Economy and Regeneration Scrutiny Meeting: 25 May 2017 Committee STOCKPORT INTERCHANGE DEVELOPMENT AND STOCKPORT COLLEGE RELOCATION Report of the Corporate Director for Place Management & Regeneration 1. INTRODUCTION AND PURPOSE OF REPORT • To brief members on proposals currently being developed by Stockport Council, Transport for Greater Manchester (TfGM), Stockport and Trafford Colleges, and the Greater Manchester Combined Authority relating to the College Relocation and Transport Interchange projects • To recommend to the Cabinet that the College Relocation and Transport Interchange project be combined and approved as a single scheme showcasing the benefits of devolution that will deliver a state of the art college and brand new Interchange for Stockport residents in the very heart of the Town Centre. • To seek authority for officers to complete feasibility and viability works at risk in conjunction with the stakeholders listed above; to develop a planning application for a combined scheme; and to take such action as is necessary to deliver both a combined scheme. 2. BACKGROUND ITEM 2.1. The existing Stockport Bus Station dates from 1981 and requires significant redevelopment in order to support the strategic priority of enhancing the role of public transport in town centre connectivity. The site has a central riverside location and has the potential to play a major part in connecting the town centre’s retail core with the Rail Station and the commercial development at Stockport Exchange. As such, redevelopment of the site in line with the overall ambition for the town centre is a key regeneration priority. 2.2. The development of a modern further education facility has been a longstanding ambition of both Stockport College and the Council for several years. The acquisition of the St Thomas’ Hospital site in 2007 and subsequent redevelopment plans demonstrate the College’s ambition for a Town Centre facility for Stockport residents which will enable it to deliver enhanced modern employer and learner focussed educational outcomes in a future-proofed and forward looking environment, . The relocation of the college campus to a more central location in the town centre has a strong strategic fit with the Council’s town centre development AGENDA programme. 3. STOCKPORT INTERCHANGE 3.1. In 2014, the Government announced an allocation of £41.7m from the Greater Manchester Local Growth Fund award to redevelop the existing town centre bus station as a modern transport interchange to be delivered in the period between 2015 and 2020. The lead organisation for the project is TfGM working in collaboration with Stockport Council. 3.2. An outline of the Interchange scheme was reported to Environment & Economy Scrutiny Committee and Central Stockport Area Committee in November 2015. The outline scheme included provision for: the Interchange; improvements to links with the railway station; a new bridge across the river; enhanced public realm in Mersey Square; a cycle hub; and associated highway improvements. The approach also ensured that any future Metrolink / Tram Train connectivity to the Town Centre as set out in the Stockport Rail Strategy could be accommodated. 3.3. In 2016, the original Interchange design was reconsidered by TfGM, in conjunction with GM Combined Authority and Department for Transport, as part of a modified approach to the use of Local Growth Fund for transport interchanges which looked at options to use significant public investment in key transport nodes to drive forward housing delivery. This modified approach delayed progress on the original scheme during 2016 but also prompted a range of exploratory discussions regarding potential additional uses for the site in addition to a surface-level Interchange. 3.4. Following outline work by consultant architects and surveyors, the Council and TfGM have explored options to create a more aspirational development, and drive additional value from the site, through a partial overtopping and potential associated green space which would allow for development above the surface-level interchange. 3.5. TfGM is also interested in continuing to explore the potential for residential development on the site as part of an overall Greater Manchester approach to providing housing linked to interchange sites that has been reported to the Greater Manchester Combined Authority. 4. AREA BASED REVIEW AND COLLEGE RELOCATION 4.1. The Greater Manchester Area Based Review of Post-16 Education (ABR) carried out between September 2015 and July 2016 identified a range of proposals to ensure that GM has the appropriate range of educational provision which is linked clearly to needs and opportunities in the local economy. The ABR recommended a merger of Stockport College initially with Oldham and Tameside Colleges then subsequently with Trafford College. 4.2. The potential merger of Stockport and Trafford Colleges would require agreement between the two Colleges, the GM Combined Authority, and the FE Commissioner over the curriculum offer and the financial arrangements for the new merged organisation. The merger is likely only to be viable if there is a new College facility in Stockport. 4.3. Concurrent with the ABR, the College in 2016 sold its existing site to the Homes and Communities Agency subject to a leaseback to the College for 5 years. Underlying this transaction was the proposal within the 5 year leaseback term for the Council to find a new site for the College and to develop new fit-for-purpose premises in the Town Centre. The new Engineering block will remain in situ and was outside of the sale to the HCA. 4.4. A review of potentially available sites was undertaken by Carillion in 2016 side-by- side with a utilisation study of the existing site to inform the future space requirements. A shortlist of three locations was reached but the willingness of TfGM to consider development on, or adjacent to, interchange schemes across Greater Manchester provided the opportunity to explore the development of a new college facility above the Interchange in a pocket park approached directly from the A6. 5. FINANCIAL IMPLICATIONS AND RISKS 5.1. Combining the Interchange project with the project to build a new town centre College facility will present significant challenges. From a financial point of view, the Interchange project will be fully funded from the £41.7m Local Growth Deal allocation. In line with the agreed Growth Deal governance arrangements, any underspend on this scheme would be returned to a central contingency fund controlled by the GM Chief Executives, with the intention being that this fund can be utilised to provide further funding to Growth Deal schemes to meet any cost overruns as may be approved from time to time. These arrangements would therefore preclude any underspend on the Interchange scheme being utilised to fund this wider initiative. 5.2. The current and future financial capacity of Stockport College, and its consequent ability to afford a new facility, however, is considerably less certain. The details of the outline financial model are contained within Appendix One. Approval is not sought to approve this model at this stage and this would form part of a further request for approval in due course. 5.3. In the short-term the Council has agreed with the College and TfGM that it will provide funding for the feasibility and development work needed over the coming months in advance of working up a scheme design and planning application. This work will also look at any shared community services which can be incorporated into the site but it must be clear that these will need to prove their feasibility, viability and fundability apart from the rest of the scheme. It is anticipated that this work will cost no more than £0.5m and will be based on an agreement between the relevant parties that this amount will be rolled into the final capital cost to be repaid to the Council by the College. 5.4. The combination of these two complex projects will inevitably increase the risk to which the Council and its partners are exposed. The key issues to be managed are: Delivery at Pace – The timescales for the college to vacate its existing site mean that its new facility must be complete by late 2020. Equally, TfGM, in order for to adhere to the Local Growth Deal expenditure profiling agreed with Government, is required to deliver the Interchange scheme within a similar timescale. These are very challenging timescales to achieve, given the current status, and we therefore face considerable pressure over the remainder of this calendar year and beyond to ensure that we have the right skills and capacity in place to assess feasibility and viability, develop the concept design, work up a planning application, and procure contractors. Influence and Control - Ultimately TfGM, in conjunction with the Council, retain responsibility for delivering the Interchange while the future financial and operational viability of Stockport College is closely bound up with the GM Area Based Review and the potential merger with Trafford College. The extent to which the Council can control the approach taken by each stakeholder in a combined Interchange / College Relocation scheme is therefore comparatively limited. For that reason, a Memorandum of Understanding is being drafted by TfGM for approval of all partners. Financial – see Risks in Appendix One 6. NEXT STEPS 3.1 Subject to Member approval, the draft timescales to which the Council, the College, and TfGM are working are set out below: Action Start