Future of Scarborough's 'Station Gateway' development at risk after council misses out on £20m funding

Scarborough Council’s application for £20m of funding from the second round of the Levelling Up Fund has been unsuccessful with council leader, Cllr Steve Siddons, describing the decision as “bitterly disappointing”.

The second funding application was signed off by the authority’s cabinet in July and focused on supporting the delivery of its Station Gateway and Fablab+ initiatives which have already been funded in part through the Towns Fund grants.

In January 2022, the council identified that the two projects would require a Levelling Up Fund grant, in addition to the Towns Fund grant “for the projects to be delivered to their full potential”.

If the application had been fully approved, it would have meant £12.4m of funding towards the redevelopment of Pavilion House as a public sector hub and £3.8m towards the redevelopment of the former Comet corner building, both of which were purchased by the council in 2021.

A further £3.7m would have been spent on the redevelopment of Scarborough Railway station bringing disused parts of the historic building back into use as a station hotel.

Councillor Steve Siddons, leader of Scarborough Council, said: “This is bitterly disappointing news and a massive surprise given Scarborough’s classification as a priority one area by the government’s own assessment of need.

“Our borough has 85 per cent of the most deprived population in the whole of North Yorkshire but wealthy Richmondshire, the prime minister’s constituency, gets £19 million.

“This shows the contempt this failing government displays for the people of Scarborough and Whitby.”

In 2021 Scarborough Council purchased Pavilion House, often regarded as Scarborough’s ugliest building, for a “substantial premium” to secure the site as part of its station ‘gateway’ plans.

It was later revealed that the authority paid £2.7m for the property which was funded by borrowing.

It also purchased the former Comet building on Westwood with plans to demolish it and replaced it with high-quality office space and redevelop it as FabLab+ and commercial offices

At the time of the purchase, Cllr Paul Riley, vice-chair of the places and futures overview and scrutiny committee, warned that there were significant financial risks involved.

"It’s not nailed on that we will get all the levelling up grant funding that we need to complete the redevelopment to meet our objectives. We are aware that in a worst-case scenario, we could get nothing and resort to further borrowing," he said.

However, the council leader said the authority’s bid met all the criteria: “It is a missed opportunity and makes me wonder whether the whole point of the Levelling Up Fund is understood by ministers.

“We submitted a high-quality bid and met all the funding criteria including the required match-funding and evidence of our ability to deliver the schemes.

“The money would have allowed us to progress the transformative station gateway and FabLab+ projects in the centre of Scarborough to their full potential.”

According to a report prepared for the cabinet in July, North Yorkshire County Council supported the authority’s funding bid.

However, general consent approved by NYCC in May 2022 approved capital contracts relating to the Station Gateway and Fablab+ projects, but “only to the extent that the works are covered by the Towns Fund grant allocations”.

While £2.1bn of new Levelling Up funding is to be distributed across the country, the South East of England received almost twice as much funding as Yorkshire.

The only regeneration project in North Yorkshire to receive funding was a project to transform Catterick Garrison town centre in the prime minister’s constituency of Richmond which received £19m.