When Full Council and Cabinet considered the revised budget requirement for the scheme in January 2022, the revenue costs (£210k) of the associated borrowing required (£6.625m) at that time was based on the prevailing rates at 2%, and could be more than fully funded by the revenue impacts of closing Hythe Pool and the Management Fee income from the new Operator.
If the scheme costs were to be increased to £49m (based on a 5% contingency), the revenue implications of the capital financing (borrowing of £10.7m) would be £583k (based on current rates) per annum. This cost would need to be met from general fund revenue resources. In addition, as outlined in 2.2 and in the Cabinet paper in July, the operator costs are anticipated to move due to the rises in energy prices globally. Whilst the original position reported in January 2022 anticipated an annual income to the council from the operator (from year 2), this is now anticipated to be an annual cost to the Council (for the first ten years of operation).
The Council has incurred a significant sum on this project to date. Further work is required to estimate the final value but it is anticipated that if the project does not proceed, the Council will be required to write off revenue costs in the region of £4-5 million. These costs will need to be met from General Fund revenue resources and the write off will need to be made in year to comply with capital accounting requirements. If the decision is taken to re-evaluate the available options this will be more fully explored and considered as part of that picture
Privacy & Cookies Policy
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.