Agenda item

Contact Officer, telephone number and email:

Robert Young; 01263 516162; robert.young@north-norfolk.gov.uk

Decision

RESOLVED:

To recommend to Full Council that £400,000 be allocated from the Business Rates Retention Reserve for the completion of the NWHSHAZ place-making scheme.

Reason for the recommendation:

This recommendation is made in order to deliver the additional town centre improvements as part of the HSHAZ place-making scheme.

The Portfolio Holder for Sustainable Growth, Cllr R Kershaw, introduced this item. He said that the earlier reference to the radio interview on the scheme was pertinent, because that had arisen due to the report being placed in the public domain. He agreed with Cllr Shires summary of the extensive consultation process for the scheme and said that it had been revised to accommodate the majority of views. He said that he firmly believed in the scheme. It had already generated additional business in the town.  It was well known that there were some people who were not supportive but this was always the case for any large project.

Cllr Kershaw explained that the original budget had been drawn up in 2020 and a lot of change had happened since then, including a pandemic and an economic crisis. He said that the Project Manager had had the foresight to pre-purchase a lot of the construction materials which had already saved a considerable amount of money. He reminded members that costs for the Kings Lynn HAZ scheme had increased by 48%, whereas the North Walsham scheme had increased by 18%.

Cllr E Seward said it was important to remember why the scheme had commenced. North Walsham Town Centre had been in decline for some time and to arrest this decline, there was a need to improve the environment of the town centre. There had been small projects undertaken in the past which had not been done properly. He went onto say that there were a small number of individuals on social media which said certain things about the project which had not truth in them. He gave the example of the travel hub and false comments that had suggested that the buses would not be able to turn and they would hit the bus shelters. This had not happened and since its opening, it was now a welcome improvement to the town.

Regarding inflation, Cllr Seward said that as Finance Portfolio Holder, he was concerned about escalating construction costs. It was a struggle faced by all councils but it must be remembered that the cost increases for this project were relatively low compared to others. He concluded by saying that, as a resident of the town, he was confident that the project would be completed and it would be done properly. Ultimately, people would say what a success it was.

Cllr N Lloyd said that he had been a resident of North Walsham for 40 years and during that time he had seen huge change – including housing growth and the closure of some businesses. Very little had been spent on the town and a project of this scale was well overdue. He said that Church Slope looked wonderful now. It was very unfortunate that there were a few, very vocal people who seemed to get all the media attention.

Cllr N Dixon said that he had no issue regarding the merits of the scheme or the impact of cost inflation on the purchase of construction materials. His main concerns focussed on governance and project management. The Overview & Scrutiny Committee had taken an interest in following the project and a report had been presented in September 2022 and several recommendations had been made. It came back in October with a more informed report. He said that the committee had spent some time discussing cost increase, labour shortages and how these were reflected in the Council’s risk register. The Committee had asked what the contingency fund was comprised of and specific information about this had been requested. However, it had never been provided. He went onto say that he had been surprised to see this latest report coming through to Cabinet requesting the substantial sum of £400,000. There had been no indication at the October meeting of the Overview & Scrutiny Committee that there was a shortfall in funding and it made the discussion about contingency funds even more relevant now. He said that he was very concerned that there had been no mention of this in October and he found it hard to believe that it was not on the horizon at all. It raised questions about the standard of governance and project management.

Cllr Dixon said that the report presented to members gave no detail at all about what the additional £400,000 would be comprised of. He asked how the contingency fund had been spent as again, no detail had been provided. He concluded by saying that £400,000 would have a huge impact on the Business Rates reserve as it held £600,000 in total. The Chairman asked that the information regarding the contingency fund was provided to the Overview & Scrutiny Committee as soon as possible.

Cllr R Kershaw commented that a lot had changed politically at national Government level since September, including a rapid rise in interest rates.

The Assistant Director for Sustainable Growth apologised for not providing the contingency data to the Overview & Scrutiny Committee. He said that the Market Place scheme works began in September and he had been focussing on working with the Quantity Surveyor and contractors regarding laying rates and this kind of detail informed the level of contingency. He explained that the scheme was a grand master plan exercise for North Walsham and there had never been a fixed scheme designed with a costed and fixed budget. This meant that the project was much more fluid because they were trying to do as much as possible with the funding available. In effect, this report was the contingency. The Council now wanted to do more with the project than the funding allowed. He concluded that he would provide a budget breakdown to the Overview & Scrutiny Committee.

Cllr L Shires referred to section 3.6 of the report and said it provided more detail on the costs.

Cllr C Cushing said that when the previous report came to Overview & Scrutiny Committee in September, it was essentially an ‘apple pie’ paper with just generic costs and no specific detail included. He said that for a project of this size, he would expect an in-depth breakdown of costs along with an explanation.

Cllr E Seward said that when the budget for this project was conceived in 2019/20, it was fixed, with certain funding allocations coming from various sources. Since then, the economic situation had changed considerably and the assumption that the budget would cover all the required works was just no longer feasible.

Cllr J Rest commented on the earlier reference to the quality of the Yorkshire stone used in a previous project in the town. He said that it had been purchased on the recommendation of a senior officer and wondered if there was a possibility of seeking compensation. Cllr Seward replied that this was being looked into as the stone was not of the high quality that would have been expected, given the cost. Cllr Gay said that she had queried the quality of the stone at the time and had been told that there was no issue. It was intended that it would be re-used as part of the HAZ scheme but it was not suitable as the quality was so poor. Cllr Gay then responded to Cllr Dixon’s comments regarding the governance of the project. She said that it had received more attention than any other Council project.

Cllr Dixon said that as Chairman of Overview and Scrutiny Committee, he would like to request a breakdown of the additional £400,000 funding. It was in the interest of public transparency. He added that there must be an impact of taking so much money out of the Business Rates Reserve and this should be monitored.  The Chief Executive replied that the Business Rates Reserve was historically generated at county level via a pooled mechanism. Previously it had been held by the County Council but two years ago it was agreed that the Districts should receive a share. He explained that no other projects would be impacted on or deprived of funding as the reserve was not currently allocated. The requirement was simply that it had to be spent on economic regeneration projects.

Cllr Seward reiterated that no other project would lose out by funding the Heritage Action Zone scheme. There were other projects that had been impacted by rising costs and inflation – such as the listed wall in Fakenham. Ultimately, the Council’s capital programme would not be delivered if these rising costs were not addressed. He added that the HAZ scheme budget was being watched extremely closely and had been since its inception.

Cllr Dixon said that he was relieved to hear that no other earmarked project would be affected, although removing such a large sum of money from the reserve would still have an impact. He said that members should recognise that by ‘plugging’ one gap they were simply creating another. The Chief Executive reminded members that this was a recommendation to Full Council and that no binding decision or commitment was being made at this meeting.

It was proposed by Cllr E Seward, seconded by Cllr R Kershaw and

RESOLVED:

To recommend to Full Council that £400,000 be allocated from the Business Rates Retention Reserve for the completion of the NWHSHAZ place-making scheme.

Reason for the recommendation:

This recommendation is made in order to deliver the additional town centre improvements as part of the HSHAZ place-making scheme.