Agenda item

Report of Director of Tourism and Enterprise

Lead Cabinet member: Councillor Margaret Bannister.

(KEY) (1) That the progress to date of the scheme be noted. (2) To approve the proposed works to the Winter Garden and instruct the Director of Tourism & Enterprise and the Assistant Director for Legal & Democratic Services, in consultation with the lead Cabinet members for Tourism and Leisure Services and Financial Services, either to complete the relevant contract terms with Vinci Construction UK or to pursue alternative procurement arrangements as appropriate. (3) To approve the proposed revision to the capital programme, with the addition of a further £160,000 to enable refurbishments to the Winter Garden toilets to be reinstated, bringing the scheme to £53.96m gross (£48.36m net of guaranteed contributions) in order to deliver the whole scheme as recommended by the Project Board. (4) To note that the business plan is expected to meet target. (5) To note that the Council can take advantage of a VAT exemption which would increase revenues by a minimum of £250,000 per annum.

The Cabinet considered the report of the Director of Tourism and Enterprise updating them on the redevelopment of Devonshire Park, including the budget position and to obtain agreement for the refurbishment of the Winter Garden.

Councillor Tutt proposed that an additional £160,000 would be added to the scheme, to enable refurbishments to the Winter Garden toilets to be reinstated into the scheme. This was detailed in resolution three below.

The Cabinet was also advised of a revision to recommendation two to provide flexibility to the Director of Tourism and Enterprise and Assistant Director for Legal and Democratic Services, in consultation with the lead Cabinet members for Tourism and Leisure Services and Financial Services to complete the relevant contact terms with Vinci Construction UK, or to pursue alternative procurement arrangements as appropriate.

Visiting member, Councillor Smart addressed the Cabinet and although acknowledging the issues that were outlined in the report, raised concerns with the project’s rise in cost and cuts to the proposed works at the Winter Garden.

Visiting member, Councillor Freebody addressed the Cabinet and reiterated Councillor Smart’s comments. He highlighted concerns about the transparency of the project, overall net borrowing and capital expenditure.

The Cabinet responded and stated that key factors had led to the project exceeding its budget. This included the impact of Brexit on the price of importing materials and the supply of labour and sub-contractors, an overheated construction market, especially in London, as schemes were prioritised in order to obtain European Union funding, the scale and complexity of the scheme with a mix of new build and refurbishment and the risks attached to work in heritage buildings and scope increase and clarification of quality for elements of the scheme since the original budget was developed in autumn 2015.

The project was carefully managed by the Devonshire Park Project Board, represented by both political groups and had also been subject to quarterly progress reports to the Scrutiny Committee.

The redevelopment of the Devonshire Park Quarter was on schedule to be completed by March 2019. The cultural quarter would create around 100 additional jobs across the economy and compete for conference business worth around £10 million to the town’s economy.

Resolved (key decision):

(1) That the progress to date of the scheme be noted.

(2) To approve the proposed works to the Winter Garden and instruct the Director of Tourism and Enterprise and the Assistant Director for Legal and Democratic Services, in consultation with the lead Cabinet members for Tourism and Leisure Services and Financial Services, either to complete the relevant contract terms with Vinci Construction UK or to pursue alternative procurement arrangements as appropriate.

(3) To approve the proposed revision to the capital programme, with the addition of a further £160,000 to enable refurbishments to the Winter Garden toilets to be reinstated, bringing the scheme to £53.96m gross (£48.36m net of guaranteed contributions) in order to deliver the whole scheme as recommended by the Project Board.

(4) To note that the business plan is expected to meet target.

(5) To note that the Council can take advantage of a VAT exemption which would increase revenues by a minimum of £250,000 per annum.

Reasons for decision:

When the contract for the redevelopment was let to Vinci the work to the Winter Garden was reserved to allow more detailed investigations of the structure and an evaluation of the options. The contract with Vinci provides for this work at the Council’s discretion and it is now appropriate to finalise this element of the contract.

For the reasons set out in this report the costs of the overall scheme have increased and it is necessary to make an allowance for this in the capital programme.