Cuts or rises: toxic claim 'will hit council tax payers'

(Oli Scarff/Getty Images)

A council warned today that it faces borrowing money to avoid "impossible" 150 per cent tax rises after it was found liable for birth defects in a group who claimed their mothers were exposed to toxic materials.

Corby Borough Council, responsible for the reclamation of a former steelworks blamed for the defects, was found liable today at London's High Court.

Bosses today said the council had run up "substantial legal costs" battling the claim, and would most likely have to deal with the huge bill by borrowing money - the only alternative being impossible 150% council tax rises, or extreme cuts in services.

Chief executive Chris Mallender told a press conference the council has already paid £1.9 million in legal costs, and now faces a claim from the families' solicitor Collins for an additional £4.7m.

Simon Aley, head of legal and democratic services, said the only way to pay all of the costs in one go would require an impossible 150 per cent rise in council tax or cuts in services.

He said: "If we were to settle in one go then it would cost us about a 150 per cent rise in council tax, which is unacceptable, cuts of the level which is extreme, or borrowing, which is more likely, leading to more manageable cuts and some financing of interest charges.

"The good news is that Corby is a buoyant place.

"We believe the town can cope with the costs it faces and can continue to thrive.

"It's a huge impact and it's a huge impact on the people of the town.

"This is not about Corby Borough Council, it's about the people of Corby."

He said today's judgment had not dealt with the issue of compensation but said it is possible more people may come forward to join the actions.

Mr Mallender said the council's opposition to the claims was nothing to do with the cash it might be forced to shell out.

He said: "All the evidence suggests it would have been cheaper to settle earlier than to pursue and defend the case.

"We have run up substantial legal costs. We've run up legal costs so far of £1.9 million - that is money we have already paid and budgeted for.

"The council general budget in Corby is just under £12 million and £10 million is to pay for council employees, so you can understand what the impact on Corby as a town might be."

Mr Mallender said the claims dated back 12 to 24 years, and many mistakes made at the time had been accepted.

But he said the council was not prepared to apologise until a causal link was proved between the reclamation works carried out by the authority and the defects suffered by the claimants.

He said: "We are not yet at the point of saying sorry because nobody yet is responsible.

"We can't go round apologising to people for things which we are not necessarily responsible for.

"Our position has always been that there was no link between the reclamation work that was carried out in Corby in past decades and these children's birth defects. That is still our position."

He said the council needed time to reflect on the lengthy judgment before it decided whether to appeal or not, adding: "From day one we have had a great deal of sympathy for the families.

"We have done everything we could not to expose the families to undue stress.

"I think they are genuine and sincere in what they are trying to do and, as a consequence, we have every sympathy for them. We are also parents, grandparents and members of this community,

"In the circumstances, we would want to try to search out the truth and if someone was responsible we would want them to be held responsible.

"We have also said if that was proved to be the case then we would do the right thing. But we believe it would be irresponsible and improper of the council to settle if we did not have the evidence.

"We continue to sympathise with their circumstances. We regret that they have had to pursue this case over so many years and we, like they, would hope we can now draw this to a conclusion and everybody can move on."

He said any decision on whether to appeal against the High Court judgment will be taken by the full council in open session - not by officers.

Council leader Pat Fawcett said the authority accepted mistakes were made at the time of the reclamation works, but the council had changed since then.

She and Mr Mallender told the press conference Corby was voted the fifth fastest-growing town in the country for the past three years.

Ms Fawcett said: "There were mistakes at that time and we can understand why mistakes were made.

"British Steel closed and there were God knows how many unemployed in Corby, and it was trying to get industry into the town and things were done quickly - maybe more quickly than they should have been done.

"But I think people were acting in the best interests of the town at the time."

Mr Mallender said the town was continuing to grow, and expansion work, including a recently opened new swimming pool and new theatre under construction, had already been budgeted for and would be seen through to their conclusion.

He said: "This is something that happened between 12 and 24 years ago.

"This was a big clean-up which was completed in 1996. The town is already revitalised.

"Overall it is one of the greenest, cleanest, best places to live in the country."