Agenda item

Recommendations

1)       To seek approval from the Executive to  enter into the construction contract, including any associated project manager and supervisor appointments, to carry out the Whitby Maritime Hub Project on the terms principally contained in this report; and delegate to the Corporate Director of Resources in consultation with the Corporate Director of Community Development and Assistant Chief Executive Legal and Democratic Services to agree the final terms of the contracts, within the established budget.

2)       To note the risks highlighted in the report and the potential need for additional funding from the Council as set out in the financial implications section of the report. At this stage it is not possible to identify the value of any potential gap in funding but if Executive approval is given, there is a cost to the Council which represents the regeneration value of the scheme which will need to be met from Corporate resources.

Considered – A report of the Corporate Director Community Development seeking approval to enter into a construction contract, including any associated project manager and supervisor appointments, to carry out the Whitby Maritime Hub Regeneration Project on the terms principally contained in this report.  Approval was also sought to delegate to the Corporate Director of Resources in consultation with the Corporate Director of Community Development and Assistant Chief Executive Legal and Democratic Services to agree the final terms of the construction contract with the contractor within the established budget.

The Leader referred to two emails which had been received making representation on the item and which had been circulated to members of Executive prior to the meeting.

The Executive Member for Open to Business, Councillor Mark Crane, reported that the project had received strong local support including from the Whitby Town Board and local Members and had secured £10m from the Town Fund in 2020.  Planning permission had been obtained in August 2024 and the project was ready to move to construction.  There was strong interest from local companies to use the building once completed and the Council’s own Harbour Master would also be based there.  Once the building was at 60% use it would break even and additional use would provide a profit.

Councillor Crane referred to objections received and advised that the building was designed to flood with the ground floor being dedicated to maritime uses.  Concern had been raised in relation to the loss of parking spaces during construction, which would be alleviated through the increased use of park and ride. 

Councillor Liz Collings spoke in support of the project on behalf of the Scarborough and Whitby Area Committee.

Resolved (unanimously) –

1)      That approval be given to enter into the construction contract, including any associated project manager and supervisor appointments, to carry out the Whitby Maritime Hub Project on the terms principally contained in this report; and delegate to the Corporate Director of Resources in consultation with the Corporate Director of Community Development and Assistant Chief Executive Legal and Democratic Services to agree the final terms of the contracts, within the established budget.

2)      To note the risks highlighted in the report and the potential need for additional funding from the Council as set out in the financial implications section of the report. At this stage it is not possible to identify the value of any potential gap in funding but if Executive approval is given, there is a cost to the Council which represents the regeneration value of the scheme which will need to be met from Corporate resources.

Reasons for Recommendations

It will deliver the obligations to the Towns Fund programme for Whitby, whilst also ensuring that the community in Whitby is at the forefront of the opportunities have in the sector. 

The recommendations will produce the best benefit for the Marine and Renewable sector for Whitby and North Yorkshire.

The recommendations will also achieve the Council’s corporate aims and the Economic Growth Strategy.

Alternative Options Considered

Alternative options have been explored by officers to try to ensure that the funding is not lost if the decision is made not to proceed into construction of the Whitby Maritime Hub.

If the project does not proceed to the construction phase, then MHCLG guidance must be considered:

It is encouraged that, in the first instance, that Town Deals strive to achieve the outcomes as stated in the Heads of Terms.

If a project fails, then it is possible to move the money to another existing Towns Fund Project. MHCLG would expect a similar level of replacement outputs and outcomes.

The Town Deal accountable body would need to publicly consult about the change via the Town Deal Board.  The change would be subject to a Project Adjustment Request, signed off by the Section 151 officer and endorsed by the Town Deal Board. This would be subject to MHCLG approval.

Alternative options should ideally seek to support the maritime industry in Whitby and deliver some of the outputs that were stipulated in the business case for the project. There are no existing projects within the Towns Deal programme that would be able to deliver additional benefits for the Maritime Industry.  In addition, funding can only be reallocated to other existing projects in the Whitby Towns Fund programme if they can demonstrate need and will deliver additional benefits.  MHCLG have advised that the funding must remain in Whitby and they’re unlikely to approve any reallocation to Town Deal projects in Scarborough. Additionally, any change needs to be endorsed by the Whitby Town Deal Board. Existing Towns Fund Projects are:

·       Harbourside Public Realm Improvement

·       Old Town Hall

·       Broomfield's Farm Housing Development

Some of the funding may be used to enhance the Harbourside Public Realm Improvement project through variable messaging signs or extending the existing public realm scheme down New Quay Road. 

The Old Town Hall is a key heritage building in Whitby, due to budget constraints the project has been value engineered throughout its development to ensure that the main project objectives could be achieved. Currently, the project does not have a budget allocation to provide equipment associated with its use as a heritage facility and will be subject to a bid to the National Lottery Heritage Fund.  Therefore, if additional funding was allocated to the project from the towns fund, these costs would be covered, and additional services originally considered within the Market Place could be added back into its scope.

Providing grant funding to Broomfield’s Farm is subject to satisfying Subsidy Control principles which requires the council to demonstrate it is providing the minimum required grant to achieve the project objectives. It would be unlikely if extra funding was granted to the project that the council could demonstrate further need as any extra interventions would be seen as above and beyond the minimum required to deliver the project.

None of the existing Towns Fund projects would be able to utilise the full £10million and the level of outputs and benefits to the Maritime Industry make them unfavourable.

Two possible options were considered, which are currently outside the Town Deal programme, but could further support the maritime industry.  These were improvements to Eskside Wharf and the Fish Quay. Both projects are at different stages of development and further work would need to be carried out to assess how this funding would benefit the projects.

All of the above options would be subject to further development work, require public consultation via the Town Deal Board, endorsement by the Board and NYC and be approved by MHCLG through the Project Adjustment Request procedure.  Not only does this carry the risk of not gaining the required consents, but it would also take a considerable time, therefore increasing the risk that the funding would not be spent during the Towns Fund programme.

If it cannot be utilised, the £10m Towns Deal funding would have to be returned to Central Government which would carry a reputational risk to North Yorkshire Council both with Government and the local community.