Council struggling to be open on most important decision for a generation . . .
LAST week, we learnt that the plans to bring a ‘world famous’ hotel chain to Rawtenstall had been scrapped.
Back in July, Rossendale Council said a hotel would anchor the multi-million pound Spinning Point development, which will be built on what is now the Town Square.
Instead, 29 apartments will be built on top of a number of shops and, perhaps surprisingly, Rossendale Council and its partners have decided what the town really needs to have is a luxury spa.
While the Spa decision is perhaps curious, the decision to swap the hotel for flats makes sense. For town centres to thrive in the future, they need people living in them. This will help achieve that.
But as with so much of what is arguably the most important decision the council will take for a generation, the council continues to struggle to be open with what is happening.
After announcing the hotel plans over the summer, the council’s leadership set up a working group to review the plans, at the suggestion of the opposition Conservative Party. That was progress, but when it comes to discussing things in public, the council still seems very reluctant.
The decision to seek out a £10m public works loan to fund the next phase of the Spinning Point project is a huge decision for an authority with an annual budget now dwarfed by that figure.
It’s an even bigger decision for a council which has yet to fully resolve how it ended up spending lots of its own money - we don’t know how much, but some figures put it in the millions - to rescue the £5m Empty Homes Scheme after the organisation running it on behalf of the council went bust.
The logic behind a public works loan makes sense. It’s cheaper for councils to borrow money for development, and it enables the council to facilitate the building of projects which otherwise wouldn’t get off the ground.
But it comes at a big risk. Interest rates could go up or the expected revenue from selling the homes and rental from the shops and Spa may not materialise as quickly as hoped. Such changes could cause serious problems at a council which is struggling to make ends meet as the result of budget cuts over the last nine years.
The council, however, can’t afford for the second phase of the Spinning Point development to not go ahead, because some of the money secured from the Local Growth Fund to build the bus station is conditional on phase 2 - now flats, shop and the spa - being delivered too. £1.1m of funding could be forfeited if that were to happen. The council describes this in a report presented in private to councillors as ‘the biggest single investment decision the council has ever undertaken.’
Yet it was a decision taken in private. No public discussion on the council taking on loans to fund a development has been permitted.
There is already considerable disquiet at the speed with which the council dealt with the planning applications for Spinning Point, and repeatedly interested parties have accused the council of ignoring them.
And now, the project changes again - with no consultation. And the biggest financial decision the council has taken was made with one third of councillors missing from the meeting, with five of Rawtenstall’s seven councillors missing too.
Rossendale Council needs to reassure people it can handle such large sums of money after the Empty Homes fiasco. It also needs to bring the public with it on such an important decision, which, if it goes wrong, we could be paying for decades to come.