Agenda item

BCP Council has successfully secured Town Deal funding to help deliver its Town Investment Plan for the regeneration of Boscombe Town Centre.

As part of this plan, the council proposed to acquire the 130-year-old historic Grade II listed Victorian heritage building, known as the Royal Arcade and transform it into a destination for retail, culture, leisure, learning, and creative entrepreneurship.

Officers have undertaken substantial due diligence, and due to the prevailing economic circumstances, project costs have risen to a level where existing approved council borrowings, Towns Fund and Heritage Lottery Fund grants are insufficient to bridge the gap in funding required to deliver the project.

Like many local authorities, the council is facing unprecedented financial challenges and needs to look carefully at council spend, ensuring that the statutory services that its most vulnerable residents rely on are maintained. The council must make sure it has a secure a sustainable financial future, and that means looking ever more carefully at where it invests.  

The purpose of this report is to advise that officers can no longer recommend support for the project beyond progression of the council’s planning application for the scheme and to seek approval for the reallocation of the remaining Towns Fund grant to other approved Town Deal projects.

Progressing the planning application may help to facilitate the private sector taking the scheme forward and engagement with stakeholders will continue to ensure the local community’s aspirations for the Royal Arcade are realised.

Reprofiling the Towns Fund grant, earmarked for the Royal Arcade, across other approved projects within the Boscombe Towns Fund programme will help to safeguard their delivery in the face of high inflation impacting costs and a challenging economic climate.

The Leader of the Council and Portfolio Holder for Dynamic Places presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'L' to these Minutes in the Minute Book.

Cabinet was advised that BCP Council had successfully secured Town Deal funding to help deliver its Town Investment Plan for the regeneration of Boscombe Town Centre, and that as part of this plan, the council proposed to acquire the 130-year-old historic Grade II listed Victorian heritage building, known as the Royal Arcade and transform it into a destination for retail, culture, leisure, learning, and creative entrepreneurship.

Cabinet was informed that officers have undertaken substantial due diligence, and due to the prevailing economic circumstances, project costs have risen to a level where existing approved council borrowings, Towns Fund and Heritage Lottery Fund grants are insufficient to bridge the gap in funding required to deliver the project.

Further to this Cabinet was informed that like many local authorities, the council is facing unprecedented financial challenges and needs to look carefully at council spend, ensuring that the statutory services that its most vulnerable residents rely on are maintained, and that the council must make sure it has a secure a sustainable financial future, and that means looking ever more carefully at where it invests.  

Cabinet was informed that the purpose of this report is to advise that officers can no longer recommend support for the project beyond progression of the council’s planning application for the scheme and to seek approval for the reallocation of the remaining Towns Fund grant to other approved Town Deal projects, and that progressing the planning application may help to facilitate the private sector taking the scheme forward and engagement with stakeholders will continue to ensure the local community’s aspirations for the Royal Arcade are realised.

Further to this Cabinet was informed that reprofiling the Towns Fund grant, earmarked for the Royal Arcade, across other approved projects within the Boscombe Towns Fund programme will help to safeguard their delivery in the face of high inflation impacting costs and a challenging economic climate.

It is RECOMMENDED that Council:-

(a)           approve option 2 to progress the scheme to planning approval only and request that DLUHC approve the remaining Towns Fund Grant for re-allocation across the remaining programme.

(b)           authorise officers to submit a Project Adjustment Request to DLUHC for reallocation of the remaining Royal Arcade grant towards other approved Boscombe Towns Fund projects.

(c)           delegate agreement of the grant re-profiling to the Director of Investment and Development, the Chief Operations Officer, Director of Finance and Director of Law and Governance in consultation with the Leader of the Council and Portfolio Holder for Dynamic Places.

(d)           approve the removal of £3.4m council prudential borrowing from the capital programme originally approved as part of the Towns Fund Update Cabinet paper on 11 January 2023.

Voting: Unanimous

Portfolio Holder: Dynamic Places

Reason

The making of a compulsory purchase order required to progress the project relies on there being no financial impediments to delivery of the scheme.

The use of further council PWLB borrowings to bridge the funding gap would place unacceptable pressure on the council’s capital and revenue budgets.

Currently there is no alternative identified funding stream that will meet the existing grant funding timescales.

The council is accountable for the Towns Fund grant and will need to ensure that it is properly invested within the required timescale to deliver intended outcomes.