Council's £800,000 gamble pays off

The 6m revamp of Scarborough Spa was plunged into crisis when Yorkshire Forward had its funding drastically reduced and was given just 10 days to list where it could make 44m of savings.

With its funding lost and with a 800,000 black hole in the budget, Scarborough Council voted to put every last penny into the scheme to ensure it could carry on, with the aim of making the complex one of the country's top entertainment and conference venues.

Yesterday the gamble paid off when it was confirmed Yorkshire Forward is to hand back the 800,000 in the coming financial year.

Coun David Jeffels, a guiding light of Yorkshire tourism, said: "It's wonderful news, especially when Yorkshire Forward has been forced to cut back considerably on funding projects.

"Scarborough has had a fantastic relationship with Yorkshire Forward and this has helped the town take forward its ambitious vision to regenerate the whole of the coast by 2020.

"This additional investment in the Spa will make it one of the finest conference venues in Britain.

"As a result it will be good for the whole coast's economy. It will attract more conferences, benefiting hotels, restaurants and shops and create a number of new jobs.

"It's a wonderful lift for the town."

Head of Technical Services John Riby said: "In 2010 Yorkshire Forward informed the Council that they were reducing their funding allocation for the scheme by 800,000.

"Following this notification the borough council allocated an additional 210k of its own capital resources to fund part of the resulting budgetary shortfall and the budget was reduced to 5.95m.

"The reduced budget did not allow for any contingency therefore the council also agreed to earmark the council's capital contingency reserve to fund any scheme overspend.

"Officers have recently been notified that Yorkshire Forward are reinstating the 800k in their 2011/12 funding allocations."

The reinstatement of funding will bring the scheme budget back to the original approved level of 6.54m, he added.

The additional 210k committed from the council's capital resources will go back into the reserve fund.

The development is the latest twist in a scheme which has turned into a roller coaster ride.

Scarborough's dream of upgrading the Spa to tempt back the big political conferences was originally priced at 10m.

But an earlier bid for 4m from another grant-making body failed – cutting the project from 10m to 6m at a stroke.

Yorkshire Forward agreed to stump up 4m for the scheme on top of the 2m already being put up by Scarborough Council, and work started on the 130-year-old building last April. It included major changes to the Grand Hall, Long Bar, toilets and office space, and surrounding areas.

After Yorkshire Forward cancelled the payments of 800,000, the town hall shaved 85,000 off the scheme. But balancing the books still required using the capital contingency reserve of 504,000, which then could not be used for anything else, and underwriting the remaining 211,000 shortfall from cash set aside at the end of the year.

Councillors had been divided when they voted to approve the move last July, But Tory council leader Tom Fox warned the project had already passed the point of no return. All the floorboards in the Spa Grand Hall were up, he said, and it was essential the town hall be able to carry on signing cheques.

The Spa is scheduled to reopen in May when the curtain goes up on the Bolshoi Ballet on Saturday May 7.