Report of the Director of Planning and Property attached.
Minutes:
Councillors Michael Green, Jim Marsh and Barrie Yates left the meeting.
Council considered a report of the Director of Planning and Property that updated Members on the current position of the Preston, South Ribble and Lancashire City Deal and sought a view on the future of the City Deal.
It was reported that the City Deal is at a critical point in shaping its future. There are significant concerns around the City Deal finance model whereby costs particularly for highway infrastructure, have risen substantially. Furthermore income in to the City Deal model has not come forward as quickly as planned in the delivery of new homes and key sites such as Cuerden had been slower than forecasted. Furthermore, Central Government have changed key inputs such as the amount received on New Homes Bonus and there is ongoing uncertainty over the format of business rates.
The Leader of the Council wanted to make it clear that the current situation was not as a result of the previous administration. Councillor Margaret Smith, Leader of the Opposition acknowledged this and explained that she had been trying to get an update on the current position of the City Deal for some a considerable time. All members were strongly of the opinion that an independent external audit of all spend to date and in the future should be carried out as soon as possible.
Despite repeatedly asking for an update report from Lancashire County Council, one had not been forthcoming so one of the Council’s own Finance Officers had pulled together the detailed report that was now before members and which identified a funding gap of £141m.
If the City Deal was to continue, new arrangements needed to be agreed between the partners. The emerging revised Heads of Terms, would place significant financial risk on South Ribble Borough Council that all Members deemed unacceptable.
There were however, a number of current external funding bids under development for consideration for City Deal projects that if successful, could assist significantly in meeting the financial gap. One such example is the Homes England Small Sites Fund, which could add an additional £60m in to the City Deal model but was contingent on further housing coming forward in both South Ribble and Preston over a longer time period. There was however a strong feeling amongst Members that this money should stop within South Ribble has all the identifiable sites left, fell inside the borough.
Members were presented with three options to consider within the report that centred on the way forward. Whether to continue, withdraw or seek a revised deal. Key considerations were identified against each of the options and a revised set of recommendations were read out at the meeting.
It was moved by Councillor Paul Foster, seconded by Councillor Bill Evans and
RESOLVED (Unanimously):
1. That Council expresses its strong commitment to provide positive support to enable the City Deal to continue;
2. That Council expresses its deep concern at the current projected funding gap;
3. That Council agrees in principle to support the bid to Homes England Small Site Fund which could generate £60m income to the City Deal;
4. That Council accepts that the City Deal, as it currently stands, cannot commit to any further capital projects;
5. That Council requests an independent external audit of all spend to date, committed spend and future forecasts;
6. That Council does not accept the revised Heads of Terms for the City Deal as currently presented, and in particular will not commit to the transfer of risk;
7. That Council requests that the Chief Executive Officer and Leader of the Council continue negotiations with Preston City Council, Lancashire County Council, Homes England and the City Deal Executive with a view to exploring alternative arrangements in respect to the continuation of the City Deal; and
8. That a further update report be brought back to full Council on 27 November 2019.