A COUNCIL in the North-East is expecting to secure the millions of pounds it is owed in business rates by steel plant bosses as an agreement nears completion.
Budget papers, which are due to be released on Monday morning (February 17), are expected to set out Redcar and Cleveland Borough Council’s spending plans which should include the £9m it is owed by SSI UK.
However, the authority is remaining tight-lipped on the details of the budget plans until they are put online in preparation of its cabinet meeting due to take place later this month.
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A source close to the council told The Northern Echo that negotiations were ongoing but the payment of the debt was central to the authority balancing its books.
They said: “The company owes the council between £20m and £30m in business rates and the short term agreement was that they would pay £9m but that hasn’t been paid yet.
“Negotiations have been going on for a number of months between SSI and the council, and they are ongoing, but they promised this payment and it hasn’t arrived yet.”
The authority, along with others across the region, has had its grant from central government slashed in recent years.
Council chiefs have calculated they need to cut £19.4m from its budget over the next three years, and £33.8m by 2020.
It is proposed that £10.1m be cut from the 2014-15 budget but that figure does not factor in the non-payment of SSI’s unpaid debt.
The direct link was created when the government introduced the business rate retention scheme in April last year, which is designed to encourage business growth initiatives between companies and the local authority.
The Northern Echo reported late last year that negotiations were ongoing to reach an agreement with the local authority.
And in 2012 it was revealed that SSI UK, which runs Redcar iron and steelworks, was struggling to make ends meet as it dealt with the heavy costs of restarting production and low steel prices.
An SSI spokesman said: “A payment is due which is being addressed and we are communicating directly with the council over this matter.”
The council’s cabinet meeting is due to take place on Tuesday, February 25.