Council suggest options to avoid £800,000 annual taxpayer bill for next 20 years to close £8m funding gap

Councillors are being asked to approve this to help close an £8m gap. This £8m budget black hole came about due to an overspend in a regeneration scheme that covers much of Birkenhead town centre. The scheme has come under heavy fire in recent months after it was revealed by the LDRS the scheme was £12m over budget and massively behind schedule.

£4m was already moved by officers from plans for a new Birkenhead Market project in March 2024 to cover increasing costs but this failed to be properly approved or reported to councillors or the public. Councillors in March this year also approved an extra £750,000 for the scheme so the local authority has to find £8m to cover the rest.

The scheme for works on Grange Road, Europa Boulevard, Conway Street, and Charing Cross are currently estimated to be £24m. However officers warned councillors on September 2 they had no way to know the final costs because of contract issues.

A number of different options have been presented to councillors that would reduce the borrowing costs ahead of a policy and resources committee meeting on September 10. If the council borrows the full £8m, it would cost around £760,000 a year to pay back over the next 20 years which means less money for day-to-day council services.

To cut this down to £5.3m, councillors are being asked to approve £1.25m of Liverpool City Region Combined Authority grant money towards the scheme, using £1m of council borrowing already approved seven years ago but never used, and taking £250,000 leftover from The Hythe as well as £186,000 previously used to develop Birkenhead regeneration plans.

A report before councillors said discussions were ongoing about using existing grant funding from elsewhere but other committees would need to approve this and the government would have to approve any change over £5m for some grants. A regeneration committee meeting is due to be held on September 15.

On September 2, councillors raised concerns about whether a risk assessment was done before the scheme started, the culture within the council and why a dispute between departments was not reported, and the management of regeneration funds.

Particular concerns were raised about a breach of the council’s contract rules with Liberal Democrat Cllr Stuart Kelly saying the situation “honestly smells.” Top bosses at the council said they would be working to address the issues raised and promised a culture change in the council to prevent the situation from ever happening again.

An action plan is expected to be presented later this year. Neighbourhoods director Jason Gooding, who has been covering for chief executive Paul Satoor since June, said the council needed to ask “why do we not have a culture in which officers are confidently escalating these concerns?”

He said he couldn’t offer assurances the situation was a one-off event and the council would be looking to commission an independent inquiry, something he said political parties supported. Mr Gooding said the council needed to build confidence and the external review would be a first step to provide reassurance the council understood its problems and fix them.

“I and my colleagues want to commit to rebuilding trust,” he added.