Agenda item

To approve the recommendation from Cabinet - July Financial Monitoring 2022/23.

Consideration was given to the report which provided an update on the Council’s financial monitoring position for 2022/23, based on July Financial Monitoring. The report was presented to Cabinet in September 2022 where it was agreed that, in order to give effect to the recommendations from Cabinet, consideration and approval by Council was required in relation to the recommendation relating to the Forge Island Development. This was set out in Appendix 2 to the report. Appendix 1 set out the July Financial Monitoring position to provide Members with sufficient knowledge to agree the proposals.

Council was asked to give Cabinet authority to approve amendments to the Council’s Capital Programme in relation to the Forge Island leisure development, should it be necessary in order to secure best value for the taxpayer. The Council was progressing to deliver the redevelopment of Forge Island in line with the Town Centre Masterplan, with negotiations with private sector partners now reaching the final stages ahead of construction.

Development partners had been made aware, however, of issues relating to the funding of the Scheme due to the very recent volatility of the financial markets. This could pose challenges to private funders providing up-front capital within the requirements previously agreed by the Council. As such, the Council was in conversation with the Developer and the Council’s Finance Team and Legal Team to ensure that the changes to the financial market did not negatively impact the delivery of the Project or unnecessarily increase the Council’s liabilities. 

A report was due to be presented to Cabinet on 17th October that would set out the options available to facilitate delivery. If Council approved the above-mentioned recommendation, it would allow Cabinet to choose from the full range of options for delivery, including further supplementing or replacing what was expected to be privately raised capitals with the Council’s own borrowing and capital resources. Such an option could only be agreed by Cabinet if doing so would ensure that the Council could fulfil its best value duty by financing the scheme through the most cost-effective mechanism. This was a highly time sensitive decision and there were likely to be significant additional cost pressures should Cabinet not be in a position to decide on 17th October 2022. The time pressures were due to external factors not within the control of the Council.

Members raised a number of questions on the report. These included questions on whether reassurance could be provided that the Council would get value for money; why there had been a 60 year delay; whether a cinema was still the right option; whether the decision could be delayed to allow for further scrutiny; the impact of the current financial market on the viability and future of the Scheme; how the Council could improve public confidence in the Scheme; the need for proper scrutiny; the £11.4m overspend currently forecast by the Council; the flexibility of the Scheme; the personal responsibility of the Leader for the delivery of the Scheme; the sharing of the financial information prior to the meeting.

Some Members also offered their support for the Scheme, stating that it was vital to the Town Centre for it to go ahead.

In response to the questions, the Leader confirmed that this Scheme saved money; the Council would continue assessing the value for money situation; there could not be a delay as that would cost money; there had been wide consultation on the Scheme before the last election; it was important to act now; the Council would work on building confidence; the fine detail was absent as this was an ever developing situation; the financial information is available to all Members; the budget had always been balanced under Councillor Read’s leadership; the cinema would be one part of a huge leisure offer; the Scheme would be cost effective and would be going forward for scrutiny and the money could not be spent elsewhere. The Leader also stated that he would take personal responsibility for the delivery of the Scheme.

Resolved:- That the Cabinet have authority to approve amendments to the Council’s Capital Programme in relation to the Forge Island leisure development, should this be necessary in order to secure best value for the taxpayer.

Mover:- Councillor Read                         Seconder:- Councillor Lelliott