Council moves to plug £14million Sleaford enterprise park budget gap

It comes as opposition members called for more scrutiny after the authority approved plans to spend £6.5 million of its reserves on the first phase of the proposals.

A meeting of the full council on Thursday saw members vote 28-7 in favour of the spend, which will replace an original plan to borrow the money.

Bosses believe the move will save £1.1 million annual costs due to market volatility and the increased cost of borrowing, while going ahead now would generate a “small income”.

However, the meeting also showed that the overall cost has spiked from £56-£70 million – an increase of 25% – after running into issues around construction costs – linked to issues including COVID lockdowns, international supply issues and the war in Ukraine – along with work to tackle flooding issues which have required modification of the drainage scheme and the need to raise plot levels.

Opposition councillors called for more scrutiny on Thursday, believing the decision had been put to council too quickly and had not properly considered the future impacts of the ongoing cost of Living crisis, along Brexit and those above.

There were concerns the initial phase would not generate a predicted £317,000 income and that companies had not yet expressed an interest.

In a statement on Monday, Lincolnshire Independent Coun Marianne Overton accused costs of “spiralling”.

“Such a significant spend needed careful and inclusive discussion and consideration to ensure council funds are being spent wisely,” she said.

An amendment to the proposals to send the paper for scrutiny was lost 22 to eight.

The funding would come from unspent New Homes Bonus, other reserves plus part of the Heart of Sleaford fund, but councillors voted by 23 in favour to seven against.

Council leader Coun Richard Wright said following the meeting that the authority was taking “bold and decisive action” to ensure Sleaford Moor Enterprise Park was “brought forward in a viable and financially responsible way”.

He said there was “significant interest” in the site from potential tenants and said that they were using existing council reserves that cannot be otherwise spent now or in the immediate future.

“By not taking any such action and instead delaying the first phase of Sleaford Moor Enterprise Park to see if borrowing costs and general market volatility were to improve, we expect we would have seen costs increase further,” he said.

“In leading by example and investing these monies in this way rather than continuing to keep them in our reserves, we are ensuring we can and will deliver on the aspirations of Sleaford Moor Enterprise Park and the economic growth and jobs it will provide in the immediate future, for our residents, businesses and our district’s economy.”

A spokesperson for NKDC said the authority was in the process of reviewing funding options and planning to produce a revised business case around the extra £14 million in the near future.

“While some of the reserves being used had been earmarked for the Heart of Sleaford project, the council is exploring options for a new cinema for the town and alternative funding arrangements as a means of attracting new investment for it.”