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Questions raised over cost of Ladywell House to council

 
Created on 16/04/2019 @ 11:44
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Powys County Council has turned down a £1 million Welsh Government grant to refurbish Ladywell House in Newtown.

Powys County Council has told the Local Democracy Service as there were too many conditions attached to the £1 million to make it “financially viable”.

In January, much publicity was given to the awarding of the grant by Welsh Government minister Hannah Blythyn and PCC cabinet member for property, Phyl Davies (Conservative – Blaen Hafren), who said he was: “grateful for their support”.

Plaid Cymru group leader, Cllr Elwyn Vaghan, has been asking questions as to what happened to the grant and how PCC will fill the building.

He has also seen costs of the project following a Freedom of Information Request to PCC.

The FOI request shows that the cost of buying Ladywell House was £1.1 million. The cost of refurbishing Ladywell House is £3.8 million and that £1 million was coming from the Welsh Government to help the scheme.

Cllr Vaughan, said “The cost of the project is now, unbelievably £4.9 million. The cost of borrowing against capital is £60,000 per million.

“Therefore this will cost £300,000 year in revenue costs and the yearly rent will not not be enough to cover that. If Ladywell House is full the potential income is £400,000.

“This means PCC will need occupancy of 75 per-cent just to cover the annual costs. I have asked whether a structural report into the building was made before  it was bought.”

Cllr Vaughan, added: “I have also asked what is the strategy to fill the building once the building work is finished. If there is no confidence that it can be filled by PCC than it should be seriously considered selling it to the private sector so that a company or commercial developers do this work rather than the council.”

Cllr Phyl Davies said: “Unfortunately the grant offer letter included conditions that would have severely hampered the council’s plans. We had to reluctantly decline the offer and suggest the money is used for alternative regeneration work in the county,”

“The conditions restricted how the building could be used and that any income above a certain threshold would be lost to the county council – conditions that tie our hands and defeat the purpose of investing in the building.”

A spokesman for the Welsh Government, said “PCC has informed us that they had carried a review of their office accommodation strategy and no longer wished to pursue the Targeted Regeneration Investment (TRI) Programme funding.”

In recent weeks asbestos was found during the renovation work at Ladywell House. Work to remove the asbestos will need to be done outside of normal working hours.

The county council bought the building from the Welsh Government in 2017 as an investment opportunity to generate income from the building to support council services.

By Elga Heartn, Local Demcracy Reporter

 

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