Agenda for Scrutiny Panel on Seafront Infrastructure on Tuesday, 25th March, 2014, 9.00am

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Agenda and draft minutes

Venue: Committee Room 1, Hove Town Hall. View directions

Contact: Karen Amsden 

Note: meeting in pubic 

Items
No. Item

6.

Chair's Introduction

    Minutes:

    6.1       The Chair (GM) welcomed everyone to the second meeting of this scrutiny panel. The first meeting on the 18th March had been very successful and the panel had heard from a number of community representatives.

     

7.

Procedural Business

    • View the background to item 7.

    Minutes:

    7.1       There were no declarations of interest and no declarations of party whip.

     

8.

Witnesses

    Witnesses will include:

     

    • Geoff Raw, the Executive Director for Environment, Development and Housing, Brighton & Hove City Council (BHCC)
    • Mark Ireland,  Head of Strategic Finance & Procurement, BHCC
    • Michael Levy of Castor & Pollux
    • Andrew Renault, Head of Transport Strategy & Projects and Leon Bellis, Senior Engineer, BHCC
    • Nick Hibberd,  Head of City Regeneration, BHCC
    • Ian Shurrock, Head of Sport & Leisure and Toni Manuel, Seafront Development Manager, BHCC
    • Martin Eade, Coast Protection Engineer, BHCC
    • Howard Barden, Head of Tourism & Venues, BHCC

     

    Minutes:

    8.1         Geoff Raw (GR), Executive Director for Environment, Development and Housing  began by saying how pleased he was that this scrutiny panel was being held as it was essential for the regeneration of the seafront. Our offer to tourists and visitors was vital, so the council needed to think about the next 5-10 years of investment needed in this area. Over the last few years the council had developed two key strategies.

     

    8.2       Firstly, an economic development strategy which had:

     

    i) Identified the tourism offer as essential to the well-being of the local economy, in particular our regular visitors as well as new international tourists. It was vital to know who they were, how much they spent and how to improve the offer to generate more spend. While the city wanted to encourage all visitors, there is an opportunity to bring more tourist spend Brighton & Hove which would mean more jobs. 

     

    ii) The importance of the conference and business offer. One of our distinctive attractions was the cultural facilities the city could offer to conference visitors. This in turn attracted other non-tourism related businesses and helped to attract skilled people to the city, such as Richard Florida who has written about the importance of place in attracting and hosting ‘creative communities’ is a useful reference source in thinking about how we support economic growth in the city. Making attractive places to visit makes for attractive places to live and in turn makes the location more attractive for more businesses. There were a lot of wonderful coastal towns in the UK, but as tourist destinations alone most did not offer high value jobs or high wages. So we needed to plan how we can add more value to our tourist and visitor economy and exploit the interplay between the wider economy and the tourism economy and the higher value jobs and the financial gain they bring to the city as a whole including the city council.

     

    8.3       Secondly, the draft Seafront Strategy. This had raised aspirations and set a vision for different areas of use along the seafront. It had stopped short however at defining an investment strategy. The council needed to produce an investment strategy for the seafront, both for itself and other potential public and private investors.

     

    8.4       Given public expenditure constraints, there would not be billions to draw down from government to invest in the seafront and public funds alone were not a panacea. The council needed to use public money to lever in private money. Developments which could do this, included sites at the:

     

    ·         Conference Centre

    ·         Black Rock

    ·         King Alfred

    ·         Marina

     

    8.5       These developments would need significant private investment. However, the council as the landowner was in a good position to lever in these resources. The scrutiny panel could help to steer the direction and inform officers involved in the procurement process for projects such as the King Alfred. The council was in discussions with Standard Life Investment about the Black Rock and Churchill Square sites. It was also in discussions with other developers about developments at the Marina.

     

    8.6       It was important to ‘string the pearls’ of seafront development sites together, to spur a critical mass of investment. Nothing succeeds like success. If you can build investment confidence then the city can be positioned for strong economic growth. Both the council and the city needed to run at pace with the work of the Economic and Seafront Strategies, to develop the Vision for the seafront and secure the public and private investment.

     

    8.7       GR referenced the National Geographic international top 10. It was a very ambitious target for Brighton & Hove, as cities like Rio de Janiero featured in this top 10. However the city should be ambitious, as it was the premiere beach destination in the UK. The city had 10m visitors in 2013, and this was likely to grow - but only if the offer was sufficiently attractive.

     

    8.8       The council was keen to explore what would draw higher spend visitors and higher investing businesses. There may be a need to reinvent ourselves with developments such as:

     

    ·         i360,

    ·         A new improved conference offer,

    ·         New residential accommodation at sites such as King Alfred.

     

    8.9       Lessons could be learnt in how to approach development opportunities, including:

     

    ·         Being more business minded,

    ·         Looking at what opportunities could these developments bring in terms of business rate income, New Homes Bonuses, Council Tax receipts and government investment – it was especially important for members to understand this

    ·         Gathering good information to inform discussions with residents and businesses, particularly as development schemes came forward.

     

    8.10    It would be great if the panel could engage with businesses and residents to develop a view on:

     

    ·         Realistic options,

    ·         Real opportunities,

    ·         What businesses need.

     

    8.11    The City Deal engagement with government and the Greater Brighton Economic Board – which involves neighbouring authorities were good vehicles to draw together the key public bodies.

               

    8.12    Q: What opportunities were available for the Greater Brighton area and the strategic economic plan, and how might the seafront feature?

     

    The Government has asked for information on how much resources we can put into projects, and it was known how the Government would follow this through. The seafront was part of this equation and improving the transport infrastructure was also part of the bid. There could also be major project funding via the Local Economic Partnership, some of which would touch on the seafront. There was the need to consider ‘what is a seaside offer?’ The  business offer would come partly from ports, such as Shoreham. There was a need to develop new businesses and the City Deal had identified six growth areas, including investment in high value eco-tech employment. The location would be very important for businesses and employees.

     

    8.13   Q: The city attracts day visitors, overnight and conference visitors. At the moment, the visitors come predominantly for the day so how can we attract more overnight visitors who have a significantly higher spend?

     

    GR told the panel that on average the overnight visitor spent 9x more than a day visitor. There was the opportunity to capture more of that market, now that London was the most visited city in the world. However, one needed a strong offer to capture this market.

     

    8.14    The value of developments like the i360 was in developing a critical mass of attractions to entice this market. This can enable joint ticketing, tours round the city and using the capacity of hotels. International visitors expected four and five star hotels and the expansion of Gatwick could bring more foreign trade. Out of those arriving at Gatwick, currently 90% of visitors went to London and 10% travelled to Brighton. So there needed to be a strong offer to those who arrive in Gatwick. The rail link needed to be improved to increase the capacity and transport visitors to the city. Sundays were a very big problem on Network Rail. There currently was spare capacity on the railways at off-peak times, so increasing off peak usage would generation additional revenue for the train operating company and would prove a profit incentive. One could market timed visits to the city to encourage visitors to come at off-peak times. Spreading out visitors throughout the year could be far more beneficial to the city than a smaller number of huge visitor peaks.

     

    8.15    Q: Has there been any specific information gathered from tourist about what they thought of the seafront?

     

    GR told the panel that carrying out such a survey could be one of their recommendations.

     

    8.16    Q: Members are aware that reports on specific investment opportunities have come to committee, but there never has been a comprehensive report on the state of the seafront and the money it needed. Given that seafront structures were now on the risk register and Shelter Hall was being propped up, why had nothing been put to members? There was also a need to look at the different kinds of bids, what were our priorities and what could be achieved with our own limited capital programme.

     

    GR told the panel that the Seafront Strategy had raised aspirations but had not identified all of the business opportunities. The Transport team had done a significant amount to develop bids, but there was no investment overarching strategy as yet. The council would produce this investment strategy to give a more comprehensive understanding of the amount needed to be spent on the seafront. This needs to take full account of how such work would be funded, identify what were the private finance opportunities and what the council would contribute. This was vital as it was not always clear to Members and the wider community what the funding opportunities are, albeit funding opportunities did exist in both public and private sectors. These opportunities needed to be brought together, and the council was already making progress on this. 

     

    8.17    GM said that it was likely to be a key recommendation that there needed to be a project board and project plan for this issue.

     

    8.18    Q: It seemed difficult to make a business case for carrying out works to Madeira Terrace, could you make such a case for this?

     

    GR told the panel that the funding available tended to be for economic growth purposes and in many cases involved loan payments. Unless a section of the seafront was about to collapse then the investment priority needed to be in things which could generate an income return. It wasn’t apparent how the  Terraces would generate an income return and income revenue.

     

    8.19    The Riptide Gym, for example, would take around three to four months to restore as an area and if investment was put into that structure it would at least generate an income stream to contribute to pay back that investment. The Arches neighbouring the i360 were being fitted out to create a more lettable space. Given the public expenditure constraints the council had to think with a more commercial hat on. The council was asset rich but was set to become cash poor as central government grant is reduced. Hence it had to think long and hard about sweating its assets to generate more revenue. In short, therefore it was more difficult to see the business case for prioritising   Madeira Terrace over other places.

     

    8.20    Michael Levy (ML) suggested to the panel that a long glass building could be placed under the terraces, to turn into a space such as an artists’ workshop: like Crystal Palace. One may lose some parking in the process.

     

    8.21    GR emphasised the need to look at the business case and the Seafront Strategy had identified zones for the seafront to guide where to situate developments. On top of this we needed to look at where to get public and private money for the seafront.

     

    8.22    Q: How would you draw tourists and visitors along the seafront, in order to generate a greater spend across a wider area?

     

    8.23    The panel needed to keep thinking about what makes business sense to carry out on the seafront, especially in terms of what resources could be levered in.

     

    8.24    Mark Ireland (MI), Head of Strategic Finance & Procurement began by describing the financial context which was faced by all councils. There were a different set of drivers for the authority than from a few years ago. Despite the economy coming out of recession and experiencing growth, there was still a huge national budget deficit and the country was still half way through a period of austerity. The council, like others, was likely to face further reductions in funding until at least 2019/20. In the current year the council was getting £78m of general funding, which could be reduced to £2m by 2019/20. This was a huge loss of funding and if the council was to sit back and do nothing it would result in a substantial reduction in council services. Actions needed included:

     

    ·      Increasing income streams and investigating new ones

    ·      Introducing better ways of doing things and value for money programmes.

     

    8.25    Increasingly the council received its funding based on incentives. Grants used to be distributed based on fundamental principles of need which could not be influenced by local authorities. The biggest change had been the ability from April 2013 onwards of councils to retain some of their business rates. The seafront is critical to the local economy and therefore in the growth of the base of business rates. If the council does not pro-actively develop the sector, then this income stream could reduce. The council could experience a significant drop in current annual income of £51.6m (which was its current share of business rates) if the local economy worsened. 

               

    8.26    MI explained that other incentives for councils included the council tax reduction scheme, for which the funding was fixed. If the council was able to promote more people finding jobs in the city there would be a reduced demand for discounts on this tax, then less money was needed by the council. Another was the New Homes Bonus paid to councils building new homes and bringing homes back into use. Previously councils did not use to have an incentive to grow the council tax base, as any increase was offset by a £1 for £1 reduction in grant. Now the council would receive an incentive to grow the base. There are new funding opportunities; but they were increasingly competitive. The critical factor in attracting funding was to be able to demonstrate that the project was creating and maintaining sustainable jobs. For example, the Local Enterprise Partnership (LEP) and the Coastal Community Funds had to demonstrate that the schemes they approve were growing or maintaining jobs.

     

    8.27    MI felt it was essential that the council had a good grasp of what income and jobs were generated by the seafront and other information needed to inform our bids for funding.

     

    8.28    Q: What would an investment strategy for the seafront look like?

     

    MI explained that an investment strategy would need to contain:

     

    ·         Base of information about each of the structures,

    ·         A statement on what you want to achieve and knowing how measurable this is,        

    ·         An assessment of what absolutely has to be done, for example to comply with Health and Safety legislation,

    ·         The inclusion of all the elements of the needed investment,

    ·         The incorporation of all possible returns, or leverage of private funding, and other public streams of finance

    ·         The need to cast the net as widely as possible and explore different solutions that may be available for different parts of the seafront.

     

    8.29    GR told the panel that there were methodologies to predict the return on investment to look at how public funding can be turned into increased jobs and the additional leverage. This could be a recommendation of the panel to help members make an informed decision, after looking with rigour at the return that can be gained from investment decisions. A distinction also needed to be made between using the following sources of BHCC money:

     

    ·         Business rates

    ·         Rents

    ·         New Homes Bonus.

     

    8.30    There should be a rigorous look at the returns from each form of funding to determine what should be done on the seafront. For example, the biggest business rate return would come from large retail stores being built on the seafront. So members needed this kind of information.

     

    8.31    Q: Do you support the proposal to ring fence the income from the seafront to be spent back on the seafront?

     

    MI explained that he was not a fan of ring fencing because it can eliminate choice, especially in times of limited resources. He felt it was not realistic to ring fence the existing income, as this would upset existing budgets. However the new income streams which could be being generated by the seafront, such as the income from the i360 (which could generate £1.2m p.a.) – that has been ring fenced for reinvestment in the seafront.

     

    8.32    Q: Is this new income ring fenced for the seafront, as has not seen this written down?

     

    MI said that this was one of the recommendations of the i360 report agreed by Policy & Resources Committee on 6 March 2014. 

     

    8.33    Q: Do you know what other funding opportunities have been gained by other local authorities?

     

    MI told the panel that all seaside areas have looked at putting together a package of funding from different sources. For example the Coastal Communities Fund, which BHCC had not been successful so far in bidding for, had given £1.5m - £2m for a range of seafront projects. An example is the funding Sunderland gained for its seafront infrastructure. This funding primarily relates to sustainable jobs, so needed to be able to demonstrate this in any bid.

     

    8.34    Michael Levy (ML), Owner of Castor & Pollux Art Gallery told the panel that his gallery was the largest independent art space on the beach, comprising of 3 arches in the middle of the seafront. One arch was a gallery, another a bookshop and then last a workshop. The space had been very shabby when he had begun renting it, so he had spent a lot of money making the space ready to use. He employed 2 part time members of staff, compared to 8 years ago when he had 5 staff – in the good old days.

     

    8.35    He was often asked ‘what is such a nice place, of such quality, doing in a place like this?’  This was because his art gallery was surrounded by shabbiness and mess. He opened the business every day, unlike most of the businesses which were weather dependent so opened when it was forecast to be good. He mainly catered for local people (around 50% of his market), so visitors were a bonus. In his experience the locals use the beach all year round, except in the summer. ML felt that the middle section was the shabby part of the beach.

     

    8.36    His sales were lowest in January and building up through summer. They had to employ extra people in summer to keep an eye on the large number of people coming into the gallery. He felt that the best bit of the season was from September to Christmas, and thought that some of the other businesses and galleries did not always see the benefits of winter. He sometimes went on holiday in August. However it was made harder by there being no shelter on the seafront and no public seating. This meant there was nowhere for people to sit in the rain. Often February can be a busy month.

     

    8.37    It was still a struggle to finish a year in profit. Energy costs were rising and the impact of internet mail order e.g. Amazon were factors that all businesses had to deal with. Making a profit was getting harder and posing more of a challenge. However, the gallery had been there for 15 years and was a forward looking business. It had opened at the same time as some other businesses such as Due South and the Riptide Gym. Lately the surroundings had become shabby and dirty and the railings had not been painted for years. There used to be a daily wash of the seafront.

     

    8.38    ML visited other European seafronts regularly and sees streets swept and a sense of optimism, but he felt that the Brighton & Hove seafront seems to be neglected. One can worry about the structures, but if you do not look after what we already have it will look neglected. There were three large recycling bins directly outside the business which tend to be only used by the local residents.  These bins can easily fill up with rubbish piled around them leaving the visitors having to squeeze past them. There are also ugly temporary toilets (or portacabins) on the seafront, when this is supposed to be a beautiful European city.       

     

    8.39    The arch which housed his gallery had always leaked like a sewer, it supports the road and unsurprisingly it leaks. There had been an attempt 15 years ago to put a membrane over the structure, which had worked fantastically for three weeks until it was dug up by a utilities company.

     

    8.40    ML would like to see a year round seafront being encouraged by:

     

    ·         Council-run festivals in the off peak seasons,

    ·         A solution being found to the rubbish,

    ·         Providing decent lights, for example decorative lights on the lower promenade which could also increase safety and reduce the probability of drug dealing,

    ·         Using different symbols on lamp posts to signify different areas - like the Miffy symbols in Amsterdam and Rotterdam,

    ·         The city does not have a major art gallery, like St Ives does. So a museum, such as a Tate, would be a significant draw.

       

    8.41    Q: When going on our tour of the seafront, I was horrified by the rows of bins there. How do you feel about them?

     

    ML explained that they take their bins in. In the heat the beach stank and the pavement gets covered with chips, vomit and ice cream and needed regular clearing up.

     

    8.42    Q: I am very surprised that you have decreased trade in the summer, do you think it would be beneficial to make the areas on the seafront more zoned e.g. from more high end areas to the ‘kiss me quick’ ones? Also do you have to work harder to promote your business, as it could seem more cut off on the seafront?

     

    ML told the panel that he would not support zones for fears that it could ghettoise certain areas. He preferred to see it spread out like a necklace. There were very smart areas and very shabby areas, but he did not want a gallery in Bond Street. He felt that now people walked the whole length of the seafront. He explained that while he did use the internet and Facebook to promote his business, it was not really dependent on this kind of promotion and people came to Brighton to get away from it all.

     

    8.43    Q: Do you have any ideas on how money could usefully be spent on the seafront?

     

    ML believed that small things could make a significant difference without spending much money. He would like to see major art exhibitions as part of the Brighton Festival. While he loved the Brighton Museum, it was not a nice modern gallery like Bexhill.

     

    8.44    Q: Are there any traders groups on the seafront which work together?

     

    ML explained that he really did not have the time to participate. He was aware of a traders’ group up towards the fishing museum. But his experience when running a pottery business at Camden Lock, was that these can be a moaning shop.

     

    8.45    Q: Well done for being in business for 15 years, do you have a feel for the turnover of businesses in that time?

     

    ML thought the clubs changed hands a lot and it was thought that they paid a very low rent due to an arrangement when the beach was regenerated 20 years ago. He thought there was not such a high turnover among the artist’s units. This was because you had to spend so much money on the structures to make them workable, that then you could not afford to leave. His business was lucky to clear £10,000 and he was lucky to be subsidised by a partner with a proper job.

     

    8.46    Toni Manuel (TM) clarified that bars and clubs on the seafront paid a commercial rent.

     

    8.47    Andrew Renault (AR), Head of Transport Strategy and Projects and Leon Bellis (LB), Senior Engineer gave a presentation to the panel meeting. AR began by explaining that the council was the responsible as a Highway Authority under the 1980 Highways Act. The role of the seafront structures were to:

     

    ·         Support the road and promenade above them,

    ·         House businesses (which made it so interesting to hear the perspective of a trader before them).

     

    8.48    There were three kinds of structures:

     

    ·         Arch/bridge

    ·         Retaining walls

    ·         Railings – protective.

     

    8.49    The majority were over 120 years old and their main issues were the age of the structures and the need to bring them up to modern standards.             

     

    8.50    The main area of the structures was from the Peace Statue to the Marina and their total asset value equalled £300m. The management of the assets had been higgledy-piggledy when governed by East Sussex. Now all the structures have been mapped and agreed with GOSE in 2005. The asset value of £300m represented the gross replacement cost under CIPFA guidance. Councils were encouraged to develop an asset management strategy for these structures. Each year the council produced an annual return to central government about these assets.

     

    8.51    The seafront had moved south over time and had different construction techniques, leading to the number of problems that the council was now encountering.

     

    8.52    By the end of the 1700s the seafront was being developed and hotels started to be built on top of the existing small chalk cliff which is now hidden, some of these buildings collapsed onto the beach below the cliffs which have fallen due to erosion. So the Arches were built to stabilise the cliff face and provide a roadway to the south of the town. In the mid-1800s Brighton & Hove became increasingly prosperous, so the structures were extended to give the place a proper promenade and widened carriageway to accommodate the increase in traffic, Pool Valley (old harbour) was filled in so visitors could travel from East to West. Most of the issues arise from the construction undertaken between the 1880’s to the early 1900’s, in particular the filler-beam deck type construction; which was an early form of reinforced concrete. The bulk of the masonry arches which pass under the A259 are in a reasonable condition.  

     

    8.53    There was a need to keep a close eye on the condition of the Arches using inspections, surveys and structural assessments. This information was fed into the Structures Management System (SMS) database which records:

     

    ·         Issues,

    ·         Problems,

    ·         Inspection dates

    ·         Works needed

    ·         Structural conditions.

     

    8.54    Sample condition photographs were shown to the panel which showed:

     

    ·         Typical seafront façade with subsidence and cracks, with a filler-beam deck pushing southwards,

    ·         Deck failure due to a steel beam crack,

    ·         A propped up arch.

     

    8.55    The potential consequences of these structures failing could be catastrophic. Including:

     

    ·         Loss of life,

    ·         Loss of trade,

    ·         Loss of reputation as a destination.

     

    8.56    AR described the potential disruption to movement and access which could be caused when works were carried out to these structures e.g. the diversion of 36,000+ vehicles, 30,000 pedestrians and 2,500 cyclists per day. So the council needed to manage the effect on these movements, when they had to carry out works.

     

    8.57    There were alternatives to renewing structures, such as propping them up or backfill with concrete, closed in perpetuity (to make safe) - but these were not good options where the structures were occupied.

     

    8.58    The estimated current costs of structural works was £80m, based on the costs of rebuilding. It was a national recommendation by ADEPT, that there should be an annual spend of 1% of the £300m asset value on the maintenance, repair and enhancement of this kind of assets. So this would equate to £3m per annum to be spent on the seafront structures. Alas, the council did not currently achieve that figure.

     

    8.59    AR explained that there were a number of sources of funding for seafront structures.

     

    ·         The key source was Local Transport Plan (LTP) funding, which was allocated through the council’s decision making process.

    ·         The council had unfortunately not been successful in securing ‘Pinchpoint’ Funds.      

    ·         S.106 from developments.

     

    8.60    Future funding could include

     

    ·         The LEP Local Growth Fund (LGF) which directly supported jobs and housing. The housing angle was hard to include in bids for the seafront, however the linkages were being made between commercial occupation and jobs.

    ·         The LTP funding allocations would be split 50:50 between integrated transport and maintenance. The council was due to receive its highest level in 2014/15. Whenever there was a peak in funding, it related to seafront structures which needed tackling.

     

    8.61    The funding for 2014/15 was to include £1.42m from the next year’s capital programme and would have to be paid back in the next year’s programme. Slides were then shown of successful works to seafront structures including the Carousels, the Rotunda and Free Shelter Hall.

     

    8.62    Works to the seafront were linked to transport and other major projects. The themes of the Seafront Strategy linked the seafront architecture and coastal protection, for example improving the lighting. Regeneration was carried out by improving transport to increase economic opportunities in this area.

     

    8.63    Connectivity along the seafront was very important:

     

    ·         A259,

    ·         Accessibility both along and to the seafront,

    ·         Improve the pinch points on the seafront when visitors and cars meet.  

     

    8.64    Their work was based on the Seafront Strategy which was used to:

     

    ·         Identify opportunities and where improvements were needed,

    ·         Tie up the investment strategy,

    ·         Include programme of works which needed to be done.

     

    8.65    Q: This has been a concentration on the Brighton seafront, but are there any problems at the Hove end of the seafront?

     

    LB told the panel that there were not the same problems with highways structures, retaining walls and railways in the Hove area. The area from the Peace Statue to the Marina was where the real issues lay.

     

    8.66    AR explained that the edge of the public highway was the end of the responsibility for LB. A different part of the council was responsible for the Hove End footways.

     

    8.67    Q: If £1.4m from the capital programme was being used to complete the work on the Arches, will the money from the LTP need to be paid back into the capital reserves next year?

     

    AR explained that there was £7m in the indicative programme for the 15/16 allocations for the capital programme. This will be reduced by the £1.2m to offset  ...  view the full minutes text for item 8.

9.

Date of next meeting

    • View the background to item 9.

    The date of the next meeting is a drop-in event at Alfresco on 8th April 2014 from 3pm to 4.30pm

    Minutes:

    9.1       The date of the next meeting was 11.04.14.

10.

A.O.B

    Minutes:

    10.1    There was none.

 


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