Inflation could hit cash for Town Deal projects
- Credit: Charlie Ridler
Plans to regenerate a town centre could suffer a £1million blow due to rising inflation.
Colchester Borough Council was offered £19.2m from the government for its Town Deal programme last year, which includes regenerating the town centre and projects such as deploying a 5G network and new youth facilities.
But now the funding could be worth less because of the increasing rate of inflation, according to Liberal Democrat Group Leader Mark Cory.
Officers answering questions from the council’s Scrutiny Panel said inflationary costs had been taken into account.
Chairing the meeting, Mr 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% within this year, just a quick calculation sees us at £1.2m-£1.3m just through inflation on the entire budget.
“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.”
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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.