Blank sections in £29 million Business Case document

EXCLUSIVE by EWAN LAMB

The written economic and financial appraisals of Scottish Borders Council's planned £29 million Innovation Park at Tweedbank are missing from the published version of the project's vital Business Case which will be used in a bid to secure funding for the ambitious venture.

A 70-page document was presented to the Edinburgh & South East Scotland City Region Deal Joint Committee which shows the council will need to borrow several millions of pounds to "cash flow" the Innovation Park. The plans are seen as a catalyst to attract new businesses to top class facilities in the central Borders.

But four out of five appendices to the report are not available for public scrutiny, having been submitted to the city deal committee separately. The missing sections cover the economic appraisal, the financial appraisal, the sensitivity analysis and the programme plan.

The Business Case states: "Property experts in Scottish Futures Trust and Scottish Enterprise (acting on behalf of the Scottish Government) have expressed their satisfaction with the programme’s plans, although they acknowledge that there is risk with the speculative development planned later in the programme."

Borders councillors recently agreed to spend almost £10 million to purchase the remaining land on the Lowood Estate, close to Tweedbank railway station. Estate land is to be used for a mixture of developments including industrial premises, office space and up to 400 new houses. A planning application for the Innovation Park - it will be developed in stages - is likely to be lodged this month.

The Scottish Borders is set to receive £15 million over 15 years from the much vaunted £600 million city deal, jointly funded by the UK and Scottish Governments. Critics have described the Borders share of the cake as a pittance compared to the amount being invested in the rest of the south-east region.

According to the Business Case for Tweedbank: "The expected benefits of the programme are anticipated to be in the region of £350 million of GVA and the creation of 383 jobs. Contributions from the Borders Railway Blueprint, Scottish Borders Council, the private sector, and Scottish Enterprise make up 48.3 per cent of the programme’s costs (£14.1 million).

"The current, depressed state of the office and industrial property market in the Scottish Borders requires the level of public sector investment planned under this programme. Such investment would supplement the £350m already spent on the Borders Railway. It would replace low value, obsolescent stock with high quality premises that will allow for a far more competitive business location. Recent  analyses by Ryden and Graham & Sibbald suggest that there is potential demand for the office and industrial space being proposed." 

The document says the assumption is that funding from the Scottish Government is payable on a variable basis over a 15-year period, requiring Scottish Borders Council to borrow to cash flow the project. The financial model shows that the overall borrowing requirement would peak at £4.5 million in 2024 and would be repaid in 2029.

Costs distribution for the £29.1 million project are – SBC £5 million; Scottish Enterprise £1.5 million; City Deal £15 million; Railway Blueprint £3.5 million; private sector £4 million.

The proposed Innovation Park with its potential to attract skilled jobs to assist the low paid Borders employment sector will, it is hoped, 'piggy-back' the reinstatement of the Borders Railway.

The Business Case states: "The economic potential of the Borders Railway has been boosted by overall passenger usage exceeding initial expectations with 22 per cent more passengers than predicted. 

"The number of passengers using Tweedbank Station is ten times the number predicted; at Galashiels, it is five times. The railway is helping to bring the attractiveness of living and working in the Scottish Borders to national attention. This programme will help to put Tweedbank Station at the heart of a sustainable, thriving, vibrant community rather than being simply a “Park and Ride” facility for commuters and visitors. At present, most commuters using the railway travel north to Edinburgh. The programme can help to reverse this trend through creating good employment opportunities."