CAMPAIGNERS claim Herefordshire Council has committed county taxpayers to funding a quarter-century of running costs for the Marches Local Enterprise Partnership (LEP) through an agreed investment approach to the Hereford Enterprise Zone.

Yesterday, the Hereford Times reported that nearly £50 million  has been staked on Hereford having a new road over the Wye.

A report revealed that if the crossing does progress it could be worth that near £50 million to the LEP for re-investment.

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

The agreed scenario by which a crossing could be achieved has the 25 year running costs of the LEP met through £100,000 a year in additional business rates from 2016/17.

Today, campaign group Here for Hereford (HFH) called for a scrutiny inquiry into what the council had been committed to.

In a statement, HFH claimed that obliging the council to find  that £100,000 a year to fund “certain unspecified” LEP running costs effectively commits the authority to paying £2,500,000 over 25 years with no guarantee of business rates income in each of these years.

The report to the LEP committee concedes that a return from the zone  "has to be worked hard"  with the potential of not making a return until 2022/23.

HFH says that if the return were then starting to be reached, the council  would have funded £700,000 of tax payers' money before - if at all - being able to draw down on the £100,000 each year from business rates accrued.

HFH says that, at the very least, scrutiny councillors should be asking whether or not these figures have been included in any of the budget or policy papers put before full council or cabinet.

But the process by which the council committed itself to the scenario could be questioned as not handled in accordance with the council’s constitution as it has not appeared on the agenda of any council or cabinet meetings and has not been discussed in either of these forums, claims HFH.

The HFH case for a scrutiny inquiry is being circulated amongst councillors from today (Tues).

Cllr Sebastian Bowen, chairman of the general overview and scrutiny committee, said the issue would considered for a call-in if raised.

Meeting this Thursday, the council’s cabinet is expected to re-affirm its commitment to SC2 knowing that the LEP has called a new river crossing “critical” to the success of the enterprise zone.

Last Thursday, the LEP 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 on Thursday, 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.