Bournemouth, Christchurch and Poole (BCP) Council is to consider closing down its regeneration company as it is no longer “financially sustainable”.

BCP estimates that the cost of closing the company will be between £1.24m and £2.23m.        Photo: Shutterstock

In May 2021, BCP Council set up the urban regeneration company FuturePlaces to increase its capacity to manage and deliver development projects in Bournemouth. Since its establishment, the authority set up an £8m loan facility for FuturePlaces, of which the company has drawn down £4.75m for delivery of work.

However, a report detailing the next steps for FuturePlaces has recommended that the council shut down the company and bring its development and investment activities in-house.

The report outlined that reasons for this include the council’s financial position, which since 2021 has become “increasingly challenging”, with the authority requesting a capitalisation direction from the government to fund the transformation programme.

In addition, BCP has reported a £44m funding gap in its medium-term financial plan (MTFP) for 2024/25, which includes a £30m structural deficit due to the use of earmarked reserves to fund the 2023/24 budget.

The report added that an independent governance review undertaken by the Department for Levelling Up, Housing and Communities (DLUHC) highlighted concerns about the transparency of the governance of FuturePlaces as well as the priority and timescales of its projects. Hence, closing down the company will deliver on the recommendations of the government review.

“Maintaining the current development functions as delivered by FuturePlaces, with the same funding model, is not a financially sustainable option, and does not respond to the changing market and economic conditions or the recommendations of the DLUHC governance review,” the report said.

BCP anticipates that the cost of orderly closure of the company will be between £1.24m and £2.23m.

This comes as DLUHC issued BCP with a non-statutory Best Value Notice due to the authority’s “unrealistic” MTFP, which is based on an “overly ambitious transformation programme”.

Dispose of assets

According to the report, if the council agrees to shut down the company, FuturePlaces’ staff would be transferred to BCP in November, with the formal company closure expected in quarter one of 2024.

Also, under the closure recommendation, BCP would only continue with nine of FuturePlaces’ projects, with three being put under review and four stopped.

The authority would also need to sell the Poole Civic Campus and the Christchurch Council Offices, which are assets included in FuturePlaces’ original business plan, the report explained.

“This will enable greater focus and capacity for delivering homes and jobs on sites owned, or controlled, by the council and the new team to build on the value of the work completed and initiated by the FuturePlaces team,” the report continued.

—————

FREE weekly newsletters
Subscribe to Room151 Newsletters

Follow us on LinkedIn
Follow us here 

Monthly Online Treasury Briefing 
Sign up here with a .gov.uk email address

Room151 Webinars
Visit the Room151 channel