Report to Cabinet

Wards: Riverside 19 December 2016

Kingston upon City Council – + Scheme European Regional Development Funding

Report of the City Planning Manager and City Major Projects and Infrastructure Manager

This report item is not exempt.

This is a Key Decision The matter is in the Forward Plan – Forward Plan reference 0068/16

1. Purpose of the Report and Summary

1.1 To provide an update on the River Hull + scheme – this is identified in the City Plan as the River Hull Inlet project.

1.2 For a decision to be made on accepting the £3.5million European Regional Development Funding for delivering the River Hull + project and entering into a Service Level Agreement with the Environment Agency as Delivery Partner on the scheme in order for implementation to commence.

1.3 The River Hull + project includes moving the Arctic Corsair from its existing berth to a dry dock at Dock Office Row/High Street, North End Shipyard. The movement of the ship is required to improve conveyancing issues on the river as the long term berthing of the ship has caused an accumulation of silt around the vessel, and to enable the construction of new flood defences.

1.4 Recent survey work and technical analysis has been undertaken on the Arctic Corsair. This shows that there is a requirement to urgently restore and dry dock her in order to ensure her long term survival. The Council is therefore currently seeking funding which, if successful, will include major refurbishment works to the Arctic Corsair before being moved to a permanent berth at the North End Shipyard.

1.5 To seek the allocation of funding for project management resource to deliver the scheme aligned with the priorities within other city centre flood defence and heritage projects. It is the intention that these resources will also manage the Heritage Action Zone project, if the bid to Historic is successful.

1.6 To identify the financial costs associated with undertaking works to the Author: Status: Date: 09/12/2016 Page 1 of 12 Arctic Corsair which cannot be funded by ERDF or Flood Defence Grant in Aid (FDGiA) money. A proportion of these funds would need to be underwritten from the Destination Hull capital programme if other funding bids are unsuccessful.

2. Recommendations

2.1 That the Council accept £3.5million European Regional Development Fund monies to deliver the River Hull + project.

2.2 That the City Major Projects & Infrastructure Manager in consultation with the Town Clerk and City Planning Manager be authorised to negotiate and complete a Service Level Agreement with the Environment Agency to deliver the River Hull + project.

2.3 That subject to satisfactory completion of the Service Level Agreement, the City MP&IM be authorised to incur grant-eligible expenditure according to the terms of the completed PA5 and PA6 ERDF funding agreements to enable delivery of the project.

2.4 That £65k for two years from March 2017 is committed from the Destination Hull capital programme to fund the appointment of a project manager to be based with the Major Projects and Infrastructure team to manage both the River Hull+ and Heritage Action Zone projects.

2.5 That £1m funding for preservation and essential repair of the Artic corsair alongside works to rebirth her in the dry dock from the Destination Hull capital programme be provisionally allocated as match funding to a national funding bid for the restoration of the Arctic Corsair in the event that funding bids are unsuccessful.

2.6 That the City Major Projects & Infrastructure Manager in consultation with the Town Clerk and City Property and Assets Manager and the portfolio holders for Neighbourhoods and Communities Including ICT and Emergency Planning and Portfolio Holder for Energy City be authorised to negotiate and agree detailed terms and conditions of the land deal and subsequently enter into such legal agreements as are necessary to acquire the current Whitakers Docks as the preferred site for the relocation of the Arctic Corsair and its subsequent management as a visitor attraction.

3. Reasons for Recommendations

3.1 £3.5 million European Regional Development Funding has been approved for the project which will contribute towards reducing the risk of flooding to 63,627 properties and help start regeneration in the River Hull corridor. The relevant framework of delegations and resources are needed to be put in place to deliver this programme.

3.2 The scheme requires the relocation of the Arctic Corsair. Following detailed investigations and survey work the best option for this relocation

Author: Status: Date: 09/12/2016 Page 2 of 12 is the current Whitakers Docks. Relevant decisions need to be in place to progress the lease of this site. The whole scheme is currently predicated on a successful external funding bid, if this bid is unsuccessful the relevant delegations and decisions are required in order that we can ensure the ERDF and flood mitigation works can be completed.

4. Impact on other Executive Committees (including Area Committees)

4.1 The River Hull + scheme is included in the City Plan and the concept of the scheme has been discussed over the last two years at the Energy and Infrastructure Overview and Scrutiny Committee. Local ward members have been consulted during scheme development.

5. Background

5.1 Along with the Albert Dock Flood Alleviation Scheme, which is now complete, the River Hull + was a project originally included in the City Plan to reduce the risk of flooding.

5.2 The existing flood defences throughout the city are in poor condition with a 58% annual chance of failure based on current condition. 63,627 properties are at risk should the defences breach or overtop. The existing defences consist of a variety of walls, buildings, embankments and sheet piling and the Council has no power to require them to be built or maintained in excess of a height specified in the Act 1984.There are no local statutory requirements as to their quality or consistency .

5.3 The Environment Agency has secured £37million Flood Defence Grant in Author: Status: Date: 09/12/2016 Page 3 of 12 Aid (FDGiA) to improve the flood defences and provide a consistent standard of protection from flooding along the river corridor. The FDGiA is eligible for spending only on flood defence works. For any enhancements required or a change in the line of defences, additional funding would be required.

5.4 The funding policy for flood schemes is Partnership Funding. This relies on 15% contributions from either private or other public sector sources to secure the FDGiA. The successful ERDF bid along with a bid for Local Growth Funding would provide this 15% contribution, reducing pressure on to plug the funding gap.

5.5 The River Hull+ scheme also provides additional enhancements including changing the line of the defences at Dock Office Row/High Street to provide an improved riverside environment and facilitate regeneration in a much needed area. The scheme was initially promoted for Local Growth Funding (LGF) in 2014. It was unsuccessful and at a Cllrs meeting with the Portfolio holders for Visitor Destination, Neighbourhoods and Communities and Energy City in 2015 it was agreed that the scheme could be incorporated into the Repurposing the Old Town LGF bid. When the ERDF requests for bids were launched, it was apparent that the River Hull + was a better match for this source of funding.

5.6 The Arctic Corsair is the sole survivor of Hull's distant-water sidewinder fleet. It is on the National Historic Ships Register (No. 628), and an application is pending to have her added to the Historic Fleet. Built in 1960, the Arctic Corsair broke the world record for the landing of cod and haddock from the White Sea in 1973, and was active during the Cod War. She is currently moored on the River Hull in a tidal berth and is kept as a visitor attraction, operated and maintained by volunteers in partnership with the Council. The Arctic Corsair is highly regarded as the symbol of the city's connection with the fishing trade and its connected way of life.

5.7 The Arctic Corsair is particularly vulnerable. A conservation management and maintenance statement prepared in 2013 found that, 'at the current level of management and maintenance it is highly probable that in the next five to ten years the vessel will deteriorate beyond reasonable economic repair.' A 2016 study confirms that further rain-water ingress will continue to degrade the vessel, fittings and fixtures, if not treated or repaired. The current tidal influx at the present berth creates a constant state of environmental change, which increases maintenance costs. The Arctic Corsair needs to be placed in a static dry-berth in order to ensure her long-term survival and to allow for regular maintenance to be carried out. A funding bid is being prepared to preserve and reinterpret her, the work encompassed within the ERDF scheme allowing a permanent solution to be found to dry dock her while taking advantage of further match funding to reduce costs.

Author: Status: Date: 09/12/2016 Page 4 of 12 5.8 To the northeast of the Hull’s Maritime Museum, at the former mouth of the Queen's Dock (now the Queen's Gardens), is the North End Shipyard, which was in use from the late 18th century to the 1980s. The Central Dry Dock was the original lock-pit for access into the Queen's Dock, with 2 later docks to either side. The HMS Bounty was built here. Today the Shipyard is a largely derelict expanse of land with 3 silted up dry-docks and the remains of the last 'Scotch' derrick crane in the Old Town. The dry-docks at the Shipyard are locally listed, and are within the Old Town Conservation Area. The Dock was identified by the Environment Agency who initially approached the owners as a potential site to hold the Artic Corsair. Extensive work has been undertaken by specialist marine engineers to look at other possible locations at the Mouth and Princes Dock side, both proved unviable both financially and physically.

6. Issues for Consideration

6.1 The relevant calls for ERDF were for promoting climate change adaption, risk prevention and management and preserving and protecting the environment. The bid incorporates reducing the risk of flooding by improving the conveyance of flows achieved partially through the relocation of the Arctic Corsair and contributing to the funding for flood defence works with connectivity to the river front to provide amenity and recreational benefits.

6.2 The scheme will achieve the required outputs by; • Providing a proportion of the external funding contribution required to secure FDGiA. • Accelerating delivery of flood defence works at Tower Street to incorporate a riverfront walkway. • Repair lock gates and provide a flood defence at Dock Office Row/High Street (adjacent to the “Mutiny of the Bounty”) at the front of the site to enable use of the dry docks. • Move the Arctic Corsair from its existing location. This is for two purposes – it is currently causing conveyancing issues in the river channel and there is a requirement to move it to enable access for improvement works to sheet piles to provide the new and enhanced flood infrastructure. The bid includes moving the ship to the restored dry dock which was the former entrance to Queens Dock Basin. The dock is the closest and cheapest option for relocating at present. Note, it could not include for the cost of its restoration as this did not fit with the bid criteria. • The provision of 10 fishing platforms. • Interpretation boards and way markers alongside the river from to Dock Office Row. • Installation of timber lattices and planting along the replacement sheet pile walls to improve the visual appearance of the river and create habitat for redshank, turnstone and mallard.

Author: Status: Date: 09/12/2016 Page 5 of 12 6.3 The scheme is also critical to support the opening up of housing sites on the west bank of the River Hull as detailed in the Local Plan (Dock Office Row).

6.4 An initial MoU between the landowners and the Council is in place which sets out the general principles and broad areas of co-operation of how both parties can achieve their mutually compatible aims. This provides for the necessary flood defence works to take place and for part of the docks and land to be utilised as a visitor attraction with the Arctic Corsair in a dry berth subject to a long lease with a peppercorn ground rent. .It provides for the usual maintenance and site access with a permissive path to the River Hull bank side.

6.5 The proposal is for the Environment Agency to deliver the River Hull + scheme as part of the River Hull Defences, using their OJEU-procured contractor BAM. The contractor has been appointed and has been involved in pulling together the bid information and the costs. As a Delivery Partner a Service Level Agreement is required between Hull City Council and the Environment Agency. A Hull City Council Project Manager is required to ensure effective delivery of the scheme and to co-ordinate this with other ambitions within the City Plan.

6.6 As part of a separate process the Council, working with partners, has submitted a Heritage Action Zone bid to Historic England to cover the Old Town and the Fruit Market, including the River Hull corridor. Current indications are that this is a strong bid, it is therefore the intention for this project management resource to cover both projects.

7. Options and Risk Assessment

7.1 Option 1: Provide authority to begin the delivery of the European Regional Development Funding and contract with the Environment Agency as Delivery Partner to deliver the River Hull + scheme, including commitment to moving the Arctic Corsair to dry dock. a) Allocating £65k per annum for two years from the Visitor Destination capital programme to cover the project management costs; and b) Allocating a provisional £0.96m for the Artic Corsair, the latter to be provisionally allocated from the Yorkshires Maritime City line of the Destination Hull capital programme, in the event that the national bid is unsuccessful and other funding cannot be obtained.

7.2 The advantages with this are that it is delivering a scheme within the City Plan to celebrate the city’s heritage as part of Destination Hull. It is providing the required contribution for securing investment in the flood infrastructure. It is providing a safe environment in a dry dock for the Arctic Corsair whilst the required flood works are undertaken and a future visitor attraction should the other funding bids be successful.

Author: Status: Date: 09/12/2016 Page 6 of 12 7.3 The disadvantages are that by moving the Arctic Corsair without other funding, the cost of required repairs may increase, a very much reduced visitor offer can be provided set against the current offer and if the other funding bids are not successful further funding to secure the future of the Arctic Corsair would need to be committed from elsewhere. An additional resource of a project manager is required to deliver this project in partnership with the Environment Agency and any subsequent funding bids. 7.4 Option 2: Reject the offer and wait until the alternative funding bids are concluded.

7.5 Due to the flood risk implications the Arctic Corsair cannot be returned to its existing location once improvement works on the sheet piles are complete; the Council would need to find an alternative solution alongside stabilisation costs for the Artic Corsair if the other bid is unsuccessful. Match funding will also need to be secured to secure FDGiA for the next stages of the River Hull flood defences, putting at risk the delivery of these improvements. In particular this would lead to delays in delivery to enable an appropriate standard to be provided and an opportunity will have been missed to regenerate the River Hull corridor. In addition the Council could be at risk of losing up to £3.5million of ERDF.

8. Risk Assessment

8.1 DCLG have approved in principle the River Hull + scheme subject to pre-contract conditions and a Service Level Agreement being entered into by Hull City Council and the Environment Agency.

8.2 As with all EU funding there is a risk of clawback if the rules and regulations are not complied with. Measures have been put in place to mitigate this risk, such as attending compliance workshops and working closely with the Humber Technical Assistance group to ensure that the scheme is delivered in line with requirements.

8.3 Council officers are currently working on a funding bid which includes repairs to the Arctic Corsair and providing the infrastructure such as an interpretation centre which is beyond the scope of the ERDF eligibility requirements.

8.4 For the purpose of the bid, detailed work has been commissioned to understand the costs of repair, restoration and interpretation. The Arctic Corsair full repair costs are estimated at £1.5m. The works to the shipyard and interpretation centre are estimated at £1.93m. With a further £0.26m interpretation/exhibition costs this total cost £3.69m is contained within the bid submission and provides for a full refurbishment of the ship and new build interpretation centre.

Author: Status: Date: 09/12/2016 Page 7 of 12 8.5 If the bid is unsuccessful there will be a set of minimum works required to enable the ship to be located and operated in the dock if clawback of ERDF funds are to be avoided. These costs were unknown at the time of the bid as progress on the bid had not commenced and they would not have been ERDF compliant in any event. 8.6 The minimum costs without full restoration of the ship and with a minimum facility onsite would be £0.96m, if this is carried out at the same time as the other ERDF works. This would not restore the vessel itself nor improve the interpretation. The Corsair exhibition space at Streetlife Museum would have to remain in situ. The risks are that when the ship can be fully restored there will be considerable additional costs involved in moving the ship out of the dock to a place of repair which cannot be quantified at this time. It may also put the Council in breach of its statutory duties as navigation authority.

8.7 1. There is a risk in the above scenario if the £0.96m which is a minimum is not made available that Hull Culture and Leisure may not be able to operate the ship even as a reduced attraction at all without substantial further revenue resources.

8.8 2. Even if placed in a dry berth, The Arctic Corsair requires a properly funded planned maintenance programme to ensure it is preserved appropriately and if the Council is unsuccessful in it’s major funding bid further consideration should be given to the minimum works that could be carried out to assist the long term preservation of the ship.

8.9 The timescales for the funding bid mean that the River Hull + project would need to be completed prior to establishing whether or not the bid has been successful. The Arctic Corsair has to move anyway to enable the flood defences to be improved and cannot be returned permanently to its current location given the adverse impact this would have on the conveyancing of the River Hull. 8.10 Both the project itself alongside the ERDF contract management procedures are of a size, scale and complexity which will require a project management resource. If this resource is not in place it will increase the risk of the scheme not being delivered on time and within budget.

8.11 There is a key risk that the land deal for the dry docks falls through or changes in a way in which the scheme becomes undeliverable. Whilst we are on good terms with the landowner and a signed memorandum between both parties (referred to in section 6.4 above) we may need to seek CPO powers to mitigate this risk.

9. Consultation

Author: Status: Date: 09/12/2016 Page 8 of 12 9.1 The proposal has been discussed at the Energy and Infrastructure Overview and Scrutiny Committee and the River Hull Defences, which the scheme contributes towards, is included in the Environment Agency Hull Strategy, the River Hull Integrated Catchment Strategy, Hull City Council’s Local Flood Risk Management Strategy and the evidence base on infrastructure for the draft Local Plan, all of which have had the appropriate level of public consultation.

10. Comments of the Town Clerk (Monitoring Officer)

10.1 Acceptance of the proposed grant funding and applying the same to the delivery of the project through a Service Level Agreement with the Environment Agency is supported. It is noted that the Environment Agency is progressing a much wider scheme of works for the River Hull which the proposed scheme complements and enhances. Including the workscope within the Environment Agency’s contract is appropriate as it enables the appointed contractor to programme in those works as part of the overall project. The Environment Agency’s contractor has been procured through its framework contract in accordance with EU Procurement Law and accordingly the proposed arrangement is legally compliant and in accordance with grant funding conditions.

In the event of overspend on the additional scope of works included within the contract on behalf of the Council, this will be at the Council’s risk. It is noted that a 6% contingency has been provided to minimise the likelihood of this eventuality arising. Given the nature of the works to be undertaken this contingency is considered sufficient.

The provisional allocation of funds from capital toward the restoration of the Actic Corsair on a match funding basis is noted.

11. Comments of the Section 151 Officer

11.1 The s151 Officer supports the recommendations. The ERDF Grant provides funding for important flood mitigation works along the river, including the movement to dry dock of the Arctic Corsair, and the report refers to the need for additional spending to complete the restoration of the ship. The works to the ship form part of the planned Destination Hull - Maritime Museum project which is in development with the Heritage Lottery Fund, the match funding for which will be provided by the Council. As such the £130,000 of costs associated with the appointment of the required project manager for the River Hull plus scheme will be funded in the first instance from within the Council’s capital programme allocation relating to Destination Hull- Maritime Museum. If the HLF bid fails and the Museum project cannot progress as currently envisaged, the capital programme will require review and £1million of the match funding allocation will need to be re-assigned from the Museum project to meet the minimum costs of restoring the Arctic Corsair as detailed in this report.

12. Comments of HR City Manager and compliance with the Equality Duty Author: Status: Date: 09/12/2016 Page 9 of 12

12.1 In terms of staffing, project management is required for the work. There may be some groups with a protected characteristic that would benefit from having more robust flood defence. The work would be covered by CDM and therefore corporate health and safety need to be consulted.

13. Comments of Overview and Scrutiny

13.1 This report will be considered by the Energy and Infrastructure Overview and Scrutiny Commission, on Wednesday, 14 December, 2016. Any comments or recommendations agreed by the Commission will be tabled at Cabinet for consideration alongside the report. (Ref. Sc4077).

14. Comments of the Portfolio Holder for Neighbourhoods and Communities Including ICT and Emergency Planning

14.1 I'm fully support the River Hull+ project and even more so that we have EU funding agreed for this. Officers have worked very hard to get this developed and fit for purpose. If we don't move forward and agree this it will have a detrimental effect on the river and how it works.

15. Comments of Councillor Mancey, Portfolio Holder for Energy City

15.1 The City has a long tradition of effectively managing the risk of flooding. The River Hull+ project enable this to be done in a way which will also support the wider regeneration of the River Hull corridor. In particular a dry dock will be brought back into use which in turn should help support much needed city centre residential accommodation. The projects support the delivery of the ambitions of the city plan and local plan.

Alex Codd Assistant City Manager City Planning

Garry Taylor City Manager, Major Projects and Infrastructure

Contact Officer: Rachel Glossop - Flood Risk Planning Manager Telephone No.: 01482 612129

Officer Interests: None

Background Documents:

Author: Status: Date: 09/12/2016 Page 10 of 12 Implications Matrix

This section must be completed and you must ensure that you have fully considered all potential implications

This matrix provides a simple check list for the things you need to have considered within your report, if there are no implications please state

I have informed and sought advice from HR, Yes Legal, Finance, Overview and Scrutiny and the Climate Change Advisor and any other key stakeholders i.e. Portfolio Holder, relevant Ward Members etc prior to submitting this report for official comments I have considered whether this report Yes requests a decision that is outside the Budget and Policy Framework approved by Council Value for money considerations have been Yes accounted for within the report

The report is approved by the relevant City Yes Manager I have included any procurement/commercial Yes issues/implications within the report

I have considered the potential media interest Yes in this report and liaised with the Media Team to ensure that they are briefed to respond to media interest. I have included any equalities and diversity Yes implications within the report and where necessary I have completed an Equalities Impact Assessment and the outcomes are included within the report Any Health and Safety implications are Yes included within the report Any human rights implications are included Yes within the report I have included any community safety Yes implications and paid regard to Section 17 of the Crime and Disorder Act within the report I have liaised with the Climate Change Yes Advisor and any environmental and climate change issues/sustainability implications are included within the report

Author: Status: Date: 09/12/2016 Page 11 of 12 I have included information about how this Yes report contributes to the City Plan/ Area priorities within the report

Author: Status: Date: 09/12/2016 Page 12 of 12