longer term.”
