Agenda item

To consider and recommend to Council the increased borrowing required for the Poole Museum project of £1.3 million.

It is for Audit and Governance to be satisfied that the business cases are robust enough to generate resources to satisfy the associated debt repayments.

The Assistant Chief Financial Officer (CFO) presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'D' to these Minutes in the Minute Book.

In July 2023 the Committee agreed to reduce the Council’s debt threshold. It also agreed to strengthen the governance arrangements around any proposal to increase the debt threshold in future by requiring the Committee to consider the robustness of the ability of any significant new business case to service its debt obligations. In line with this decision the Committee was now asked to consider the business case to increase approved prudential borrowing to fund the Poole Museum project by £1.3 million. This was in relation to Cabinet and Council decisions in July 2025. The detailed financial forecast provided as part of the Cabinet report was included in the report to the Committee for reference.

The Assistant CFO, the Interim Museum Director and the Project Manager responded to questions on the report:

• On the level of confidence that borrowing repayments could be accommodated in the short term before income was realised, it was explained that repayments had been staggered and would increase over time. The project was considered to be affordable in the short and longer term. The business case had been conservative in estimating income and had overestimated in terms of costs and there was confidence that the visitor forecast and revenue potential would support the borrowing repayments. It was noted that the first week of partial reopening had been very successful.

• On how the increase in borrowing compared to the wider picture, it was confirmed that the increase was fairly insignificant within the Council’s overall debt and repayments.

• On the variances in fundraising, it was explained why the third party funding had been required to cover a new scope, but it was noted that this had still been beneficial in contributing to the original scope and business plan. The business plan had always included an assumption that borrowing may be needed to mitigate the risk of funding not being secured. It was noted that funding had been double counted in one instance due to clerical error.

• On whether the additional borrowing affected the external grants, Members were assured that there were no associated risks with partnership funding.

• On reasons for variances in expenditure, it was confirmed that this did include an increase in construction related costs, due to a number of factors affecting the industry resulting in significant prolongation.

• On business rates, a Member gave an example of where these had been successfully challenged elsewhere. It was noted that a potential rebate was under consideration, however Members were advised that this was a complex area.

• On the Museum project’s longer term sustainability, it was explained that National Lottery funding was supporting work to review the museum’s operating model and ten year plan and to develop a resilience strategy to ensure its long-term sustainability as a cultural asset for the community.

RECOMMENDED TO COUNCIL to approve the revised funding strategy for the Poole museums capital schemes which will mean an increase in the approved prudential borrowing of £1.3m.

Voting: Unanimous