Agenda item

To enable the Cabinet to consider the recommendation made to it by the Resources and Services Overview & Scrutiny Committee in relation to the delivery of the Sunspot Commercial Space in Jaywick Sands.

RESOLVED that the recommendation made by the Resources and Services Overview & Scrutiny Committee be noted and that the response of the Portfolio Holder for Economic Growth, Regeneration and Tourism thereto be endorsed.

Cabinet was informed that, in accordance with the decision of Council on 11 July 2023 (minute 37 referred), the Resources and Services Overview and Scrutiny Committee (“the Committee”) had undertaken a post decision scrutiny of the Sunspot commercial workspace in Brooklands, Jaywick Sands on 19 September 2023 (minute 29 referred). As part of its enquiry, and immediately prior to the Committee’s meeting, its Members had been provided with a tour of the new premises and the adjacent community garden. During the tour the Committee’s Members had met with the intended operator of the café on site.

The Portfolio Holder for Economic Growth, Regeneration and Tourism had spoke to the Committee and had expressed his gratitude for the support received and had provided an update on the Sunspot project, highlighting its positive progress. He had mentioned the availability of 24 affordable commercial units, with 14 businesses already signed up, surpassing the initial expectation set out in its business plan. The Operations and Facilities Manager, though absent for this meeting due to illness, had been employed to support tenants, and the Portfolio Holder outlined the diverse spaces within the building, including a covered market, committee room, and a cafe with an experienced operator.

The Portfolio Holder had also emphasized the potential for skills development and job opportunities within the project, citing the café's intention to take on apprentices. He had acknowledged the past challenges, including cost overruns and delays, attributing them to capital cost inflation and external factors such as the COVID-19 pandemic. Despite the challenges, he had likened the project's journey to overcoming a "perfect storm" and he had acknowledged the collective effort to reach the current stage. He had also acknowledged Essex County Council's funding support.

The Corporate Director for Place and Economy (Lee Heley) had then addressed concerns related to costs and he had provided a detailed timeline of the Sunspot project. The feasibility study had commenced in January 2020, and the application for further funding to the Local Enterprise Partnership had been submitted in September 2020. The initial estimate had been for 13 units for £1.97 million. Changes, including an increase to 24 units and an additional £300,000, had been made after advisors had reviewed the scope of the project in February 2021.

Committee Members had heard that tenders had been sought in December 2021 for a £2.1 million project. Cost consultants had estimated a potential increase to £2.7 million, but the lowest tender had come in at £3.9 million. Despite challenges, including cost overruns and delays, the decision had been made to continue, securing investment from partners, including Essex County Council. The construction contract had been awarded in April 2022.

The Corporate Director (Place and Economy) had also highlighted the unique challenges faced, including unexpected ground conditions and the need for additional funding, leading to a total cost increase of £760,000. Refinancing had been necessary, involving discussions with partners around the refinance process. The speaker emphasized the importance of closely monitoring costs, refining project scopes, and considering potential challenges for future projects.

It was reported to the Committee that the cost increases in the project were due to capital costs going up globally due to COVID and the war in Ukraine.

The Committee had resolved to recommend to Cabinet:-

“a)   that the positive news about occupancy rates for the Sunspot Centre, Jaywick Sands and the intentions around the on-site market be noted; and

b)    that the capacity and expertise of the Council in costing and programme managing major capital schemes of the Council be strengthened to avoid or minimise unforeseen “mission creep” in schemes and unrealistic cost assessments being presented as part of approval mechanisms (that then needing to be repeated when true market costings are subsequently identified).

The Committee had further resolved:-

c)    that delivery against the business plan compared with the experience in the first six months operation of the Sunspot Centre, Jaywick Sands be confirmed in the Committee’s Work Programme for April 2024.”

Cabinet had before it the following comment submitted by the Portfolio Holder for Economic Growth, Regeneration and Tourism:-

“The Sunspot is a great success for Jaywick, for the Tendring District and the Council. The building is already occupied with 15 of the 24 business units with a tenant in place. Another four units will be occupied in January 2024.  That will leave 5 units vacant and just under 80 percent occupancy.  Officers are going to start advertising one of the empty units as a ‘rent a desk space’ in the new year. The café is busy, and the market is popular.

While capital costs rose across the World during the period the Council completed the Sunspot, the Council worked closely with partners including Essex County Council to ensure the project had sufficient funds to complete.

The success of the project has received positive reviews in the local and national press, and has been used as an exemplar of good practice as far afield as Stockton.

As with any major project, the Council has learnt during the process of completing the Sunspot, and will be able to apply those lessons to future capital schemes. We have increased the capital delivery capacity of the organisation with the appointment of an expert contractor in support of the levelling up schemes.”

Having duly considered the recommendation submitted to Cabinet by the Resources and Services Overview & Scrutiny Committee, together with the response of the Economic Growth, Regeneration and Tourism Portfolio Holder thereto:-

It was moved by Councillor I J Henderson, seconded by Councillor M E Stephenson and:-

RESOLVED that the recommendation made by the Resources and Services Overview & Scrutiny Committee be noted and that the response of the Portfolio Holder for Economic Growth, Regeneration and Tourism thereto be endorsed.