Newquay Airport to stay publicly owned

Sales to US private equity firm abandoned

Hotels and other businesses and investors will no longer be told to “back off, go away, wait” to build at Newquay Airport. That was the message from Cornwall Council’s new Cabinet which has binned the previous Tory administration’s attempts to hand control of the airport estate to an American firm, dubbed Project Corduroy.

The Lib Dem / Independent coalition Cabinet met on Wednesday to discuss a new strategy to ensure the long-term survival of the airport and its land, which is owned by Cornwall Council. That includes attempts to lower the subsidy paid by Cornish taxpayers to keep the airport running – currently around £4m a year.

Cllr Tim Dwelly, the Independent member for economic generation and investment, said: “To me and all of us on the Cabinet, we do not want to mess with this important asset and that’s why we took the decision to knock on the head the previous administration’s Project Corduroy.

“We think the years spent on the project were largely wasted. Not only did we spend over £1m paying consultants for something that couldn’t pass due diligence of our own officers, but it’s also noted that the proposal was to hand effectively control of our key asset to a billionaire private equity investor from California.”

He stressed that companies that wanted to invest and build hotels and other business space at the airport had previously been told to “back off, go away, wait” due to the Project Corduroy plans. We previously reported how the Marriott hotel chain was initially rebuffed by the council despite agreements that it could build a flagship hotel and conference centre on the airport estate. A deal has since been agreed.

“We’ve missed years of what could have been a productive time bringing investment to the airport land,” added Cllr Dwelly. “My main message today to anyone thinking of investing on the land is ‘we are open for business’.”

The proposal before Cabinet was to bring the whole airport and the development of of its estate under one roof at the airport company, which is run by Cornwall Council’s arm’s length company, Corserv. Cllr Dwelly said Corserv would be closely scrutinised by the council and there needed to be less of a “wall” between Cornwall Council and its companies.

Responding to concerns about Corserv overseeing the whole airport estate, Cornwall Council’s Lib Dem leader Cllr Leigh Frost said he’d asked for more transparency from the group of arm’s length companies, including quarterly reports for all councillors to scrutinise. Council chief executive Kate Kennally said that Corserv’s CEO Neil Edmond was keen on a new approach going forwards in respect to airport governance.

Cllr Dwelly said that Corserv’s aim was to make the airport “profit-making and no cost”. He added: “I think we cannot guarantee that and we need to be realistic that this airport will cost. You cannot have an airport in Cornwall that doesn’t cost us money. The question is how much and how we get that down.

“The last administration obsessed about this and how you could knock out the subsidy and everything would be fine. We don’t take that view – we think we can reduce the cost of the subsidy significantly, but we’re not under any illusion that it’s not easy to have an airport in Cornwall, but it’s a necessity.”

The meeting heard there was currently interest from 23 businesses in setting up on the airport estate, including hotels, business parks, delivery centres and the possibility of more solar. A solar array which is currently on the land makes the council £600,000 a year. There is also the possibility of strengthening ties with the Ministry of Defence.

The Cabinet is also keen to explore ways in which users, particularly of subsidised London flights, can contribute financially to the future of the airport. Cabinet member for transport Cllr Dan Rogerson said improving public transport links to the airport was vital for its long-term success.

Cllr Frost added it wasn’t about the council trying to make millions of pounds out of the airport, but it was about being “realistic” and ensuring the survival of the vital service it provides and attempts to reduce the cost to the taxpayer. “If we get a subsidy of £500,000 a year everyone will be absolutely happy. I’m not saying that’s the target, but we need to aim for as low a cost as possible.”

Cllr Martyn Alvey, who was part of the Conservative Cabinet which sought the private investor partnership, said everyone in the Tory group supports the coalition Cabinet’s bid to secure the future of the airport and to minimise the cost. “Every administration had had the ambition of the airport washing its own face. There’s an element of Groundhog Day in that it has never succeeded.”

He questioned what had changed between the new administration’s airport strategy and those prior to Project Corduroy. “I want an assurance it’s not back to Groundhog Day again.” Cllr Dwelly responded that what has changed is the urgent need to get businesses to invest in the land.

The Cabinet unanimously agreed to back the future direction for the development of the airport estate.