Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 1-19)




  1. Gentlemen, can I welcome you to the first session of the Committee's inquiry into the need for a new European Regeneration Framework? Can I draw to everybody's attention that we have published the evidence that we have received so far. It is available from the Stationery Office at some substantial price, but it is also on the web so that anybody who wants to look at the evidence can see that. Gentlemen, can I ask you to introduce yourselves please?

  (Mr Bloxham) My name is Tom Bloxham, Chair of Urban Splash Group.
  (Mr Hodgson) David Hodgson, Development Surveyor with Miller Developments and Barnsley Miller Partnership.
  (Mr Burrell) I am Mel Burrell. I am Managing Director of St Paul's Developments.

  2. Do any of you want to say anything by way of introduction or are you happy for us to go straight to questions?
  (Mr Hodgson) Yes.

  Chairman: Can I just make the point that if you agree with each other please just keep quiet. If you disagree please chip in as quickly as possible.

Mr Cummings

  3. Good morning, gentlemen. Can I direct my question to Mr Tom Bloxham please? In the Urban Splash memorandum you describe Manningham Mills as a former silk mill in Bradford. You also inform the Committee that you want to develop the Mills and use it as a mixed scheme, and you indicate that costs are high and values are low. Then you argue that the scheme would have been supported under the Partnership Investment Programme. On what basis would the Manningham Mills project go ahead?
  (Mr Bloxham) On what basis would it go ahead now?

  4. No, under the Partnership Investment Programme.
  (Mr Bloxham) There is effectively a gap in the funding between the values and the costs. In the previous scheme, all other things being equal, it could potentially have qualified for the old PIP city grant or gap funding investment. On renewals, as I understand it, it disqualifies on at least two accounts. One is that it has got more than 50 per cent residential element in it and secondly, because of the location of Bradford, it is not an assisted area and the maximum intervention given would be about 7.5 per cent. My understanding of it is that there are different rules in the new system than there were in the old system which make it much harder for the intervention to work.


  5. So what is happening to the Mills at the moment?
  (Mr Bloxham) They are rotting away and really nothing is happening to them at the moment.

Mr Cummings

  6. Can I take you on to the new regime? Does that give you any particular encouragement? Could you perhaps tell the Committee what you believe the barriers to be within the new regime which have stopped the project from going ahead?
  (Mr Bloxham) I think the barriers in the new regime are either technical elements, and I mentioned the elements of residential in it—

  7. But the project has been stopped. Can you give us a reason why it has been stopped? You keep saying you think. Could you be more specific?
  (Mr Bloxham) The project has not been stopped as such. We bought the building in a very derelict state and we put forward a proposal to Yorkshire Forward and Bradford City Council to redevelop it. We have got £10 million-plus of our own funds ready to commit to this area of Bradford. The project is going forward. It is going forward very slowly. A planning application has gone in there and we are really awaiting an outcome from Yorkshire Forward as to whether or not they are able to support it. The feedback we are getting at the moment is that they are having difficulty supporting it because of the new rules of state intervention and the rules of the European Commission.

  8. So it is the actions of Yorkshire Forward which are preventing you from going ahead?
  (Mr Bloxham) If we were able to receive support from Yorkshire Forward or A N Other agency—and for a time Yorkshire Forward and Bradford City Council have been having a discussion between themselves of who is the most appropriate person to support it—the project would be able to go ahead.

  9. What sort of support are you looking for? You say in your memorandum that it is too low to enable the scheme to go ahead.
  (Mr Bloxham) It is financial support. Originally we were looking for some intervention of around the four to five million pound mark. We now believe it will be around the eight million pound mark.


  10. How much money would you be putting up?
  (Mr Bloxham) We are putting in the first phase £10-12 million and then further phases we believe will be self-financing, of probably £20 million or £30 million.

Mr Cummings

  11. Have you ever considered the idea of a joint venture or direct development with Yorkshire Forward?
  (Mr Bloxham) We have already suggested this to them. Because of the nature of the building and the fact that it is a listed building with potentially high liability, everybody is very adverse to owning it at all or getting directly involved with it and feel the risk is better placed in the private sector.

  12. Have you really though examined in detail and in great depth the possibility of joint ventures? Within the five new schemes there are joint venture powers.
  (Mr Bloxham) We have spent a lot of time and energy talking to Yorkshire Forward and we would be happy to explore any route that successfully sees Manningham Mills being redeveloped.

  13. Where is the blockage here? Is Yorkshire Forward not playing ball? Are you yourselves being too shy?
  (Mr Bloxham) I do not think we would be accused of being too shy by anybody there. I think you are taking evidence from Yorkshire Forward. From our point of view we are committed, we have the funds, we are the people pushing forward, and we are very eager to invest in it. From our point of view the blockage is with Yorkshire Forward or Bradford City Council.

  14. How would you see a way round it? Are you just going to leave it there?
  (Mr Bloxham) We have invested the best part of a million pounds now on this and we have been going for three years and we have had a series of deadlines when everyone says it is going to be sorted by. At some stage we will have no choice but to withdraw and go and find somewhere else. These projects are so complicated, so difficult, it is so much easier for us to do a scheme in Manchester city centre which requires no grant funding, which you can get on and actually do. If these sorts of buildings are going to be saved, buildings in areas where the market has totally collapsed and there are all sorts of other problems in the areas, it needs the public sector and the private sector to work together and to invest heavily and take risks.

Christine Russell

  15. Does it probably mean that in the future you will be less likely to invest in these more difficult sites and buildings than you have been in the past because of the new funding regime?
  (Mr Bloxham) Yes is a very easy answer to that.

  16. Having read your memorandum, Mr Burrell, can I ask you how have the funding changes affected the locations and the sites that St Paul's Developments are thinking of investing in in the future?
  (Mr Burrell) To date they have not affected them in any detrimental way. We have been relatively successful in accessing Objective 1 funding which is now available in South Yorkshire. With regard to the other sites that we are pursuing, we have not so far pursued the replacement to PIP for funding for those, primarily because we will endeavour to access Objective 1. In South Yorkshire at least there is an interesting difference between the replacement funding that may be being talked about here and Objective 1 and how those two come together. I find it a little difficult to differentiate with regard to the manner in which Yorkshire Forward is managing them, but, in direct answer to your question, we have not found a difficulty because we have been able to access Objective 1.

  17. Can I move on to David Hodgson because in your memorandum you do seem to indicate that in the current climate of uncertainty there is evidence that developers are moving away from some of these difficult, challenging sites in inner city areas?
  (Mr Hodgson) The difference there would be that we are aware of the projects that Mel is pursuing. Mel is after large strategic sites and Objective 1 is to put infrastructure in which is, as I say in my memorandum, what Objective 1 is all about—opening up large strategic economic drivers for a region. Where I was coming from was small, individual projects, say, a one-off office building or something like that, where values have decreased to the detriment of Barnsley, for example, and where there is this cost/value gap and you need to secure a tenant, secure a funder, secure the site, get everything else moving forward, and also in the background of all that, go through what is a lengthy Objective 1 application process when you are talking about one single stand-alone project.

  18. Is it speculation on your part or have you actually got any hard evidence of developers turning their backs on sites which they may have been interested in under the former funding?
  (Mr Hodgson) It is really anecdotal evidence, talking to other developers who have said, "We have tried Objective 1 on that basis and it did not work for us because it just took too long." I am personally involved in a 10,500 square foot office building in Barnsley so it is not going to suddenly lift the region, but it is a big thing for Barnsley because that quality of office development does not happen in the town because there is this cost-value gap. I secured a tenant back in September and I am still progressing an Objective 1 application. I have found the application process so lengthy, and I have involved a lot of the council's time and you have to bring in the tenant and the operation of their business etc, and we are still not quite at a decision yet. This one is okay because the tenant is there, he wants to be in Barnsley, but how many times that happens is probably not too many.


  19. If the tenant could choose where he went he would be away?
  (Mr Hodgson) Yes. I made the point that tenants nowadays are much more footloose and do not necessarily come to us and say, "I have to be in Barnsley come what may on that site". It is fairly easy for them to take the view of, "Why do I not just go 15 minutes down the road into the centre of Sheffield?"

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