A council’s plan to build a new cinema in Newmarket could be at risk because the government is now charging more for its loans. West Suffolk Council was expected to approve its business case for the town complex this month – moving a new cinema in Newmarket closer to reality.
Earlier in the year the authority, then Forest Heath, backed spending £190,000 to draw up detailed proposals for the complex which is planned for the front entrance of The Guineas Shopping Centre, in Fred Archer Way.
As part of the authority’s funding for the scheme, it wanted to borrow money from the government’s Public Works Loan Board. But in October the government increased how much it charges for councils to borrow money and hiked rates from 0.8 to 1.8 per cent.
At a November meeting of the district’s performance and audit scrutiny committee, councillors were alerted to the ‘unexpected’ change. Members were told some councils had ‘substantially increased’ their use of the government loan, which is why the Treasury had returned the rates to the 2018 level. And because of the change, the district has announced it will delay agreeing its business plan at full council so it can look at alternative funding sources.
This means the plans, which were once delayed by the general election and then set to be discussed in January, will be deferred until an unknown date.
Cllr Susan Glossop, cabinet member for growth, said: “It was an ambition of the former Forest Heath District Council, which our new authority supports, to increase the social use of the town centre and grow the evening economy.
“This remains our vision and we have done everything that can be done, within our control, to build the business case. However in the past three months, new factors beyond our control have affected the business case and rather than risk it being rejected, we are deferring, to continue working on it.
“As a local authority, we have to balance our budget. We entered the initial stages of planning for the cinema on the basis that the return on our investment would cover our borrowing costs – and even contribute towards the valued services we deliver.
“Market testing clarified that developers would not lead on delivering the site, but that there was plenty of interest from operators once built. We stepped up to continue building the business case that would allow councillors to decide if the social return balanced the financial burden of being the developer.
“We have great confidence in Newmarket, as the new year will show, and it is a mark of our continuing commitment that we are taking the extra time needed to work on these new issues.”
Newmarket has been without a cinema for more than 40 years. An out-of-town cinema had been proposed for George Lambton Playing Fields, but in 2013 it was turned down.
Source: Government loan hike puts plans to build cinema in Newmarket at risk