The fracking millions... local benefit or ‘bribe’?

Prime Minister David Cameron, yesterday, said councils would be allowed to keep 100 per cent of business rates collected from the shale gas schemes – which could be worth up to £1.7m from each fracking site.

Energy minister Michael Fallon added local councils could also benefit by up to “£10m per wellhead” if shale gas was successfully extracted, through a one per cent levy on revenues.

And energy firm Cuadrilla, which wants to drill for shale gas at several Fylde coast sites, has also pledged to give £100,000 for every well it fracks to The Community Foundation of Lancashire.

The Accrington-based charity has told The Gazette the cash would be earmarked for the communities where drilling takes place.

However, the local cash boosts announced by the Government have been labelled “straightforward bribes” by anti-fracking campaigners, who say the cash will not take into account environmental 
impact or address fears over a lack of regulation of the industry.

And one Fylde coast MP has described the cash offers as “crumbs” compared to the profits which could be made from the new UK shale gas industry.

Conservative MP for Preston North and Wyre Ben Wallace said the business rates offer did not go far enough.

He added: “The problem with the business rates scheme is it’s subject to the Government changing its mind or there being a change of Government.

“If this does go ahead we in Lancashire should get a proper share and it shouldn’t disappear to the Treasury. What we want is a sizeable amount for the region.

“There is potentially £266bn of extractable gas in the Bowland Shale and it is only right Lancashire gets to keep a sizeable proportion of the profits.

“The Government will eventually take 62 per cent tax on a gas pad which could amount to billions. Many of us feel the Treasury should take a little less and the county get a little more.

“The announcement of giving back £850,000 of business rates is welcome because it shows the Treasury accepts that shale gas revenues can be hypothecated. But the money on offer is crumbs compared to what they will take.”

It is not yet clear how the business rate cash would be divided up between Lancashire County Council and local district councils.

When asked about how cash will be distributed among local authorities, a spokesman for the Department for Communities and Local Government, said: “We will be looking at how to divide up the money between the county and the district councils.”

However, The Community Foundation of Lancashire told The Gazette the £100,000 per wellhead offer from Cuadrilla would be used for the benefit of the affected communities.

In other words, a Foundation spokesman said, a wellhead fracked in south Fylde would see the money go to south Fylde communities.

A fracking site could have a number of wellheads.

The Foundation spokesman added: “We are an impartial and independent charity and will manage the funds independently of Cuadrilla and entirely for the benefit of the local communities for who each fund is intended, within Charity Commission guidelines.”

Cathy Elliott, chief executive of the foundation, added a community panel would be set up to decide how the money would be spent.

In the past the foundation has helped such groups as Blackpool Carers.

She said: “We will ensure funds are effectively managed to deliver the greatest possible social benefit.”

Francis Egan, Cuadrilla’s chief executive, said: “The Foundation is an excellent partner with a strong track record of working with communities to help identify appropriate causes and means of disseminating these community funds.

“We are committed to being a good neighbour and it will be for local people to decide for themselves – with the help of the Community Foundation for Lancashire – how this money will be spent.”

Despite Government claims communities which host fracking sites would see a cash windfall, opponents were quick to shoot down the offers.

They are fearful of the potential affects on the local environment of shale gas extraction by way of hydraulic fracturing – or ‘fracking’ – whereby water and chemicals are blasted deep underground to free the shale gas.

The concerns include potential water pollution, and earth tremors.

Gayzer Frackman, of the Frack Free Fylde pressure group, said: “They mention money will go to local communities but there’s nothing to address the health issues (of fracking).”

Tina Rothery, of Residents Action on Fylde Fracking, added: “For whatever they give the community they are not telling us the cost of what it will be to have fracking in the town. What about the damage to the roads from lorries? Who will pick the cost of that up?

“It’s such a short-term industry. What happens in 15 years when they have already caused a lot of damage?”

Mike Hill, from Defend Lytham who has consistently called for regulation, said: “It’s insane David Cameron is announcing the introduction of extra cash for councils.

“We all know it’s a straightforward bribe to see cash strapped councils go for fracking.

“We fully understand why councils would be tempted because they need every penny they can get, but you can’t judge people’s health against that extra money. You can’t put a price on these things.”

Philip Mitchell, spokesman for Blackpool and Fylde Green Party said: “More council funding needs to be made available, but not in this way.

“Councillors tempted by these tax-break bribes will bring misery to our communities, through the impact on tourism or agriculture, local harmful pollution, or climate change.

“The money is just a bribe to allow the industry to get it’s foot in the door locally. It will divide communities, many of which will never be the same again, and it won’t help those concerned about the growing evidence of fracking’s harmful impacts.”

Lancashire has been identified as having 200 trillion cubic feet of potential shale gas reserves, and plans have been announced for over 840 wells over the next 16 years.

Cuadrilla began drilling at Preese Hall, Weeton, in 2010, but said no further work would take place after two earth tremors in 2011.

Work has also stopped at the Anna’s Road site in Westby.

Grange Road, Singleton has been drilled, but not fracked and there is also permission for a site at Inskip Road, Wharles, and in Kirkham.

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‘We will talk to you’ says council chief

Fylde Council leader Coun David Eaves today said not enough detail had yet been revealed for an informed decision to be made on the announcements made by the Government and Cuadrilla.

But he insisted the council would “absolutely” consult with residents over the matter.

Coun Eaves said: “A lot of it is very early news.

“The devil is always in the detail and we will be very interested in reading the full detail when that is actually released.”

Leader of Lancashire County Council, Coun Jennifer Mein, added: “As exploration is still in its very early stages it’s not yet clear whether, and on what scale, a shale gas industry could develop.

“It’s therefore difficult to say what the impact upon local people could be or whether what’s being proposed is an appropriate level of remuneration.

“A notice of motion recently agreed by the council focused on the need for local planning control to be maintained, and for the Government and industry to investigate and address concerns about the safety of the process for people’s health and the environment.

“There is a considerable level of interest in developing Lancashire’s shale gas reserves and it’s vital that any commercial proposals put forward in future demonstrate the maximum economic benefit to communities across Lancashire.”

Bev Robinson, chairman of Blackpool, Fylde and Wyre Economic Development Company, the body which aims to bring new 
investment to the Fylde coast, said the EDC will be participating in an independent national supply chain study into the needs of the shale gas industry, which is due to be carried out by Ernst and Young..

She added: “We are aware of the announcement relating to business rates and await further details in the coming months.

“The EDC is pleased to see confirmation of this scheme administered through the well-established Community Foundation.”

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What the Prime Minister had to say:

“A key part of our long-term economic plan to secure Britain’s future is to back businesses with better infrastructure.

“That’s why we’re going all out for shale. It will mean more jobs and opportunities for people, and economic security for our country.”

On a visit to Lincolnshire, he added: “We have the strongest environmental controls in this country. Nothing would go ahead if there were environmental dangers. I think people can be reassured by that.”

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