To receive a detailed update on the Towns Fund and Accelerated Funding Projects & review their status.
Minutes:
Following the briefings and discussions relating to its Towns Fund Cost & Delivery Risk Review, at the previous meeting on 28th October Crewe Town Board (CTB) had agreed that:
1) CTB would submit a request to the Department for Levelling Up, Housing and Communities (DLUHC), through Cheshire East Council as the accountable body, to withdraw the Lyceum Powerhouse project from its programme and the funding would be reallocated across other projects;
2) CTB agreed to delegate the decision on the amount of funding to be reprofiled across the remaining programme to the Chair and Vice Chair of Crewe Town Board, in consultation with the Towns Fund Sub-Group (TFSG).
Further briefing and communication regarding the proposed withdrawal of the Lyceum Powerhouse project had followed, including with the project team, local councillors, key stakeholders (through the Crewe Cultural Forum) and, informally, with DLUHC representatives. The Town Board’s decision was also endorsed by the accountable body (Cheshire East Council) at its Economy & Growth Committee meeting of 15th November.
Following on from the last Board Meeting and the decision to withdraw the Lyceum Powerhouse project and reallocate the resources, the Towns Fund/TIP Subgroup met on 31st October and 18th November to consider the next steps. After substantial discussion and the gathering of construction inflation evidence, the following was agreed:
1) Reallocation of grant monies would be made to protect each project`s outputs and outcomes from the impact of inflation;
2) Reallocation of grant monies would be used to meet the recommendations of the independent consultancies commissioned to carry out a review of risks;
3) Projects would be supported through a recognition of actual inflation since the initial project submissions and a forecast of construction inflation for the delivery years demonstrating fiscal responsibility over the medium term;
4) Reallocation of grant monies would not be used to rescope projects with all projects, except Repurposing Our High Streets (ROHS), being managed in the same way;
In response to comments and feedback received from board members it was reported that
· Warm and Healthy Homes – This was one of the projects where the budget had been reduced so had been scaled down significantly, but this was a project that would still be impacted by the increase and inflationary cost in building materials. The money could not be used as a contingency fund and technically this would not be in line with the guidelines from the DLUHC, as money would need to be allocated along the way.
· Caution was needed to make sure there was no project scope creep in respect of any further improvements;
· The proposals outlined above had been done so with support from Cheshire East Council’s finance team
· Communications – the proposals for the reallocation of monies needed to be open, transparent, fair and in an equitable way which was the rationale behind what was discussed in today’s meeting.
· Next steps would be trying to predict inflation using what had gone on already and what was expected in the future. There was the possibility that the same exercise would need to be repeated in the future.
The Development & Regeneration Delivery Manager provided a wider update on the projects. Although there were concerns around inflationary and delivery risks in the current climate, the board were reassured that the Currie and Brown report and the Ekosgen reports had looked at and addressed those risks as far as possible. There was also close monitoring by officers using the evidence that was available within the industry.
Next steps would include:
· Communications would be rolled out in the new year should approval be given to the reallocation of funds by government.
· Performance reporting was required by the Department for Levelling Up, Housing and Communities (DLUHC) every six months for every Towns Fund programme. Crewe Town Board would need to formally approve submission of these reports. The first of these reports would be submitted to DLUHC by 16 December 2022.
RESOLVED (Unanimously):
That Crewe Town Board agrees to the approach set out in the proposals outlined, and agree to this forming the basis of a Project Adjustment Request submission to DLUHC.