Wednesday 24 July 2024
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New reservoir facilities in Nottinghamshire need extra £200,000 loan

Ashfield District Council will need to borrow £200,000 more than originally expected to fund new outdoor facilities at King’s Mill Reservoir.

A new exempt report shows costs for the major new hub have increased since original forecasts were published.

And the costs to the council are increasing amid recent surges in inflation and construction costs, which have affected numerous infrastructure projects over the past year.

The plans are part of the authority’s wider £62.6m Towns Fund projects and will see an 80-seat restaurant and outdoor watersports facility built at the popular site.

When the authority first put forward its business case for the project in 2020, it was expected to cost around £3.19m.

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However, costing assessments in March last year showed the project would likely cost about £4.03m before extra cash was provided to bring the budget up to £4.3m.

But now the new report, which was discussed behind closed doors at Thursday’s full council meeting (May 25), has revealed the project is now expected to cost £4.5m.

The exempt papers say many of the authority’s Towns Fund and Future High Streets Fund projects are suffering due to inflation and construction costs.

A new contractor has since been appointed to run the King’s Mill project, due to projected costs for the previous contract being “significantly higher” than originally expected.

However, the overall budget for the project remains £199,759 short and now the authority says it will need to borrow more money to cover the shortfall.

The exempt paper shows the council was initially due to borrowing slightly above £456,000 to fund the construction of the new restaurant and sailing club.

Following the  discussion on Thursday, this has been increased to £656,000 – a rise of £199,759.

Slightly more than £2.5m will be used from the Towns Fund pot to cover the project, with a further £192,000 in borrowing to support the site’s new car park.

A further £300,000 will be used from the ‘Green Ashfield’ Towns Fund budget to install a heating system and solar panels.

And the remainder of the budget will be supported through additional cash of £810,257 from the Towns Fund Construction Centre project.

In the report, the authority said: “The project budgets were developed in 2020 in preparation for the submission of the Towns Fund and Future High Street Funding bids.

“Since the funding bids were submitted and approved, inflation has risen at a significantly faster pace than was forecast by financial institutions, meaning the cost of achieving the outcomes … has become challenging.

“Alongside inflation, the detailed design phase of each scheme is presenting different challenges to each project budget, which cannot always be managed.

“It has been identified that… the revenue model will need to be varied to confirm an increase … in borrowing levels.”

The authority added: “The King’s Mill Reservoir site is seen as a key gateway to Ashfield from Mansfield and is central to expanding the area’s visitor economy.

“In line with increasing opportunities for residents to engage with sporting activity and increasing visitor numbers in this area, an intervention at this site was identified … to deliver on this strategy.

“The increased budget will allow us to deliver the project without any changes to the already-agreed outputs and ensure delivery of a flagship building.”

The council’s planning committee granted consent for the facility in February this year.

The watersports centre and restaurant were described as “must-go-to” tourism sites for people across the region.

The 80-seat restaurant, which will be based upstairs, will feature a kitchen, bar area, indoor and outdoor seating and toilets.

The sailing and watersports centre on the lower floor will include changing rooms, a boat yard, storage, a training and meeting room and other facilities for outdoor activities.

•  Plans for 250 homes near Nottinghamshire reservoir

Two secure yards for 55 small boats and 12 large boats will also be installed for activities like sailing, paddleboarding and kayaking.

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