Agenda item

Cabinet RECOMMENDED that Council approves a 25 year loan of £1,850,000 through the prudential borrowing facility in order to address the funding gap in respect of the Cambridge Ice Arena.

The report considered at the meeting of Cabinet on 14 July 2016 is attached, together with an updated appendix.

The appendix contains exempt information as defined in paragraph 3 of Schedule 12A of Section 100(A)(4) of the Local Government Act 1972, as amended.  This document is therefore unavailable for publication and the press and public are likely to be excluded from the meeting during consideration of the item.

Council APPROVED a 25 year loan of £1,850,000 through the prudential borrowing facility in order to address the funding gap in respect of the Cambridge Ice Arena.

Councillor Simon Edwards, Portfolio Holder for Finance and Staffing, presented a report which provided the Council with an opportunity to consider approving a loan of £1,850,000 to the Cambridge Leisure and Ice Centre for the Cambridge Ice Arena. 

Councillor Edwards said that this provided the Council with a great opportunity to be part of providing an exciting facility for South Cambridgeshire and the city of Cambridge, with the Council essentially being asked to provide the final part of funding to ensure delivery of the arena.  A copy of the business plan was appended to the report.  It was noted that the £1,850,000 would be funded through the Council’s prudential borrowing facility and would result in the Council receiving approximately £500,000 in interest as a result.  Alongside this financial benefit, however, Councillor Edwards made the point that supporting this proposal meant that the Council would be helping to deliver a wonderful community facility.  He referred to the Wing development and was of the opinion that something like this would make a real difference and help with the creation of a new community in the area.

Councillor Edwards proposed the recommendations of Cabinet, that the Council approved a 25 year loan of £1,850,000 through the prudential borrowing facility in order to address the funding gap in respect of the Cambridge Ice Arena.

Councillor Peter Topping, Leader of the Council, seconded the proposition.

Councillor Robert Turner, Portfolio Holder for Planning, supported the proposal and highlighted paragraph 6 of the report which stated that the proposed ice arena met the needs of the Cambridge Leisure and Ice Rink Centre, the University of Cambridge, but more importantly from Councillor Turner’s perspective, the wider community and catchment area.

Councillor John Williams was disappointed that the University of Cambridge had not backed this proposal financially and asked whether the project, with this loan, had sufficient funds in place to proceed. 

Councillor Charles Nightingale sought an assurance that the facility would be open for public use and not restricted by club membership. 

Councillor Nigel Cathcart asked why the City Council or County Council had not been asked to invest in this project or approached to provide the loan.  He was also concerned about the costs of the project overrunning and was unsure who would be responsible for paying the balance in such circumstances.  Councillor Cathcart was surprised that no reference had been made to revenue, trading performance, anticipated receipts or expenditure as part of the business case.  He questioned the anticipated take up of people seeking to use such a facility, which he perceived as being to facilitate specialist sports, and asked whether enough work had taken place with experts to establish the managerial and operation aspects of this proposed ice arena.

Councillor Bridget Smith, Leader of the Opposition, reflected on the amount that had been requested, which equated to a significant 40% funding gap, noting with caution that bank funding or other grant funding opportunities had not been approached.  However, having attended a recent briefing for Members of the Council and having had the opportunity to ask questions and learn more about the detail behind the proposal, she outlined her support for the loan.  She explained that this project had already been ongoing for ten years and that the ice arena, when built, would provide 15 fulltime equivalent jobs for the area and that the design of the facility itself was environmentally sympathetic and sustainable.  She added that the risk to the Council was minimum.

Councillor Douglas de Lacey was surprised that the report or business case did not include a risk assessment.

Councillor John Batchelor asked whether consideration had been given to the use of the UK Municipal Bond, further to the previous item, rather than through prudential borrowing in order to finance the loan.

Councillor Aidan Van de Weyer said that this would be a great resource for local people, but was disappointed with the business case which he felt lacked detail.  He also attended the briefing for Members and had welcomed the opportunity to ask questions, following which he was supportive of the proposal.

Councillor Peter Topping echoed the point raised by Councillor Nightingale and agreed that this facility had to be open to the public and for community use.

Councillor Nick Wright, Deputy Leader and Portfolio Holder for Corporate and Customer Services, said that ice skating in particular was a very social sport.  He referred to the significant number of people attracted to the temporary ice rink erected at Parker’s Piece in Cambridge every year as anecdotal evidence that there was demand for this facility.

In answer to the questions put forward as part of the debate, Councillor Edwards made the following points:

·         the Council would do everything it could in working with partners to ensure that this facility was open to the public and for community use;

·         the amount requested via the loan was the only missing element of funding for the project, so the project would be able to proceed should the loan be approved;

·         the City Council or County Council were not involved in this proposal due to the fact that South Cambridgeshire District Council was approached to provide the funding first;

·         a risk assessment had been undertaken and was considered as part of the Council’s due diligence and in the writing up the draft loan agreement, with contingency plans forming part of that;

·         in terms of trading, the facility managed by the same operator in Stretton exceeded all expectations in terms of revenue, with another facility at Swindon achieving one million visitors in its first year.  The Swindon facility had a catchment of 50,000 people whereas the Cambridge Ice Arena would have a catchment area of approximately 400,000 people;

·         borrowing could have taken place through the Municipal Bond, but it was felt that the amount being borrowed was too small to justify it.

Voting on the proposition, with 45 votes in favour and 2 abstentions, Council APPROVED a 25 year loan of £1,850,000 through the prudential borrowing facility in order to address the funding gap in respect of the Cambridge Ice Arena.

Enough Members as prescribed by Council’s Standing Orders requested a recorded vote.  Votes were therefore cast as follows:

In favour

Councillors David Bard, Val Barrett, Henry Batchelor, John Batchelor, Anna Bradnam, Francis Burkitt, Brian Burling, Tom Bygott, Doug Cattermole, Graham Cone, Pippa Corney, Simon Crocker, Christopher Cross, Kevin Cuffley, Neil Davies, Simon Edwards, Sue Ellington, Roger Hall, Lynda Harford, Mark Howell, Caroline Hunt, Peter Johnson, Sebastian Kindersley, Janet Lockwood, Mervyn Loynes, Ray Manning, Raymond Matthews, David McCraith, Cicely Murfitt, Charles Nightingale, Des O’Brien, Tony Orgee, Tim Scott, Ben Shelton, Bridget Smith, Hazel Smith, Peter Topping, Ingrid Tregoing, Robert Turner, Bunty Waters, Aidan van de Weyer, David Whiteman-Downes, John Williams, Tim Wotherspoon and Nick Wright.

Abstentions

Councillors Nigel Cathcart and Douglas de Lacey.