By Stefan Morkis

DUNDEE CITY Council yesterday announced it has struck a deal to secure the long-term future of Dundee Airport— saving city taxpayers more than £1 million a year in the process.

Administration leader Jill Shimi confirmed operation of the airport will be transferred to the Scottish Executive-owned company Highland and Islands Airports Ltd (HIAL) in September.

The move was first mooted early last year after changes to route development fund rules opened up the possibility of the council off-loading the loss- making airport, and negotiations have only just been concluded.

As well as stopping the council’s losses, it is hoped that HIAL, which runs 10 airports and has a track record of attracting operators to start new routes, will bring more business to Dundee.

Currently, the airport offers just one scheduled service, operated by ScotAirways, between Dundee and London City.

The airport costs more than £2 million per year to run. The Executive only covered £800,000, leaving the city council to foot the rest of the bill.

Once operation is transferred that burden, which put £34 on the annual band D council tax bill, will finally be lifted.

Ms Shimi said yesterday, “This is a very successfully outcome for our aim of securing the long-term future of the airport and at the same time relieving the financial burden on the city’s council tax payers.

“The airport fulfils a vital role in providing a direct link between the city and London and has become an increasingly important asset for Dundee’s economy. The council has made considerable investment in the facility in recent years to ensure that it has remained so.

“However, operating the airport has meant increasing pressure on the council’s already limited budget and that is why we started negotiations.

“The Executive have agreed to the transfer and this will, I am sure, be welcomed by Dundee’s council taxpayers because it means that the £1.571 million that we were budgeting for the airport for 2007-08 will now no longer be needed.”

Mrs Shimi added that the news would make the process of setting this year’s council tax easier.

“Our target is a freeze on Dundee’s council tax and that is still very much the position,” she said.

“The Executive obviously recognised the fact that the city council was the only Scottish local authority that had to meet the cost of running a local airport—a facility used by businesses and people across the region and not just Dundee—and that the real cost of operating it was not reflected in revenue support grant arrangements.”

She also pledged airport staff would not suffer after the transfer takes place in the autumn.

“Discussions will now take place with the trade unions to finalise the transfer arrangements and they will include ensuring that staff will transfer on the same terms and conditions they currently have, including membership of the local government pension scheme.

“The city council will continue to support the airport because it will be working with HIAL to help develop new routes.”

Riverside councillor Neil Powrie said, “I am very pleased as it is a burden which has now been removed from the back of the council tax payer in Dundee.

“It has been an ever-growing expense so I’m delighted that HIAL are now taking over the responsibility of financing it and it is good news that both the Executive and HIAL see the airport as financially viable.”

Mr Powrie, who will retire as a councillor in May, added, “I was the only councillor in Scotland to have a council-owned airport in my ward and so that will be going along with me.”

SNP group finance spokesman Joe FitzPatrick said the airport was vital to Dundee in economic terms but it had been a heavy drain on council tax payers.

“We welcome the fact that the airport is to be moving away from the council,” he said.

“With all due respect to the council’s officers, they are not experts in running an airport and I would hope that its future will be brighter with people who are experts.

“Hopefully, new routes can now be developed, possibly to Amsterdam.”

Dundee East MSP Shona Robison had called for the airport to be transferred and welcomed the announcement, although she was sceptical about its timing.

“First of all, the SNP have been calling for this transfer for a long time now because we believe it is the right thing for the airport and its future and we will be seeking an urgent meeting with HIAL to discuss their plans for the development of the airport,” she said.

“It is also good news for the Dundee council tax payers— I’m sure that the timing of the announcement has nothing to do with the setting of council tax levels next week.

“However, it is good news on two fronts—for the airport, and for the hard-working council tax payer in Dundee who, for too long, has had to pay some of the highest council tax bills in Scotland.”

Stewart Hosie, her counterpart in Westminster, added, “The SNP are delighted that this transfer appears to have finally come about as it is great news for the council tax payers in Dundee and I am looking forward to HIAL bringing more routes to Dundee.”