Chamber of commerce chief John Brown said scrapping the route from Newquay would ‘damage the local economy’
A view of Cornwall Airport Newquay(Image: Cornwall Airport)
One of Cornwall’s most influential business figures has voiced opposition to a proposal by Cornwall Council to discontinue the publicly subsidised air route from Newquay airport to London. The council’s cabinet is set to abandon the Public Service Obligation (PSO) service at a meeting tomorrow (Friday, February 13), in an effort to save millions of pounds.
The PSO is jointly funded by Cornwall Council, which owns Cornwall Airport Newquay, and the Department for Transport (DfT). Previously, the DfT provided 66.7 per cent of the funding. Its decision to reduce its contribution to 50 per cent is placing additional financial strain on an already financially stretched Cornwall Council.
The council has disclosed that if the service continues, it will likely necessitate a taxpayer subsidy of between £14m and £16m over the next four years – with Cornish taxpayers directly footing half of that bill.
This move follows the council’s failure to attract tenders during two PSO procurement bids over the past nine months. There is now a push for it to be replaced by a commercial operation, which would be unlikely to operate as frequently as the daily PSO flight.
John Brown, chief executive of the Cornwall Chamber of Commerce, has called for caution, stating that diminishing London connectivity when Cornwall is vying for national and international investment would be an “act of self-harm”.
He is calling on Cornish firms opposed to the loss of the PSO route to contact their councillors, Cornwall’s Liberal Democrat/Independent cabinet and their MPs, requesting they lobby the DfT to rethink its reduced financial backing for the PSO.
John Brown is chief executive of Cornwall Chamber of Commerce(Image: Handout)
Mr Brown said: “We understand the financial pressures – two procurement exercises failed to attract compliant tenders, the Department for Transport has cut its contribution from 66.7 per cent to 50 per cent and aviation costs have risen sharply.
“But the Chamber believes this decision carries risks that far outweigh the savings.”
He noted that the council’s own cabinet report acknowledges Newquay airport generates an estimated £100m in annual Gross Value Added to the regional economy.
“The PSO costs the council approximately £1.5m per year. That is a serious return on public investment and one that very few other council spending commitments can match.
“Businesses have consistently made clear that daily flights to and from London are of serious importance to help with talent acquisition, investment opportunities and business growth.”
‘Cornwall’s transport network cannot absorb this loss’
He continued: “What’s more, it’s important to recognise that Cornwall Council retains 100 per cent of business rates collected in the Duchy, forecast at around £270m.
“The council’s share of the funding gap between its affordability cap and the market price is around £250k-£500k per year, less than 0.2 per cent of annual business rates income. When businesses are facing rate increases of around 10 per cent in April, it is reasonable to ask whether a fraction of what is already collected could sustain a service that delivers on a key business priority – connectivity.”
Mr Brown addressed the business community: “Cornwall’s transport network cannot absorb this loss. Rail to London is chronically under-invested, expensive and frequently exceeds five hours. Recent severe weather has shown how quickly Cornwall can be cut off entirely.
“The council’s own report admits commercial operators ‘may not provide the same level of winter frequency or day-return capability’ and that ‘there is of course the risk that commercial routes and other commercialisation cannot replace the airport losses and the airport becomes unsustainable’.
“Removing another element of our transport network without a proven replacement is dangerous.”
Mr Brown described it as “disappointing” that the DfT is scaling back its support when regional connectivity ought to be a national priority.
“Cornwall is spearheading the UK’s future economy. Reducing London connectivity at precisely the moment Cornwall is competing for national and international investment would be a further act of self-harm.”