To receive a report on progress with the Edgar Street Grid Project.

(Councillor Hubbard declared an interest)

The Committee received an updated report on the Edgar Street Grid Project. 

The Economic Development Manager reported that the budgets of Advantage West Midlands and the Homes and Communities Agency (HCA) had been significantly reduced and as a result the Agency had said that it might have to scale back some of the programmes to which it was committed.  The HCA had received a budget cut of £230m for the current year, with an additional £610m considered to be at risk. 

Given the uncertainty over funding, the ESG Board had decided to suspend negotiations with businesses in the second and third phases of the Link Road project.  This pause would not affect those businesses on the Livestock Market Site, nor those in the first phase of the Link Road.

The Chief Executive of ESG Herefordshire Ltd reported that all the businesses on the Link Road had been written to the previous week in order to appraise them of the situation, and they would be continually updated whenever there was additional important news.  All businesses had also been rung up to let them know what was happening as soon as the HCA funding had been suspended.  

The letter had consisted of four main parts:

• Reassurance that the Government was continuing to support infrastructure projects

• That a clearer picture regarding funding was expected by the end of the current year.

• That it was not clear what the funding position from HCA was

• That the Link Road had been registered with the Treasury for tax increment financing, a way of using future gains in taxes to finance current improvements.

The Chief Executive, ESG Herefordshire Ltd went on to say that a review of the business case for the Higher Education Centre was also underway, and discussions were taking place with Hereford United FC concerning options to redevelop the club’s grounds.

In the ensuing discussion the following points were raised:

• A Member raised concerns about the mixed messages that he perceived were being given out.  The Birmingham Post had announced the imminent demise of AWM, which did not bode well for the long term funding position of the project.  The businesses on the route of the Link Road were under a great deal of pressure as it was obviously difficult to formulate a business plan if it was unclear where the business would be located in 12 months time.

• In reply to a comment, the Sustainable Communities Director said that Herefordshire was in discussion with Shropshire and Telford & Wreakin councils regarding the Local Enterprise Partnerships that were likely to be instigated to replace the Regional Development Agency.  The councils wanted to be well placed in the Region in order to maximise funding opportunities.

• A Member said that whilst he supported regeneration in the City, he was concerned about the way it was being undertaken, and requested that a review of the support packages that were being provided to businesses should be considered in the light of the current economic climate.

• A Member replied that he believed that progress on the project to date had been transparent and had been fully endorsed by Council.  He suggested that the proposal was too narrow, and that should a review be considered, it ought to include the strategic direction of the project.

RESOLVED:

That:

a)      A Scoping Statement for a short Scrutiny Review of the strategic direction of the Edgar Street Project be considered at the next meeting; and;

b)     The Committee should receive a briefing paper on assets purchased by Advantage West Midlands pertaining to the Edgar Street Grid Project.