Pydar area of Truro will be the council’s own bankruptcy

The comment was made in reference to the Essex authority declaring itself bankrupt during a discussion about whether Cornwall’s local authority spends an extra £10m to ensure the Pydar development goes ahead.

A recommendation was made to a full Cornwall Council meeting on Tuesday, April 16, that the council’s total capital programme be uplifted by £14.804m to include the £10m to ensure the stalled Pydar scheme – which includes housing, student accommodation and a hotel – continues.

It also included money for other projects including just under £1m of funding for the River Camel Phosphate Mitigation Strategy project with the main aim of improving water quality in the river.

Hive Court Yard view (Image: LDR)

However, an amendment was put forward to remove Pydar from the recommendation on the grounds that a financially struggling Cornwall Council can’t afford the requested £10m.

Cllr David Harris, the Conservative portfolio holder for resources, highlighted that progress on Pydar had been affected by the pandemic, high interest rates, very large increases in building costs and additional requirements on buildings over 18m high. He admitted that there had been a “cock-up” when the finances for the scheme were discussed by the council’s Tory cabinet last month.

“Since this went to Cabinet I’ve delved further into the numbers and have satisfied myself that this scheme works. The possible charge to our revenue accounts on the basis that this money is funded by borrowing was mistakenly reported to Cabinet as £1.3m. In fact, it’s a maximum of £600,000. This was a cock-up, not a conspiracy.”

He denied the £10m was money for consultants, as he’d heard others suggest, but would pay for further demolition on the site, surveys and infrastructure works including £2m for an electric connection.

Cllr Louis Gardner, the council’s portfolio holder for economy, added it was vital Pydar went ahead for the local economy, not just for Truro but the whole of Cornwall.

Labour’s Jayne Kirkham stated: “The cost of borrowing now seems to be cut by half. I know Cllr Harris said that original figure was a ‘cock-up’ but it would be good to know how such a massive mistake was made. There is concern about management of the project if mistakes like this are being made.”

She said that there were also concerns that the need for the £10m came straight after the council had agreed its budget.

Cllr Harris said the officer responsible was “very contrite” over the £1.3m borrowing error. He added that it took officers until last month for a report on Pydar where they were “comfortable” with the figures, which meant it missed the budget agreement.

Conservative councillor John Conway proposed an amendment that the £10m for Pydar was removed from the capital budget uplift.

“Pydar is something I believe we cannot afford at present. To approve £10m that wasn’t in the budget we approved two months ago seems incredible. We have a balanced budget for 2024/25 which includes £14m coming from reserves. By the time we get to three years further we’ve already got £74m a year coming out of reserves. That £74m is money we haven’t got. We are likely to be going the way of Birmingham if we go along this route.”

He believed Pydar should be reconsidered in around six months time when interest rates are likely to drop and the development becomes more cost effective. “There’s half a billion about to be spent in Truro with Pydar and Langarth together with a square root of zero for the rest of Cornwall.”

Cllr Steve Arthur seconded his amendment, adding: “The track record of this council isn’t very good with schemes. We’ve knocked down a perfectly good site, with a car park which was functioning for Truro, before we knew where we were. It’s cost £19m to clear the site already.”

Cllr Adam Paynter said: “It’s quite difficult for some of us to stomach this when we live in further flung 50 miles away places from Truro that get overlooked.”

Independent councillor Tim Dwelly added: “There was a mistake and it should have been dealt with by the time of the budget, but we have to look at the reality here – in my opinion, we haven’t got the luxury here of avoiding delivering 100 affordable homes, 100 rented homes for people working in Truro, 340 student units, 60 units for older people as well as an innovation centre and the presence of the university.”

However, fellow Independent Andrew Mitchell totally disagreed, describing a “horrifying” project which had “run away from our officers. Cllr Gardner says it’s an attractive and vibrant area, well it certainly isn’t to the open market because we can’t find a financial backer or a developer to buy it from us”.

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He added: “Cornwall Council can’t afford this – I believe that if we do this, this will be our own Thurrock Council bankruptcy project. I’m horrified to see this administration bring this forward only after a week ago saying that the rest of Cornwall will have 2,000 local community assets ripped from beneath their feet and yet we want to stick £10m into the Pydar scheme.”

Labour’s Laurie Magowan was one of several councillors who also spoke of their concerns about the £10m uplift for Pydar, stating that there was no guarantee that further capital requests for the scheme wouldn’t be made in the future and aired caution that Cornwall Council could be liable for all costs if a private funding partner for the development isn’t found.

The council’s portfolio holder for housing, Cllr Olly Monk, added: “This investment will allow us to deliver the first phase of this project which will then allow the delivery of a hotel, student accommodation and over 300 homes, many of which will be within the reach of local people, with affordable and open market rents as well.

"When it’s built this will provide housing for over 1,000 people. If each of those people spends £100 a week, it adds up to about £5.2m a year being spent in Truro at a time when many of our towns are facing viability issues to keep shops open. This will be a shot in the arm for the Truro economy and a shot in the arm for Cornwall.”

Cllr Conway’s amendment to throw out the £10m for Pydar was lost by 51 votes against, 26 for and six abstentions. The original recommendation to uplift the capital programme by £14.804m, including the Pydar spend, was approved by 52 votes for, 19 against and with seven abstentions.