Council backs £18.5m funding package for Scarborough's Brunswick Centre

At a meeting on Tuesday, North Yorkshire Council bosses acknowledged that millions of pounds of taxpayer-backed funding could ultimately be at risk.

The authority’s executive unanimously backed plans for £10.5 million of public grant funding and an £8m council loan to support the transformation of the vacant shopping centre into a cinema, leisure, retail and hospitality destination.

The scheme still requires a new planning application after a previous consent lapsed.

Deputy leader Cllr Mark Crane described the project as a major opportunity for the town: “This is a truly unique opportunity for Scarborough and will cause people to spend more money and time in the town year-round.”

Scarborough Group International’s (SGI) proposed development includes a six-screen cinema, family-focused indoor leisure attraction, food-and-drink outlets, and two major retail units.

Developers estimate the scheme could attract around 850,000 visits a year, generate more than £45 million of annual spending and support almost 600 jobs.

However, officers said those figures would be independently reviewed during the next stage of the project.

Despite broad support for redeveloping the long-vacant site, councillors raised concerns over public-sector exposure and whether the projected benefits would materialise.

“We all want the Brunswick redeveloped and we need the investment and jobs,” Cllr Rich Maw said.

However, he noted that councillors were being asked to support “a multimillion loan and grant for a scheme that doesn’t have planning permission” and questioned what would happen if the project failed.

“We’ve heard the promise of 850,000 visitors and £45 million of spending and that would be a fantastic result for Scarborough,” he said, before asking who had independently checked the economic forecasts.

Responding, corporate director Nic Harne said the figures would be revisited and subjected to third-party verification before later funding stages could proceed.

Questions were also raised about the level of public support involved.

Cllr Liz Colling told the meeting that while “all of Scarborough” wanted to see the site redeveloped, she remained concerned about the “proportion of funding coming from the public purse” and asked when the cinema operator and major retail tenant would be revealed.

An officer told members that public funding accounted for around 25 per cent of the overall scheme cost and confirmed that heads of terms with a cinema operator and a major retailer would need to be agreed before the further tranches of funding were released.

Cllr Tom Seston said he wanted the project to succeed but described it as “a bit of a gamble”, comparing it to the Alpamare water park.

The Alpine-themed leisure attraction opened in 2016 with the help of a £9 million loan, but after the developer went into administration in October 2023, North Yorkshire Council took possession of the site and wrote off most of the loan.

He asked what guarantees existed that other tenants would eventually fill the remaining space.

Cllr Crane said there was significant interest from a cinema operator, a major retailer and restaurant chains, although he said names could not yet be disclosed publicly.

Cllr Heather Phillips, executive member for corporate resources, suggested that the redevelopment could help tackle long-standing problems in Scarborough’s evening economy.

“Scarborough is not currently a fun, safe space in the evening; that’s how it feels,” she said.

She added that creating hundreds of jobs, particularly for younger residents entering the workforce, would represent a major benefit for the town.

Cllr Simon Myers, executive member for arts, culture, and housing, said public intervention was necessary because the market had been unable to redevelop the site on its own.

“The reason we have to get involved is that the market won’t fix it,” he said.

He described the vacant Brunswick Centre as “a drag on the local economy” and argued the redevelopment could play a key role in revitalising Scarborough town centre.

Cllr Peter Wilkinson said he had initially held “serious misgivings” about the level of financial risk involved, but believed additional safeguards had reduced some of those concerns.

Despite efforts to “de-risk” the scheme, councillors were reminded that there remained an element of risk.

Asked what would happen if the scheme failed, Cllr Crane replied: “Potentially up to £8 million would be at risk” depending on the stage of the development.

Under the approved structure, up to £1 million of the council’s initial contribution would be at risk if the project did not progress beyond the pre-construction stage.

Any further funding would only be released once a series of planning, legal, commercial and financial conditions had been satisfied.