Agenda item

Report No:   CAB/SE/15/017

Cabinet Member: John Griffiths      Lead Officers: Steven Wood and Andrea Mayley

RESOLVED:

That the amendment and clarification of resolutions (1) and (2) at its meeting on 2 September 2014(minute 42 refers) in accordance with paragraphs 3.2 and 3.3 of Report No: CAB/SE/15/017, be approved.

RECOMMENDED TO COUNCIL: That

(1)     subject to the approval of full Council and the satisfaction of the Section 151 and Monitoring Officers, a commitment be made to the full £4,528,871 million programme of works for the provision of electricity to serve Suffolk Business Park, including an immediate financial allocation of £356,186 currently due on 27 February 2015, as detailed in Section 3 of Report No: CAB/SE/15/017;

(2)     subject to the approval of full Council and the satisfaction of the Section 151 and Monitoring Officers, delegated authority be given to the Head of Planning and Growth in consultation with the Leader of the Council to enter into an agreement or agreements to be entered into by St Edmundsbury Borough Council (SEBC) and the developer/landowner to enable the development of Suffolk Business Park and Eastern Relief Road to enable SEBC to realise a return on its investment in line with the principles approved in the Medium Term Financial Strategy; and

(3)     Council be asked to approve the financial allocation of £150,000 towards the costs of specialist advice for this project from reserves.

The Cabinet considered Report No: CAB/SE/15/017 (previously circulated) which sought approval for a number of issues connected with progressing the development of the Eastern Relief Road and Suffolk Business Park.

Members were firstly informed of a typographical error within the table contained in paragraph 4.1 of the report.  Item 3 made reference to a report marked with an asterisk – this report was CAB/SE/15/016, as previously considered on this Cabinet agenda.

Councillor Griffiths, Leader of the Council, drew relevant issues to the attention of the Cabinet.  He stated that:

(a)     a commitment was sought to forward fund electricity costs to serve Suffolk Business Park of up to £4,528,871, including making an immediate financial allocation of £356,186;

(b)     delegated authority was sought to be given to enter into the necessary legal agreement(s) by the Borough Council and the developer/landowner to progress the development of Suffolk Business Park and Eastern Relief Road to enable the Borough Council to realise a return on its previously approved £3 million investment; and

(c)     authority was sought to fund specialist advice of £150,000 in relation to the total project.

On 2 September 2014, the Cabinet resolved that delegated authority should be given to the Head of Economic Development and Growth, in consultation with the Leader of the Council, to make an application to the New Anglia Local Enterprise Partnership (NALEP) for a £3 million loan from its Growing Places Fund for electricity infrastructure works.  The Cabinet firstly considered it appropriate to amend the officer delegation contained in the original resolution to refer to the Head of Planning and Growth as the post for the aforementioned no longer existed.  It then considered a proposal to increase the amount of the loan agreed in September 2014 to £4,528,871 to ensure that the total costs of these works could be covered by the loan.  It was anticipated that Taylor Wimpey would contribute a further £1.4 million in relation to the residential development.

Early discussions with officers had indicated that the electricity infrastructure funding for Suffolk Business Park was the type of project that would be likely to be funded under NALEP’s Growing Places Fund programme.  It is anticipated the application would be determined at the LEP’s next Board meeting on 20 March 2015.

It was proposed that the loan (including interest charges) would be met from commercial lets as they came forward for Suffolk Business Park or by the commercial developer who would be appointed to bring the land forward.

The electricity works were proposed to be phased and therefore the provider would also require payments to be provided in stages.  The first payment of £100,000 had already been paid by Taylor Wimpey.  The second payment amounted to £129,786 and was required to be paid by 27 February 2015 (as a worst case).  The third payment of £226,400 was required in Quarter 2 of 2015.  These two outstanding payments equated to £356,186 which full Council was being asked to approve later that evening on the Cabinet’s recommendations.  This sum would be paid from the existing £3m allocation of funding approved by Council on 23 September 2014 if the loan from NALEP had yet to be remitted to the Council.

In addition, there were a number of areas of specialist advice that were required in connection with the project to ensure the Borough Council was working within the law and maximising its best consideration.  The table provided in 4.1 of the report set out the requirement and cost of each element.  The total request for this advice was a maximum of £150,000, approval of which was also sought from full Council upon the recommendation of Cabinet.

A detailed discussion was held and Members asked questions on a number of issues including:

(a)     the repayment terms and level of interest on the loan from NALEP (if the application was successful);

(b)     the likelihood of Taylor Wimpey allocating £1.4 million for the electricity infrastructure for the residential development;

(c)     the associated risks involved.

The officers responded accordingly, including that the second payment of £129,786, as extracted from the report above, would not need to be paid until 2 April 2015.

Members supported the recommendations, acknowledging that approval would help enable the entire project to come to fruition, and noted that the decisions required by full Council on this matter would be sought that same evening.

RESOLVED:

That the amendment and clarification of resolutions (1) and (2) at its meeting on 2 September 2014(minute 42 refers) in accordance with paragraphs 3.2 and 3.3 of Report No: CAB/SE/15/017, be approved.

RECOMMENDED TO COUNCIL: That

(1)    subject to the approval of full Council and the satisfaction of the Section 151 and Monitoring Officers, a commitment be made to the full £4,528,871 million programme of works for the provision of electricity to serve Suffolk Business Park, including an immediate financial allocation of £356,186 currently due on 27 February 2015, as detailed in Section 3 of Report No: CAB/SE/15/017;

(2)    subject to the approval of full Council and the satisfaction of the Section 151 and Monitoring Officers, delegated authority be given to the Head of Planning and Growth in consultation with the Leader of the Council to enter into an agreement or agreements to be entered into by St Edmundsbury Borough Council (SEBC) and the developer/landowner to enable the development of Suffolk Business Park and Eastern Relief Road to enable SEBC to realise a return on its investment in line with the principles approved in the Medium Term Financial Strategy; and

(3)    Council be asked to approve the financial allocation of £150,000 towards the costs of specialist advice for this project from reserves.