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We recently advised on a genuinely innovative project, in which a local authority and a housing association partnered with the community in an imaginative and supportive way. There is much to be learned from the relationship, which facilitated meaningful change to the local area, but involved minimal risk to the authority.
The project was the refurbishment of St George’s Hall, in Bewdley, Worcestershire, a much loved but under invested facility at the heart of a market town. Three local community organisations – Bewdley Development Trust, Bewdley Community Festivals, and the trustees of the charity that owns the hall – felt passionate about investing in the building and wanted to turn it into a modern, exciting space.
Securing initial funding was a major success, with the Department for Environment, Food and Rural Affairs (DEFRA) agreeing to grant £825,000 towards the refurbishment project. In addition, the local authority, Wyre Forest District Council, gave funds towards the cost of setting up a joint venture body to steer the re-development and also a few other associated outgoings. Despite such generous investment, there was still a large problem to solve, one which faces many grant-funded ventures which use public funding - cash flow.
Public grant programmes rarely pay out in advance, with any expenditure having to be ‘incurred’ (monies spent) before it can be reimbursed. If you are a community organisation, and you have minimal financial reserves and a contractor to pay, resolving this issue is a major challenge. When the grant programme won’t pay out until all the work is done, the whole development has to be bankrolled by someone else, someone with more excess capital than most community bodies possess.
However, in this case, the local authority and the local housing association were prepared to do what was needed to make the re-development happen. Wyre Forest District Council and Wyre Forest Community Homes entered into an innovative rolling loan agreement with the joint venture, made up of the Development Trust, Community Festivals and the hall trustees, under which they agreed to bankroll the development up to a maximum figure which could be called on at any given time. Repayment was flexible so that it could be adjusted to take account of when grant payments would come in. Interest, at a low rate, was flexible too.
The spirit in which the funding agreement was negotiated and agreed was of the utmost importance, with neither the authority nor the association seeking to control the development, or to interfere in its management. They simply acted as an enabling force. They listened to what the community required, recognised that this was a genuinely community led initiative, and they got behind it. As a result the refurbished hall will open this summer.
Despite the project appearing to be quite small, the impact on the community is huge. Agreements of this nature are possible whatever the scale of the project, but what is essential is for local authorities to be prepared to partner in an equal and balanced manner with the community. In a time when the Government agenda repeatedly focuses on local decision-making rather than central control, local authorities can have the opportunity to catalyse their community, enabling great change, and sometimes at minimal risk.
David Alcock is a senior associate at Anthony Collins Solicitors.
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