Issue - meetings

This report requests a capital addition to deliver the Healthy Living Centre in the Pentagon Centre, a cost which will be reimbursed by the NHS. The report also seeks approval for virements for reporting clarity purposes.

Background:

This report requested a capital addition to deliver the Healthy Living Centre (HLC) in the Pentagon Centre, a cost which would be reimbursed by the NHS. The report also sought approval for virements for reporting clarity purposes.

The report advised that HLC designs had progressed and that following further design work and subsequent cost inflation, further funding was required to enable the tender exercise to be undertaken to build out the HLC.

The report had previously been considered by the Cabinet on 16 January 2024. The recommendations to the Cabinet were set out in section 6 of the report.

The Portfolio Holder for Housing and Property, Councillor Khan, supported by the Deputy Leader of the Council, Councillor Murray, proposed the recommendations set out in the report.

Decisions:

a)    The Council agreed an addition to the Capital Programme, of £2,752,000 for the delivery of the Healthy Living Centre in the Pentagon Centre, noting this figure would be reimbursed by the NHS and is subject to NHS final approvals and S106 contributions.

b)    The Council agreed the following virements from the existing Pentagon Centre future works budget, to deliver the diversification of the first floor of the Pentagon Centre:

A.     £1,245,900 to deliver the Healthy Living Centre

B.     £1,811,366 to deliver the Innovation Hub

Background:

This report provided options being considered for the redevelopment of the former Debenhams building and also requested capital additions to deliver the Healthy Living Centre (HLC) in the Pentagon Centre, a cost which would be reimbursed by the NHS. The report also sought approval for virements for reporting clarity purposes.

In relation to the former Debenhams building, the report explained that the market conditions had changed and officers were therefore looking to review alternative delivery options such as potential tenant uses including but not limited to; Private Rented Sector (PRS), key worker accommodation, temporary accommodation, retirement living and affordable housing.

In relation to the HLC, the designs had progressed and following further design work and subsequent cost inflation, further funding was required to enable the tender exercise to be undertaken to build out the HLC. The funding would be reimbursed by the NHS subject to their final approvals and S106 contributions.

Lastly, the approval of the virements being sought was to assist with reporting clarity.

Reasons:

Officers will be able to explore alternative potential options which could result in repayment of the capital borrowing via future revenue income, as opposed to capital receipts. The final business case for the redevelopment of Debenhams will require further Cabinet approval. 

Additional funding is required, following the design progression and subsequent cost inflation to build out the Healthy Living Centre in the Pentagon Centre. The additional funding will be reimbursed by the NHS. 

Lastly, the virements will not impact project delivery, with no change to the funding source/project budgets but will improve reporting clarification. The virements are in line with the decision approved by Council, that a proportion of the underspend on the purchase of the Pentagon Shopping Centre would be utilised for future capital works at the Pentagon Centre. (Minute no.713D, 20 February 2020).