Brunswick redevelopment package in Scarborough exposes council to up to £1m risk

An £18.5m public sector funding package to help deliver a major town centre regeneration scheme centred on a new multiplex cinema, leisure attractions, restaurants and retail units is being considered by North Yorkshire Council’s executive.

The proposed package includes an £8m loan from North Yorkshire Council, alongside £7m from the York and North Yorkshire Combined Authority and £3.5m from the Pride in Place programme.

However, council papers warn that while the £8m contribution is intended to be repaid, up to £1m of the authority’s funding would become irrecoverable if the scheme does not proceed beyond the pre-construction phase.

An initial £3m tranche of funding would be used for design work, internal demolition, planning preparations and further testing of the project’s financial viability before a final decision is taken on whether to proceed with construction.

The report states: “Up to £1m of the council’s funding would be irrecoverable if the scheme does not proceed beyond the pre-construction phase.”

Council officers said safeguards are being built into the process, including phased funding releases, independent viability assessments and a formal gateway review before any decision is made to move into the construction stage.

The report also notes that the Brunswick redevelopment is “not viable without public sector intervention” and requires both grant funding and public sector loans to proceed.

The proposed development, being promoted by Scarborough Group International (SGI) through its special purpose vehicle Scarborough Brunswick Limited, would include a six-screen cinema, family leisure facilities, restaurants, cafes and retail units.

A spokesperson for SGI declined to comment until the funding decisions have been considered by the various authorities.

Council projections suggest the scheme could attract around 850,000 visits a year, generate £45.2m in annual spending and support 578 jobs.

However, Scarborough Town Mayor Cllr Thomas Joseph Murray questioned whether enough safeguards were in place to protect public money.

He said he supported the ambition behind the project but expressed concern about the level of financial risk involved.

“Scarborough needs investment, not another expensive lesson in how to lose taxpayers’ money,” he said.

The Reform mayor drew comparisons with the former Alpamare water park and called for proof that the scheme was commercially viable and that the council’s £8m loan could ultimately be repaid.

Councillors will consider the funding package when North Yorkshire Council’s executive meets on October 27.