Cannon Brewery: Warning issued over proposal to give £11m of public cash to housing developer

Proposals to give more than £11m of public money to a developer seeking to build hundreds of homes on the site of a disused Yorkshire brewery could be "significantly improved", a report has warned.

The Competition and Markets Authority has issued an advisory report to the South Yorkshire Mayoral Combined Authority (SYMCA) overseen by the region's mayor Oliver Coppard in regard to plans to provide a major subsidy to a proposed development at the former Cannon Brewery site in Sheffield's Neepsend area. The site has been empty since the brewery closed in 1999.

Developer Capital and Centric is seeking to build 550 properties on the site but has said it needs £11.6m of public funding to address a "viability gap" for the £143m redevelopment scheme which it would otherwise be facing a loss on.

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The Combined Authority has produced an assessment in support of its plans to provide the subsidy.

The Cannon Brewery site in Neepsend has been derelict for 25 years. Picture: Chris EtchellsThe Cannon Brewery site in Neepsend has been derelict for 25 years. Picture: Chris Etchells
The Cannon Brewery site in Neepsend has been derelict for 25 years. Picture: Chris Etchells

But the CMA's Subsidy Assessment Unit has now said that assessment contains a lack of detail in several areas and needs to be improved.

The mayor's office told The Yorkshire Post it would be considering the CMA's findings in detail in the near future to "determine how to proceed”.

The proposed development is due to be funded through the SYMCA Brownfield Housing Fund, which distributes funding at a regional level under an agreement between SYMCA and Homes England.

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The report said: “SYMCA stated that the proposed subsidy will contribute towards the acquisition, remediation of the site, demolition costs, pre-construction site investigations, transport and highway works, and professional fees.”

The Subsidy Assessment Unit said: “Overall, the assessment could be significantly improved and articulated more clearly by better referencing and leveraging the supporting evidence within the assessment itself, which was very brief. It might have been possible to address some of these issues if SYMCA had approached the SAU for pre-referral discussions before referring the subsidy, as encouraged in the SAU Guidance.”

The unit said more detail was needed about the decision on the size of the subsidy; what the commercial incentives to develop the site without it would be and the potential effects of the subsidy on competition and investment. It also said more information was needed about the benefits and “potential negative effects” of providing the grant.

As an advisory report, the findings do not constitute a recommendation on whether subsidy should or shouldn’t go ahead.

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The report notes that SYMCA had considered a loan as an alternative to the grant but “even at nil interest, it would not bridge the viability gap for the development of the site identified by the developer”.

The SYMCA assessment said the alternative would be the site remaining derelict. The CMA’s subsidy assessment unit said this part of the assessment had clearly explained how the grant could make a difference.

It said: “The assessment states that the developer will not, without the provision of the subsidy, be in a position financially to bring forward the development.

"This indicates that the change in economic behaviour which the subsidy is intended to bring about is the development of the Cannon Brewery site which otherwise would remain derelict.”

Capital and Centric was contacted for comment but had not responded by the time of publication.

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