This report is due to be pre-scrutinised at a meeting of the Overview and Scrutiny Committee scheduled to take place on 23rd June 2022. Any recommendations that are made by the Committee on this subject will be reported in a supplementary pack for the consideration of the Executive Committee.
The Head of Planning, Regeneration and Leisure Services presented the Redditch Town Centre Regeneration Business Cases report for the Executive Committee’s consideration. In presenting the report, it was highlighted that since the original publication of the report, updated copies of the business cases had been issued in supplementary packs for the meeting.
In 2019, the Government invited over 100 towns across the country, including Redditch, to submit bids for a town’s deal. Redditch Borough Council had submitted a bid to the Government in January 2021 and had subsequently been awarded in excess of £15 million to spend on particular regeneration projects in the town centre. Whilst these projects had already been agreed, the business cases that had been developed for the report to the Executive Committee in June 2022 provided more detailed information about the actions proposed. The content of these business cases would inform summary statements to the Government, which were due to be submitted by 29th June 2022.
There were three key schemes in the Redditch Town Deal, which had previously been approved by the Government:
· Development of a Redditch Digital Manufacturing and Innovation Centre
· Redditch Town Centre Public Realm works
· Redevelopment of the Redditch Library site
In respect of the Redditch Library site, the Government had granted an extension for submission of a detailed business case setting out proposals for the future. This business case would be the subject of a further report to the Executive Committee, which was due to be considered in September 2022.
The business cases that had been submitted for the Executive Committee’s consideration had been drafted by external consultants, Mott MacDonald. Based on the company’s assessment, Members were advised that it was anticipated that the proposals for the Digital Manufacturing and Innovation Centre would be over budget by approximately £2 million. Similarly, the estimated costs for the public realm works were likely to be over budget, although there were actions that could be taken to address this, including through use of funding from other sources to cover the total costs.
In line with Government requirements, a Redditch Town’s Deal Board, comprising representatives of the public, private and voluntary and community sectors (VCS), had been established to consider proposals in respect of the Town’s Deal. The Board had been consulted on the content of the business cases prior to the Executive Committee’s consideration.
During consideration of this item, the Interim Section 151 Officer was invited to outline the financial implications of the proposals for Members’ consideration. The Committee was advised that, as part of the process, the Section 151 Officer needed to be comfortable with and to approve the business cases in order for the submission to the Government to proceed.
Members were advised that £8 million had originally been allocated to the Digital Manufacturing and Innovation Centre. However, the business case had identified that £10 million would in fact need to be allocated to this project. This estimate included a figure of £1.5 million that had been allocated to contingency costs, including the potential impact of inflation on costs. As construction was not due to take place until 2024, it was not possible to provide an accurate assessment of the likely costs of inflation at that point as it was possible that this would change over the following two years. A similar challenge was likely to impact on Town Deal proposals that were submitted across the country.
All of these points had been taken into account by the Interim Section 151 Officer when assessing the costs. Discussions had been held with representatives of the Greater Birmingham and Solihull Local Enterprise Partnership (GBSLEP) and, like other members of the LEP, the Council was eligible to bid for up to £1.5 million to help bridge the financial gap in this instance. There was also the potential for the Council to bid for grant funding from other external sources. In this context, the Interim Section 151 Officer was proposing that the Council should submit a bid to the GBSLEP to help fund the difference.
In relation to the projected overspend on the public realm works, it was anticipated that this would be lower than for the Digital Manufacturing and Innovation Centre. The proposals in relation to the public realm works actually comprised five separate business cases and would involve working with partner organisations, such as Worcestershire County Council. The projected overspend included contingency figures to help cover the costs of areas of risk, including costs arising due to inflation. It was anticipated that the overspend in this instance could be addressed from other sources of funding and in the long-term these works could lead to a reduction in costs for partner organisations.
Reference was made to the Overview and Scrutiny Committee’s pre-scrutiny of the report at a meeting held on 23rd June 2022. Whilst the Committee had not made any recommendations on the subject, Members thanked Overview and Scrutiny Members for scrutinising the detail contained within the business cases.
Following the presentation of the report, Members discussed a number of points in detail:
· The potential for the proposals in respect of the Digital Manufacturing and Innovation Centre and public realm works to have a positive impact on the vibrancy of Redditch town centre.
· The future consultation that would be held with the public and other interested stakeholders in respect of the proposals, including in relation to the plans for the library.
· The opportunities provided by the introduction of a Digital Manufacturing and Innovation Centre, including to help upgrade aging urban assets and to improve skillsets in the local workforce.
· The need for action to be taken to help attract highly qualified young people to live and work in Redditch, including young people who had grown up in the Borough who had received a university education.
· The timescales for commencing the works proposed in the business cases, subject to Government approval. Members were advised that construction work on the Digital Manufacturing and Innovation Centre could not commence until 2024, when the police were scheduled to have demolished the site. However, prior to that date, other action could be taken, including submission of a planning application for the site.
· The deadline for completion of the works. Members were advised that the proposed works would need to be completed by the end of the 2026 calendar year.
· The potential for new businesses, including restaurants, to be established in Redditch town centre as a result of the public realm works.
· The extent to which the Council could work with the police to provide temporary accommodation once premises at Middlehouse Lane had been vacated. Officers confirmed that conversations were being held with the police in respect of this matter.
· The work that had been delivered by other local authorities that had been awarded funding in the Town’s Deal process, including their plans in respect of accommodating rising inflation costs, and the potential for the Council to learn from this. Members were informed that a representative of the Department for Business, Energy and Industrial Strategy (BEIS) attended meetings of the Redditch Town Deal Board and had confirmed that the Council was adopting a similar approach to other local authorities in respect of this matter. The impact of inflation on costs would also need to be taken into account by the Government as part of the process.
· The delays that had been experienced in terms of the issuing of the business cases for the report. Officers apologised for the delays and explained that these business cases had been reissued to ensure that Members had access to the most up to date information prior to submission on 29th June 2022.
· The hard work of officers in preparing the report and liaising with the external contractors over the content of the business cases.
the two business cases, in respect of the Digital Manufacturing and Innovation Centre and the Public Realm works are endorsed and used to present summary information for submission to the Department for Levelling Up, Housing and Communities on the 29th June 2022.