Agenda item

C Howard introduced the a report which requesting a recommendation for MCA approval of three schemes with a total value of £8.18m from the Getting Building Fund (GBF).

On 30th June 2020 the MCA was awarded £33.6m GBF to invest in ‘shovel-ready’ projects that would provide stimulus to local economies.  The funds need to be defrayed by 31st March 2022 which allows an 18 month delivery window.

The Appraisal Panel Summary Table attached at Appendix A to the report asked the Board to take a decision whether to support the proposal of a GBF grant of £4m to Sheffield City Council for a Sheffield Heart of the City Breathing Spaces scheme to enhance the city centre by creating three new spaces including a pocket park, a vibrant small square on Carver Street and expansion of the Peace Gardens between the Town Hall and the proposed new hotel on Pinstone Street.  

Total costs are £12m with £4m GBF grant alongside Sheffield City Council investing £6m and a further £2m is applied for through Transforming Cities Fund (TCF) funding.

The new spaces adjoin developments in the £480m Heart of the City2 (HoC2) project which aims to increase attractiveness to occupiers and visitors.

The project is integral to the aims and objectives for the wider HoC2 scheme an assessment of the Benefit Cost Ratio (BCR) that could be associated with the full £42 million of public funding required for the wider scheme has been undertaken.

The BCR suggested that the employment associated with the wider scheme would generate £328m in gross GVA over ten years and £127m in net additional benefits.  This suggested a NPV of £105m which, for £42 million of public funding, implies a BCR of 2.6:1.  Therefore £2.60 of net additional benefits would be generated for every £1 of public funding contributed.  This would represent value for money, in line with the benchmarks set by the DCLG 2016 Appraisal Guide.

Conditions include achieving planning permission for the new pocket park and development on Carver Street.  The project is also linked with a TCF proposal which aims to secure funding for Rockingham and Pinstone Street. Non delivery of the TCF scheme is likely to reduce value for money associated with HoC2, but will not compromise the case for this GBF funding. 

Councillor Johnson asked when the £2m grant from the Transforming Cities Fund (TCF) was likely to be released. 

L Thomas said that it was the intention to phase the City Centre scheme in order that work could progress without having to wait for the whole scheme to ready before bringing forward the £2m element. 

The Board considered and recommended the project for approval to the MCA.

The Appraisal Panel Summary Table attached at Appendix B to the report asked the Board to take a decision whether to support the proposal of a GBF grant of £2.18m to Rotherham Metropolitan Borough Council for a Rotherham Town Centre Masterplan scheme. 

The scheme aims to undertake public realm improvements and site clearance in Rotherham Town Centre as part of the delivery of the Masterplan.  The project involves public realm improvements to Bridgegate, Effingham Street, College Street and Howard Street, as well as the replacement of all existing street furniture and lighting. 

The project will also acquire and demolish the Higher Education (HE) hub and Riverside precinct to prepare land for future commercial developments, public realm and community space. 

The project requests £2.18m from GBF towards a total scheme cost of £4.05m.

The Board noted that, given the nature of the projects being brought forward (principally demolition and public realm works), there were limited direct employment and GVA impacts that will be generated by the proposed project.  However, without this project going ahead, future schemes, including the Rotherham Markets Complex redevelopment and the Forge Island development, would not be able to be brought forward as quickly as desired. 

The projects proposed in this application were fundamental in allowing the delivery of future schemes and it could be assumed that the completed schemes would generate significant employment and GVA benefits.  Aside from the economic benefits that might be generated in unlocking future schemes, there were a number of further economic benefits that would be generated through the projects included in this application:

·           20 safeguarded construction jobs.

·           6,165sqm of new public realm (through the Town Centre Public Realm Scheme).

·           0.22ha brownfield land remediated.

Based on the evidence above and the potential for the completed schemes which would be unlocked through the proposed projects in this application to generate significant economic benefits for Rotherham Town Centre, overall the project will represent value for money.

Whilst planning permission has been granted for the Riverside precinct site, negotiations are ongoing for both the Riverside and HE Hub site.  Any funding agreement would include provisions to ensure grant could not be drawn down on these elements until acquisition is in place.

The Board considered and recommended the project for approval to the MCA.

The Appraisal Panel Summary Table attached at Appendix C to the report asked the Board to take a decision whether to support the proposal of a

GBF grant of £2m to Rotherham Metropolitan Borough Council for delivery of a Century Business Centre Phase II scheme.

The Board noted that the Business Centre Phase II would create around 17,000 sq. ft. of new floor space for office and clean manufacturing “move on” space within B1 use class on an existing business park.

The project aimed to create high quality, publicly owned and operated employment space which will complement the existing space available for growing businesses. MCA funds will be used to fund all elements of the development; excluding prelims and site surveys that have already been paid for from the approved Rotherham MBC budget within the Council’s Capital Programme. 

The project requests £2m from GBF alongside a Local Authority contribution of £1.6m. 

The project was estimated to generate net additional GVA of approximately £21.8m over 10-year period for the SCR economy.  This equates to a return of £11.66 for every £1 of SCR MCA funding.  The project delivers 71 net additional jobs (81 gross additional) at a cost per job of £28,138.  On this basis the project represents value for money. 

The project applies for public money through a state aid route on the basis that the public funding should cover any proposed viability gap.  Rotherham MBC have proposed a viability gap of £2m which is the basis of the GBF offer.

The Board considered and recommended the project for approval to the MCA.

RESOLVED – That the Board considered and recommended for approval at the MCA:

1.      Sheffield Heart of the City Breathing Spaces proposal for £4m grant to Sheffield City Council subject to the conditions set out in the Appraisal Panel Summary Table.

2.      Rotherham Town Centre Masterplan proposal for £2.18m grant to Rotherham Metropolitan Borough Council subject to conditions set out in the Appraisal Panel Summary Table.

3.      Century BIC Phase 2 proposal for £2m grant to Rotherham Metropolitan Borough Council subject to the conditions set out in the Appraisal Panel Summary Table.