Keeping Spa dream alive costly

The regeneration agency has slashed 800,000 from the funding of the flagship project this year. The hope is that the money will go back into the pot for the next financial year so the figures will balance out. But it depends on the financial picture.

Scarborough councillors will be warned on Monday that they will need to agree contingency plans now to ensure it can carry on writing cheques to finish the work, due to continue at the Spa until May 2011.

Head of Legal Services Ian Anderson said: "The reduction by Yorkshire Forward in the funding for the project of 800,000 in 2010/11 places the council at risk and steps need to be taken to address that."

He argues 85,000 can be saved by trimming the scheme to remove none important items, some of which are no longer needed, and general economies.

Balancing the books would still require using the capital contingency reserve of 504,000, which then cannot be used for anything else, and underwriting the remaining 211,000 shortfall from cash set aside at the end of the year.

He added: "It will have significant implications for the council's capital programme, particularly in 2010/11. All available capital resources, including the capital contingency reserve, will be committed to the Spa project.

"No new schemes will be able to progress until the scheme is completed, additional capital receipts are generated, or Yorkshire Forward provide assurance that the 800,000 will be included in its 2011/12 funding allocations."