‘Damning’ feedback reveals why Cotswolds town bid for £16.7m Levelling Up fund was rejected

Strategic Fit:

For the elements of the bid that consultation had been conducted for, it was wide ranging, well evidenced, had shaped the bid, and negative responses had been noted. However, there was no direct consultation on Lansdown House, the Brunel Mall car park, or the bus stop improvements.

There was also no evidence of consultation, beyond letters of support, for the purchase of Cheapside or the incubator offices. Description of the barriers/challenges in Stroud and the need for intervention due to market failure were strong, but the origins of an output describing an increase in training opportunities for South Gloucestershire and Stroud College students, through a partnership with the incubator space, were not explained. The options analysis was implicit rather than explicit.

Economic Case:

Strong evidence was provided to demonstrate the scale of local problems in terms of need for regeneration and transport connectivity. However, the data showing socio-economic issues could be strengthened. The applicant used the legatum index, rather than the Index of Multiple Deprivation and, even then, the ranking on that index did not present a place that was deprived and in need of urgent intervention.

The applicant provided strong evidence on how interventions would address problems outlined within the application. The assumptions were reasonable and robust and, in specific areas, conservative estimates were taken. The Theory of Change from context to impacts was also clearly explained.

There were accurate and detailed estimations of the costs and benefits, in line with Green Book / AMAT guidance. However, more detail would have been welcomed on how these benefits were appraised, specifically on the visitor numbers, VURT and AMAT.

Deliverability:

It was clear that substantial work had already been undertaken to progress a number of strong projects, however overall some detail was lacking. that would have been strong candidates for funding.

The application was for a package of three projects, which in reality comprises 12 separate projects with five different delivery partners.

Describing how the portfolio and its complexities would be managed coherently and consistently was very important, and the application failed to provide the necessary confidence. The approaches to procurement, project management, delivery, and risk management were all presented at a project level.

The quality of these submissions across the projects was variable. A persuasive description as to how the programme would be managed and governed, with consistent and coherent approaches to project management, would have built more confidence.

The programme was overly reliant on match funding from Dransfield; the owner/developer of an existing shopping centre. It was noted how little the other partners were prepared to invest. Dransfield wishes to develop its shopping centre by converting space to provide incubator offices and retail units coupled with improvements to communal areas and roof.

The development appraisal described the viability gap to justify substantial Levelling Up Fund (LUF) investment, but it was not clear why the appraisal tested only the income generated by the new accommodation, rather than the centre as a whole, given that a significant proportion of the costs were investment into the communal areas.

It would also have been helpful to have the council’s view as to whether the appraisal was realistic, given the council was positioning itself as the conduit for grant between the department and the developer.

The developer indicated that match funding included £166k as land value. This was also included in the appraisal, but the application itself stated that no land was to be considered as match funding. These statements were contradictory.

There was also no independent valuation of the land. If the value of the land was deemed ineligible, then this reduced the match funding to 9.8%, less than the minimum suggested. Furthermore, should Dransfield choose not to proceed, or progress was delayed, then there would be no match funding available to drawn down LUF for the other projects.

No draft Grant Funding Agreement/heads of terms with Dransfield were supplied, so there was uncertainty about their commitment. The applicant was committed to buying land at Cheapside. It was understood that contracts were to be exchanged in August, with a commitment to complete by December, but the applicant was seeking 100% grant funding towards the costs of purchasing this.

It was not clear what the intentions were for this site, whether there was a development appraisal that explained the funding gap, and why the council had committed to purchasing this before the outcome of this bid was known. The only conclusion was that the council would want to buy this site regardless of the application’s outcome.

There was also no explanation as to why the costs included in the workbook were £250k higher than the purchase price in the heads of terms. £25k of pre-bid costs were not eligible.

Apart from the lack of consistency in project management approaches, there was little concern about the proposals for public realm improvements, enhancements to the three cultural venues, and the highways/public transport works.

The monitoring and evaluation (M&E) plan addressed objectives/research questions, outputs/outcomes/impacts to be monitored, data requirements, and governance to varying degrees. However, the bid lacked information regarding the evaluation approach or details of resourcing/budget, which were considered key requirements.