Each year the difference between what we receive in income and have to payout in rent and service charges is in the region of more than £400,000.

To put that into perspective, to raise this sort of money then we would have to put Council Tax up by more than an additional 6%.

In the current economic circumstances, the council considers it should not subsidise the market to such a level, given the range of other services that are so important to our citizens.

More than 60% of our budget is funded by Government grants and, whoever
forms the next Government, there is a very real likelihood that the money we currently receive will be reduced.

Rather than wait to see what this reduction will be we have to plan ahead now to make sure that we are in a strong position financially for the future.

To eliminate the deficit the council's Cabinet has therefore taken the in principle decision to close the indoor market and sub-let it to a single retailer.

This decision was not taken lightly and we fully understand the impact that this will have on the traders, but the truth is that if we keep the market open as it is then we will have to make the savings somewhere else.

We believe that this money could be better spent elsewhere and protect
frontline services such as refuse collection, street cleaning, planning, housing and environmental health.

Q. But I use the market regularly and want it to stay open.

A. While we recognise that indoor Lancaster Market is a valued destination for many people in Lancaster, we have an entire district of more than 140,000 people to consider.

Although you may pay more than £1,000 in Council Tax, the city council
receives just 13% of the amount you pay (around £185 a year) to spend on its services.

People in other areas of our district also pay Council Tax and expect a good level of service from the council.

If Lancaster Market was to remain open then we would have less to spend on our frontline services.

The other two city council run markets in Lancaster – the Wednesday and
Saturday outdoor market and Assembly Rooms which are very popular – will
remain. Morecambe's Festival Market, which is also run by the city council, is also unaffected by the decision.

Q. Why don't you save money somewhere else?
Like every household and business the recession has meant that we have
had to look at ways in which we can tighten our belts.

Over the last year we've looked at every single area of our budget to find areas where we can save money. Before looking at saving on our services we've looked at the ways we can change the way we work and we are currently undergoing a major restructure of our workforce.

This will mean a reduction in senior management and other internal costs to protect frontline services.

This work will continue but we have also had to look at those services which are not achieving value for money. Given the current deficit of more than £400,000, Lancaster Market is clearly an area which is unsustainable in the current financial climate.

Q. Couldn't you keep it open for a bit longer and work with the traders to attract more stalls?

A. We have always wanted to make the market successful and have worked
with the traders over the years to achieve that aim.

Only a few years ago the market had an occupancy rate of more than 75%
and in a perfect world this would still be the case.

Unfortunately the recent recession has meant that the number of businesses in the market has reduced, while our costs have gone up.

While we could keep the market open while attempting to try and attract new stalls, this has been tried before and still we find ourselves in the situation we are currently in.

If we were to keep the market open we would also, of course, have to keep funding the deficit, placing other council services at risk.
It would also mean more uncertainty for the traders.

Q. The council has been running Lancaster Market down for years so
you can do just this.

This is simply not true. The council is committed to providing markets and operates three others in the district; the Charter Market and Assembly Rooms in Lancaster and the Festival Market in Morecambe.

All three of these markets are thriving and the ideal situation would be for Lancaster Market to also be fully occupied.

While we have tried every way we can to encourage more businesses into the market and make it a going concern, it has just not worked.

If the market was to run at a zero or small deficit then a case could be made for keeping it open. Unfortunately the current deficit means that closure is a sad reality of the current economic situation in which we find ourselves.

Q. So the council got a bad deal when it decided to lease the market
rather than owning it outright?

A. At the time the decision was made to lease the building the council felt thatit would be preferable to obtain a long lease on the building rather than own it
itself.
Owning a building outright also means substantial costs such as repairs and
maintenance. Many high street stores and other businesses rent their
premises because it makes more sense financially.

Q. I sort of understand why you want to close the market, but why have
you chosen this particular retailer?

Due to confidentiality reasons we cannot disclose the name of the retailer thathas been chosen.

However, you can be assured that we have looked into all aspects of the
company and Cabinet members were presented with a full assessment of the
options that were available to them and the risks involved.

Further details will be requested and undertakings will be needed before we sign any agreement with a retailer.

Even if,this particular retailer was unable to take up the Lancaster Market building, we remain committed to redeveloping the building for the use of a single retailer. Allowing it to remain open as a market is, unfortunately, an option that cannot be pursued at this time.

Q. What will happen to the traders?

A. Traders have known for over a year that the council was seeking a single occupier for the market and some stalls had already moved out.

The market has 29 stalls at the current time. We fully realise the impact that this decision will have on traders. Councillors and officers met with them this week to explain the council's decision, to hear traders' comments, answer their questions and set out the support the council will be able to offer.

Compensation packages will be available. In addition, the council we will do everything it can to help them to relocate elsewhere. We are investigating the possibility of increasing the number of days that the Charter Market opens and also relocation to the Festival Market in Morecambe.

Our Economic Development department will also offer advice and help to
traders.

Q. How many jobs will the new business create?

A. The new facility will create a significant number of employment
opportunities for local people and the £400,000 saved will enable a number of frontline jobs, such as street cleaning, to be preserved in the future.

Q. What happens next?
The in principle decision was taken by the Council's Cabinet last week.

The report they considered, and their decision, will now be considered by all 60 councillors, at Full Council on 3 March. If they approve Cabinet's decision then work to progress the decision, as set out in the minutes of the meeting, will take place.

Q. How can I find out more?

Council agendas and minutes are published online – http://ow.ly/1aI6H
Council statements on the subject are also available online -
http://ow.ly/1aGhn