Near £50m staked on new river crossing for Hereford

A report reveals that if the crossing does progress it could be worth that near £50 million to the Marches Local Enterprise Partnership (LEP) for re-investment.

The LEP is a driver of the Hereford Enterprise Zone at Skylon Park, Rotherwas.

Potential funding for the road is identified in overall funding for the zone.

Herefordshire Council’s cabinet meets this Thursday to re-affirm its commitment to SC2, a southern link road for Hereford seen as the first part of a new route crossing the Wye to the west of the city.

Meeting last Thursday, the LEP joint executive committee backed a new river crossing as “critical” to the success of the Hereford Enterprise Zone at Rotherwas.

Funding for the crossing could be found through the £millions coming to the zone.

The committee was reviewing options  to accelerate delivery of the zone noting the “limitations” that the city’s existing infrastructure could have on the project’s progress.

An advisory report to the committee from DTZ – commissioned by the government to work with enterprise zones across the country - to the committee considered the project’s financial position under three scenarios:

* Base Case – a summary of  interventions by  Herefordshire Council and outcomes to date, with £3.8 million of committed spending likely to provide an estimated take up of 35,525 sq m.

If no further proactive interventions were adopted, the report forecasts the rate of income over the 25 year life of the zone would be £21.3 million.

Following removal of costs and allowing for a contingency, a net surplus of £7.5 million would be generated over the 25 year period.

* Partial implementation of interventions but no river crossing

A range of further intervention measures or work costing £10.6 million would increase take-up across the zone to an estimated 49,435 sq m.

This would generate an estimated rates income of  £33.3 million.

Following removal of costs and allowing for a contingency, the report sees potential for a net surplus of £7.8-£8 million over the 25 year period.

* Interventions fully implemented and a river crossing completed

The report says a bridge would enable an estimated take-up of 146,925 sq m at a cost of £17.3 million.

This is said to have the potential to generate rates income of £79.4 million that, following removal of costs and allowing for a contingency, means a net surplus of £4 million over the 25 years.

The committee  was recommended to back the third scenario an investment approach and recognise the enterprise zone funding stream as a potential source funding for a river crossing.

But the report concedes that the success of the scenario does require the “certainty” of that river crossing.

And though the zone’s funding stream needed to remain one of the potential sources for the crossing, it needed Herefordshire Council to adopt a local development framework to make the situation clear.

Under the legislation establishing enterprise zones, business rates that are generated by new businesses occupying space on the zone can be allocated by the LEP to use for economic activity in the LEP area.

The DTZ model shows how this funding stream might be maximised over the life of the  zone to 2038 by investing in infrastructure.

Under the recommendation, Herefordshire Council will fund the interventions specified in scenario 3 on an agreement from other authorities involved in the LEP that those investments - and associated costs - are repaid from business rates.

The report says if the Wye crossing does not progress it is estimated that the additional investment will accrue an additional £7.8 million over the 25 years available for re-investment by the LEP.

If the crossing does progress, the report estimates the additional investment will accrue an additional £40.9 million over the 25 years available for re-investment by the LEP.

As reported by the Hereford Times, Herefordshire Council is expected to stand by its favoured SC2 route for  Hereford’s £25 million southern link road, despite scrutiny committee concerns that the selection process could have breached the council’s own rules.

Cabinet is expected to reject such concerns when it meets next week, citing the “satisfaction” of council officers and outside consultants at the potential for the process to withstand procedural challenge and the case for its costs.

SC2 leaves the A49 at the Rotherwas access road roundabout to pass through farmland and Grafton Wood to cross over the Hereford-Cardiff rail line and under Haywood Lane in reaching a new roundabout near the A465-B4349 junction.