Agenda item

The report will follow in a supplementary pack for this meeting after it has been published for the meeting of Executive Committee (due for publication on Friday 2 May).

Please note that this item contains exempt information and may need to be considered in an exempt session.

The Regeneration Manager presented the report and provided background information to the report proposals. It was recapped that following a change in administration in 2024, decision had been taken by the Council to cancel the redevelopment of Redditch Library site, which initially left an underspend on the Town Investment Plan of £4.2 million.

In Autumn 2024, the Council’s newly appointed regeneration team reviewed the business model for the Digital Manufacturing and Innovation Centre (DMIC) – one of the projects comprising the Town Investment Plan – and identified potential to expand the development and increase the project’s financial viability by utilising the underspend from the cancelled library project.

A decision was subsequently taken by the Town Deal Board to expand the development and increase the amount of net lettable floorspace in the DMIC. A Project Adjustment Request (PAR) was submitted and signed off by the Ministry of Housing, Communities and Local Government (MHCLG) to utilise the £4.2 million library underspend of which £3.937 million could be allocated to the DMIC project. It was noted that the Council’s request for extended timescales for spending the Government’s Town Deal funding had also been agreed by the MHCLG, which allowed the Council until the end of March 2027 to spend this funding.

It was explained that this report recommended the sign off of the additional design and project management costs associated with the expanded development, which would increase the amount of net lettable space and make the DCIM more sustainable with expanded benefits. The report asked for approval of allocating additional design cost up to a maximum of £1.45 million. It was clarified that this figure would include any contingency sums built into areas such as construction estimates. The report also asked for allocation of additional project management services costs up to a maximum of £250,000, including contingency costs.

It was explained that a further report would be brought forward for Members’ consideration once designs were costed out and prior to appointment of a construction contractor. It was highlighted that all the funding utilised within the DMIC development was external funding, with no input from the Council’s revenue or reserves.

Following officer presentation, a Member asked for detail regarding the increase in floor and net lettable space resulting from expanding the project. In response, it was stated that the expanded DMIC would be designed to have a gross floor area of 2600m² as opposed to 1900m² in the original project proposal. The net lettable space of the DCIM would also increase significantly as a result of expanding the development, to 17,000 ft².

In response to a question, it was explained that the maximum £1.45 million design team costs factored in possible contingency costs that could arise. 

The Committee was reassured that the Towns Deal programme was on track to have all the MHCLG funding fully utilised by the deadline of March 2027. In It was stated that there was no comparable deadline for the Council to spend the funding that was within the now defunct Greater Birmingham and Solihull Local Enterprise Funding (GBSLEP), In relation to the Council’s funding within GBSLEP, it was explained that a bid would be submitted by June 2025 to recover this funding. It was reported by Officers that Solihull Metropolitan Borough Council (SMBC) had now recovered the funding it had in the GBSLEP funding ‘pool’ and Redditch Borough Council would be following a similar process to recover the funds that it had within GBSLEP.

In concluding this item, a Member commented on the impressive turnaround and positive prospects of the DMIC project.

On being put to the vote, the recommendations as set out in the report were endorsed.

RECOMMENDED to Executive Committee that:

1)    AHR Architects design team costs are increased up to a maximum of £1,450,000 for design of Redditch Digital Manufacturing and Innovation Centre (DMIC).

2)    Costs for Gardiner and Theobold (G&T) project management services for the DMIC are increased up to a maximum of £250,000.

RECOMMENDED that the Executive Committee NOTE:

3)    Any draw down of contingency is subject to approval by the Deputy Chief Executive (Section 151 Officer) in conjunction with the Assistant Director for Regeneration and Property.

4)    That the additional funding at recommendations 1 and 2 above utilises reallocated central government grant monies.