Taxpayers £1m loss warning over shopping centre

Taxpayers could lose up to £1m if plans to redevelop a former shopping centre in Scarborough do not progress beyond the initial development stage, officials have warned.

An £18.5m public sector funding package to help deliver the regeneration of the Brunswick Centre will be considered by North Yorkshire Council's executive on Tuesday.

It includes an £8m loan from North Yorkshire Council, alongside £7m from the York and North Yorkshire Combined Authority and £3.5m from the government's Pride in Place programme.

However, council officials said that up to £1m of the authority's funding would not be recoverable if the scheme did not move forward to construction.

An initial £3m tranche of funding has been earmarked for design work, internal demolition, planning preparations and further testing of the project's financial viability, before a final decision is taken on whether to proceed with construction.

The report states: "Up to £1m of the council's funding would be irrecoverable if the scheme does not proceed beyond the pre-construction phase."

Council officers said safeguards were being built into the process, including phased funding releases, independent viability assessments and a formal review before any decision was made to move into the construction stage.

The report also notes the Brunswick redevelopment is "not viable without public sector intervention" and requires both grant funding and public sector loans to proceed.

The proposed development by Scarborough Group International (SGI) would include a six-screen cinema, family leisure facilities, restaurants, cafes and retail units.

A spokesperson for SGI declined to comment until the funding decisions have been considered by the various authorities.

Council projections suggest the scheme could attract around 850,000 visits a year, generate £45.2m in annual spending and support 578 jobs.

However, the town's Reform UK mayor Thomas Murray has questioned whether enough safeguards were in place to protect public money.

He told the Local Democracy Reporting Service he supported the ambition behind the project but expressed concern about the level of financial risk involved.

Murray drew comparisons with the Alpamare water park, whose developer was loaned £9m by the former Scarborough Borough Council but went into administration still owing £7.9m of public money.

"Scarborough needs investment, not another expensive lesson in how to lose taxpayers' money," he said.

Councillors will consider the funding package on 27 October.

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