Agenda item

Report No: CAB/WS/19/026

Portfolio Holder: Cllr Jo Rayner                Lead Officer: Alex Wilson

RECOMMENDED TO COUNCIL: (19 September 2019)

That, subject to no further significant concerns or matters arising from the outcome of the public consultation:

(1)         The Final Business Cases for the Western Way Development (WWD), Bury St Edmunds and, as part of that wider scheme, the replacement of the Bury St Edmunds Leisure Centre be approved, allowing the project to be delivered on the basis set out in those Business Cases and the Council’s Constitution;

(2)         Subject to the updates in this Final Business Case, the Strategic Case for the WWD contained in the 2018 Outline Business Case be reconfirmed;  

(3)         Taking into account the outcome of the pre-application consultation, planning consent be sought by the Council and its partners for the WWD as described in the Final Business Case;

(4)         Provision of £300,000 be made from the Strategic Priorities and MTFS Reserve to fund the planning consent stage (i.e. (3) above);

(5)         Before any work commences on the tender pack(s) for any individual component of the scheme:

(a)     As set out in Paragraph 5.9.6 (a) of Part E of this Final Business case, the project must undergo a gateway review with an independent external expert to the satisfaction of the Council’s Monitoring and Section 151 Officers and the Cabinet;

(b)     Any public sector partners wishing to take part in phase 1 of the project will be required to enter into formal agreements to confirm the basis on which they will occupy the WWD and, in relation to their part(s) of the tender pack(s), to indemnify the Council for their share of its abortive costs if they subsequently withdraw or substantially reduce their requirements.  With the Council, therefore, only holding the investment risk of its own elements of the project (e.g. the commercial offices) which will be underwritten by revenue balances or reserves; and

(c)     Taking into account (a) and (b) above, the Cabinet will have adjusted the final phase 1 scheme so that it continues to meet the objectives set out in this Final Business Case, including the budgetary limits set out in (7) and (8) below;

(6)         If the Council is to be involved directly in their delivery, a separate final business case will be required for the projects to provide student accommodation for West Suffolk College and/or a pre-school as part of the WWD;

(7)         Excluding the costs and income relating to the leisure centre, pre-school building and student accommodation, the Council’s capital expenditure, through its capital programme, on the WWD be capped at a maximum of £112 million, funded at this stage by borrowing, subject to the Council’s Section 151 Officer being satisfied at all times that, under the adopted principles set out in the Outline and Final Business Cases, the WWD is capable of achieving at least a break-even position on this expenditure over the whole life of the project allowing for the management of cash flow risk; 

(8)         The Council’s capital expenditure, through its capital programme, for the replacement of the Bury St Edmunds Leisure Centre be set at £27.9m, funded at this stage by borrowing, allowing this element of the project to be delivered on the basis set out in the Outline and Final Business Cases and in accordance with the Council’s Constitution;

(9)         The Council’s Section 151 Officer make the necessary changes to the Council’s prudential indicators to reflect the direct cost to the Council of funding the project budgets set out in (7) and (8) above;

(10)      Provision be made from 2023/24 onwards for the revenue implications of the replacement of the leisure centre as set out in section 5.3.3 of Part E (Financial Case), with this funding being identified in the Council’s Medium Term Financial Strategy as part of the 2020/21 budget process;

(11)      Subject to consultation with the relevant Portfolio Holders and, if appropriate, the Council’s Monitoring Officer, the Council’s Section 151 Officer determine the most beneficial and economic funding method for the project, including entering into agreements with third-party investors if required; and

(12)   Funding bids be made to regional and national funding bodies to offset the project funding and cash flow risks and support delivery of the actual scheme.

(Report No: CAB/WS/19/026)

The Cabinet considered this report which recommended to Council, approval of the Final Business Cases for the Western Way Development (WWD), Bury St Edmunds and, as part of the wider scheme, the replacement of the Bury St Edmunds Leisure Centre, allowing the project to be delivered on the basis set out in those Business Cases and the Council’s Constitution.

Councillor Jo Rayner, Portfolio Holder for Leisure, Culture and Community Hubs, drew relevant issues to the attention of the Cabinet and particularly wished to thank Officers for all of the work which had been undertaken on the delivery of this project to-date.  Councillor Rayner also re-iterated that the Final Business Cases had been written on the basis that, having considered alternative options, Councillors and Partners had already agreed, in principle, to redevelop the Western Way site in the manner proposed.

The Director explained that although public consultation had already taken place on both the 2016 Masterplan and the future of the leisure centre, a further community consultation on the WWD had been carried out over the Summer and would close at midnight on 10 September 2019.  The main purpose of this process was an informal pre-application consultation for any future planning applications, given people the chance to influence the design and transportation aspects of the scheme. 

The Director provided a verbal update on this consultation.  In addition to over 30 forms completed at a drop-in exhibition on 6 September 2019, to-date over 250 people had completed the detailed online questionnaire.  The most prevalent topics were traffic, transport, parking and health and leisure facilities.  This feedback would assist in refining the proposals in the next stage of the project, if the Business Case was approved.  There were, however, no issues arising in the consultation that would prevent consideration of the Final Business Case, not least as many of the issues raised in the consultation would be thoroughly tested through the formal planning process.  After the consultation had formally closed, a short summary of the results would be provided as a report (to follow) for Council on 19 September 2019.  A full report on the consultation, with responses to all comments made, would then be included in any later planning application.

The Final Business Case was being recommended to Council on the basis of an external gateway review before making final decisions on the project.  This review was primarily to be focused on the financial and delivery vehicle aspects of the project, as these were the new dimensions compared to other hub projects.

As the Final Business Case demonstrated, having absolute certainty on the partner requirement would shape how the first phase of the project was tendered and then actually delivered.  The proposed design was flexible enough to adapt to however this requirement ended up.  Therefore, there was no reason to hold up a planning application.  However, the core focus of the gateway review was only ready at this point to be approved in principle and then clarified before the contractual spending decisions were taken.  Therefore, it was being proposed that this review was a condition of moving into the procurement phase of the project, rather than the planning phases and that the funding for carrying it out was rolled into the next phase of the project.  It was the intention for this review to be presented to Cabinet on 14 January 2020 for sign-off.

RECOMMENDED TO COUNCIL: (19 September 2019)

That, subject to no further significant concerns or matters arising from the outcome of the public consultation:

(1)         The Final Business Cases for the Western Way Development (WWD), Bury St Edmunds and, as part of that wider scheme, the replacement of the Bury St Edmunds Leisure Centre be approved, allowing the project to be delivered on the basis set out in those Business Cases and the Council’s Constitution;

(2)         Subject to the updates in this Final Business Case, the Strategic Case for the WWD contained in the 2018 Outline Business Case be reconfirmed;  

(3)         Taking into account the outcome of the pre-application consultation, planning consent be sought by the Council and its partners for the WWD as described in the Final Business Case;

(4)         Provision of £300,000 be made from the Strategic Priorities and MTFS Reserve to fund the planning consent stage (i.e. (3) above);

(5)         Before any work commences on the tender pack(s) for any individual component of the scheme:

(a)         As set out in Paragraph 5.9.6 (a) of Part E of this Final Business case, the project must undergo a gateway review with an independent external expert to the satisfaction of the Council’s Monitoring and Section 151 Officers and the Cabinet;

(b)         Any public sector partners wishing to take part in phase 1 of the project will be required to enter into formal agreements to confirm the basis on which they will occupy the WWD and, in relation to their part(s) of the tender pack(s), to indemnify the Council for their share of its abortive costs if they subsequently withdraw or substantially reduce their requirements.  With the Council, therefore, only holding the investment risk of its own elements of the project (e.g. the commercial offices) which will be underwritten by revenue balances or reserves; and

(c)         Taking into account (a) and (b) above, the Cabinet will have adjusted the final phase 1 scheme so that it continues to meet the objectives set out in this Final Business Case, including the budgetary limits set out in (7) and (8) below;

(6)         If the Council is to be involved directly in their delivery, a separate final business case will be required for the projects to provide student accommodation for West Suffolk College and/or a pre-school as part of the WWD;

(7)         Excluding the costs and income relating to the leisure centre, pre-school building and student accommodation, the Council’s capital expenditure, through its capital programme, on the WWD be capped at a maximum of £112 million, funded at this stage by borrowing, subject to the Council’s Section 151 Officer being satisfied at all times that, under the adopted principles set out in the Outline and Final Business Cases, the WWD is capable of achieving at least a break-even position on this expenditure over the whole life of the project allowing for the management of cash flow risk; 

(8)         The Council’s capital expenditure, through its capital programme, for the replacement of the Bury St Edmunds Leisure Centre be set at £27.9m, funded at this stage by borrowing, allowing this element of the project to be delivered on the basis set out in the Outline and Final Business Cases and in accordance with the Council’s Constitution;

(9)         The Council’s Section 151 Officer make the necessary changes to the Council’s prudential indicators to reflect the direct cost to the Council of funding the project budgets set out in (7) and (8) above;

(10)      Provision be made from 2023/24 onwards for the revenue implications of the replacement of the leisure centre as set out in section 5.3.3 of Part E (Financial Case), with this funding being identified in the Council’s Medium Term Financial Strategy as part of the 2020/21 budget process;

(11)      Subject to consultation with the relevant Portfolio Holders and, if appropriate, the Council’s Monitoring Officer, the Council’s Section 151 Officer determine the most beneficial and economic funding method for the project, including entering into agreements with third-party investors if required; and

(12)   Funding bids be made to regional and national funding bodies to offset the project funding and cash flow risks and support delivery of the actual scheme.