A town in Spain is demanding compensation for the alleged impact on its finances of British military bases in Gibraltar. La Línea borders the British overseas territory which is home to the Royal Air Force Gibraltar base and the Royal Navy Gibraltar Squadron. La Línea’s council claims the increased population resulting from UK military installations are a burden on services in the town, which the local authority insists is suffering from a subsequent shortfall in revenue.

Local officials now want a financial deal similar to arrangements in Spanish towns Rota and Morón where there are bases shared between Spain and the US. Naval Station Rota is a Spanish base used by both the Spanish and US navies. Morón Air Base is shared by air forces from Spain and the United States. The base is home to Eurofighter Typhoons and lies about 35 miles southeast of Seville.

Under current arrangements, people living in Spain’s Campo de Gibraltar area or nearby in the country but who work in Gibraltar pay taxes in the territory, prompting La Línea council to seek ways of making up the apparent shortfall, EuropaSur reports.

The demand for money from La Línea’s council is just one move to follow news of a new post-Brexit agreement struck between the UK and European Union over Gibraltar.

Since Britain voted to leave the bloc in 2016, the status of the territory and how to police its border with Spain have been bones of contention.

But the UK Foreign Office said earlier this month that the deal protects British sovereignty, Gibraltar’s economic prospects and its military autonomy.

The deal would also solve the need for checks and delays at the border, according to the Foreign Office.

But La Línea’s council has concerns about the potential impact of the post-Brexit agreement on their town. The town hall has proposed compensation and a share of revenues from an airport shared with Gibraltar.

Local government officials also want to set up a fund to cover the shortfall incurred from the cost of providing services and the amount of revenue it collects.

The Spanish Government reportedly provides Rota Town Hall with compensation for the naval base shared by the Spanish and US Armed Forces. Madrid also allocates 1.4 million euros to nine municipalities in Seville due to the Morón airbase.

The town hall in Barbate, a Spanish municipality in Cádiz province, has been pushing for similar compensation over the impact of the Sierra del Retín Training Camp.

La Línea council insists the new cross-border reality justifies the establishment of a special economic zone for the town, with tax incentives which would allow them to attract and retain companies in sectors such as tech, online gaming, insurance and finance.

The council also wants a cross border business scheme with tax rebates for SMEs which operate on both sides of the border.