King's Lynn incinerator: No government cash for £33.7m penalty
- 22 May 2014
- From the section Norfolk
A council that abandoned a £500m incinerator project has been refused government help to pay a £33.76m contract cancellation penalty.
Norfolk County Council terminated the deal with Cory Wheelabrator for an energy-from-waste plant at King's Lynn.
The plea for help was answered in a letter saying "it was a private matter for the council to settle".
Local government minister Baroness Stowell said national taxpayers could not fund council penalties.
Council leader George Nobbs wrote to Prime Minister David Cameron and other government ministers last month to ask for financial help to meet the cost of the penalty.
He said in the letter that delays in reaching a decision by Secretary of State for Communities, Eric Pickles, had contributed to costs and made the project unviable.
Baroness Stowell answered on behalf of the government and said: "It is for the local authority to assess the risks and benefits of any local contract prior to agreeing to it.
"Therefore any need to pay a cancellation penalty is a private contractual matter and is for the local authority to consider how to meet such costs.
"It is not appropriate for national taxpayers to provide funding for penalty cost."
The county council cabinet must now review savings needed to meet the contract cancellation penalties as there remains a £4.4m deficit.
A report will be discussed at a full council meeting next Tuesday.
A further report is also to be drafted on proposals to sell the land on which the incinerator was to be built.