Agenda item

(Cabinet Member with Special Responsibility Councillor Hanson)

Report of Assistant Chief Executive

(Cabinet Member with Special Responsibility Councillor Hanson)

Cabinet received a report from the Assistant Chief Executive to update Members on the River Lune flood defence scheme progress and funding matters, and agree the draw down and commitment of an additional portion of Environment Agency funding in order to undertake further critical work on design development and cost planning.

The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:

The officer preferred option is Option 2 to accept a further £2.3M EA FDGiA and use £532K to undertake further design development work in support of funding, planning and delivery of the Phase 3 Flood Defence Scheme.

This decision allows the council to progress the detailed design and bring more certainty to deliverability and costs in order to inform planning and statutory requirements and ensure the challenging contracting deadlines have the best prospect of being achieved.

As the council has progressed a phased tender under the WEM framework officers are confident all spend will be ERDF compliant and available to be used as match funding to ERDF grant should this be approved and accepted in future. 

While progressing further work does not commit the council to accepting ERDF funds, or progressing a full scheme, more detailed work has to be undertaken for there to be the chance of meeting ERDF contracting and delivery deadlines.  Option 2 also allows officers to continue to explore and confirm the appetite of the major businesses to assist with significant financial contributions and continue to investigate other potential public funding sources.      

Councillor Hanson proposed, seconded by Councillor Burns:-

“That the recommendations as set out in the report be approved, with a revision to recommendation 4 by way of the deletion of the second bullet point, and an additional recommendation as set italicized below:

 Members encourage those major businesses who have not yet committed an “in-principle” financial contribution to consider the  major benefits of investing in the scheme, as otherwise there may be insufficient funding to enable the project to proceed.”

Councillors then voted on the recommendations, as amended:-

Resolved unanimously:

(1)                That, on approval of the Phase 3 business case / financial appraisal, Members agree to accept an offer of approximately £2.3M Flood Defence Grant in Aid (FDGiA) and use up to £532K to undertake further design development work in support of funding, planning and delivery of the Phase 3 Flood Defence Scheme.

(2)                That delegated authority be given to the Financial Services Manager to update the General Fund Revenue Budget to reflect the design development expenditure and associated FDGiA funding as appropriate.

(3)                That officers continue to work with the major Caton Road business to negotiate / secure private funding contributions and also investigate any further public funding avenues to meet the full scheme construction costs.    

(4)                That agreement of the above continues to be on the basis that the scheme is wholly externally funded and that there is no commitment to allocate City Council capital or revenue funding;

(5)                That Members encourage those major businesses who have not yet committed an “in-principle” financial contribution to consider the  major benefits of investing in the scheme, as otherwise there may be insufficient funding to enable the project to proceed. 

(6)                That a further report is made to Cabinet to ensure financial, procurement, legal and operational implications are resolved prior to acceptance of any ERDF funding and private sector contributions; and before contractually committing to implementing the construction phase (Stage 2).

Officer responsible for effecting the decision:

Assistant Chief Executive

Financial Services Manager

Reasons for making the decision:

Economic Growth is a high level Corporate Priority for the City Council, the flooding risk to this important industrial area undermines business and investment confidence, and there is an acute need to promote this scheme to help secure its delivery.  The proposed course of action represents the most appropriate route towards achieving a positive outcome, both meeting the City Council’s regeneration objectives and having wider social, economic and environmental impacts.