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On 22 July 2025 Cabinet:-
(i) Noted the Outline Business Case for the Birmingham Smithfield scheme (attached at Appendix 1 to the report) with a total Enterprise Zone grant request of £172.8 million, approved by the Enterprise Zone Partnership Board on 11 June 2025;
(ii) In its role as Accountable Body for the Enterprise Zone, approved the use of Enterprise Zone funding of £172.8 million to Birmingham City Council to be funded from Prudential Borrowing, subject to approval of Full Business Cases and associated Programme wide Full Business Cases (FBCs);
(iii) Noted that the capitalised cost of borrowing (deferred interest) over the lifespan of the EZ amounting to £31.8 million will also (along with the £172.8m mentioned in decision point (ii) above be met by the uplift in Business Rates Income (circa £438 million) anticipated to be generated from the project over the life of the Enterprise Zone programme to 2045/46 as outlined in Section 8 to the report . The capitalisation will have a cash flow impact on the Council as it will need to pay this amount out before it receives the money from the Business Rates uplift;
(iv) Approved EZ grant funding of £0.289 million to develop the Full Business Case for Birmingham Smithfield Phase 1 and a programme wide Full Business Case for the overall scheme. This funding forms part of the overall EZ allocated funding request;
(v) Approved the allocation of EZ funding of up to £1.98 million to fund EZ Programme related costs over the life of the project to be met from prudential borrowing;
(vi) Noted that whilst there are currently sufficient places in local primary and secondary schools the delivery of over 3,000 new homes will lead to the requirement of additional education provision. As set out at paragraph 8.18, the additional requirements of Smithfield is likely to lead to the need for over 1,000 primary/secondary/early years/SEND places at an estimated cost in the region of £29.58m. At this stage, if the scheme is to progress the Council, as a worst case position, will need to underwrite the costs of the Education provision. In order to minimise the impact for the Council on capital resources, officers will ensure that the impact on the Council underwrite is minimised by exploring all routes for external funding. The programme FBC and viability assessment will need to more clearly define the required provision and how the cost will be met. Education officers will continue to work collaboratively with the Project Team to plan effectively and ensure that school places are created in a timely manner as demand materialises to ensure that the Council remains in a position to meet it statutory duties regarding school provision;
(vii) Approved the Council to underwrite the estimated cost of £29.58m to fund the cost of meeting the additional Education provision arising from the Smithfield development if alternative funding is not identified;
(viii) Noted compliance with the subsidy control rules in the Subsidy Control Act 2022 as detailed in Para 8.25 to the report;
(ix) Noted that the JVA between the Council and Lendlease Smithfield Development LLP is being renegotiated and will be concluded before the first Full Business Case is submitted. Cabinet approval will be sought for the renegotiated JVA;
(x) Noted that the 50/50 joint venture between Lendlease and The Crown Estate, will be subject to conditions precedent, including Council consent, as may be required and/or given under the JVA; and
(xi) Authorised the Director of Law & Governance/Monitoring Officer to negotiate, execute, seal and complete all necessary documents in connection with the above decisions.
THE DEADLINE FOR CALL IN IS 1600 HOURS ON MONDAY 28 JULY 2025.
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