Rising inflation could eat into Colchester's regeneration plans
The town could lose out on £1m worth of funding which could be used to improve the area
Last updated 17th Feb 2022
Rising inflation could eat into an Essex town’s budget for regeneration projects such as deploying a 5G network and new youth facilities by more than £1m.
Colchester Borough Council was offered £19.2m from the government for its town deal programme last year, which includes regenerating the town centre.
But this envelope of funding could be worth less because of the increasing rate of inflation, according to Liberal Democrat Group Leader Mark Cory (Wivenhoe).
Officers answering questions from the council’s Scrutiny Panel last night (February 15) said inflationary costs had been taken into account.
Chairing the meeting, Cllr Cory asked if the council could request more funding from the government to cover any potential losses.
He said: “Just with the Bank of England looking at costs of inflation increasing to around 7 per cent within this year, just a quick calculation sees us at £1.2m-£1.3m just through inflation on the entire budget.”
Later he said: “I’m asking whether we can go to government because if we’re incorporating it, it means we’re probably doing less than we could have done because we’re understanding we can’t do as much because of the costs.”
Economic Development Manager Matthew Brown said there had been specific cost modelling for all the business cases involved in the town deal.
He told the meeting: “Certainly on the bigger projects, the higher risk projects, I can give absolute confidence that a great deal of work has gone on behind the scenes just to get really robust and realistic, just going back to that it’s an important word, realistic cost estimates for these business cases.”
Lindsay Barker, Strategic Director of Policy and Place, confirmed the council had asked the government for more money, but other authorities with town deals of their own are also likely to be asking.
There has currently been no commitment from the government beyond the current budget.
Earlier in the meeting, council CEO Adrian Pritchard revealed the total cost of all 14 projects was running over budget by £18,685, but he was “confident” the council could get back into the £19.2m envelope.
He said: “We’ve already had to, through the town deal board, actually look at how we allocate and reallocate funding to bring us back into that envelope of £19.2m.”
According to Mr Pritchard’s presentation, Colchester was one of 101 towns in England to bid for up to £25m in town deal funding.
An offer of £19.2m was made in March 2021, £1m for accelerated public space projects in St Nicholas Square and Balkerne Gate, and £18.2m for the main projects.
The main projects include urban regeneration, such as building new affordable homes in Greenstead, skills and enterprise infrastructure, such as improving Colchester’s youth facilities, and digital and physical connectivity, including a 5G network in the town centre and new walking and cycling routes.
According to the government website, the town deals to local authorities to deliver investment in regeneration and infrastructure, and are financed from the towns fund.