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court ref no: CO/0893/97 ...
court ref no: CO/0893/97

A judge was asked to 'cast a sceptical eye' over claims by four South Yorkshire councils that the government promised to pick up the entire£240m cost of constructing the Sheffield Supertram.

Sheffield, Barnsley, Doncaster and Rotherham councils insist the former Conservative government gave a 'clear, unequivocal promise' that no part of the bill would have to be footed by local taxpayers.

And they are asking high court judge, Mr Justice Dyson, to order the government to pay up for the£115m 'shortfall' on the project which will otherwise inflate local council tax bills for years to come.

But government counsel, David Elvin, told the judge yesterday: 'It is important that your Lordship looks with a sceptical eye on many of the arguments put forward by the councils.

'The councils have to demonstrate that the government made an unequivocal committment that it was willing to underwrite all the risks of this project notwithstanding this was a South Yorkshire project promoted by the South Yorkshire Passenger Transport A

uthority, not the government.'

Mr Elvin said there was no dispute it was for the councils to prove they had a 'legitimate expectation' that the government would foot the bill.

Richard Mawrey QC, for the councils, earlier told the judge it was the

government's case the councils had 'deluded themselves' into believing they would have to shoulder none of the risks involved in the project and local taxpayers would never have to pay a penny.

But he told the court: 'Rightly or wrongly, they (the councils) embarked on Supertram in the belief that whatever the outcome of the construction and privatisation of Supertram, no significant part of the cost was going to fall on local taxpayers.'

He said the councils, along with the South Yorkshire Passenger Tranport Executive and Authority, were seeking to hold the Labour government to the assurance given by its Conservative predecessor in late 1990 that council taxpayers would not lose out.

The court heard it had initially been hoped that part of the construction costs would be recouped through privatisation once Supertram was complete. At one stage it was considered possible privatisation might yield as much as£74m.

But Supertram ran at a substantial deficit in its early years and no private operator has yet come forward who will operate the network without subsidy, let alone pay for the privilege.

Early hopes that private enterprise or the European Community might part-fund the project also came to nothing and there is a£115m shortfall in the construction costs.

Mr Mawrey has told the court that if the councils had suspected local tax-payers would be left to pick up any of the bill they would never have backed the project in the first place and Supertram would never have been built.

Rotherham, Doncaster and Barnsley councils would have found it 'politically impossible' to underwrite Supertram as it would benefit only Sheffield and its immediate environs, he added.

The hearing continues.

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