By Carmelo Garcia – Local Democracy Reporter
Gloucester’s taxpayers will be paying more for the £107m The Forum than first planned due to higher interest rates.
The City Council’s flagship redevelopment project in King’s Quarter has been hailed as a success in reshaping the city centre.
It is seen as key to turning that part of Gloucester into a vibrant part of the city.
The landmark building will have 142,000 sq ft of cutting-edge office accommodation, a four-star hotel, flats and a 393-space multi-storey car park along with retail units once complete.
But it was revealed last year that the project had so far cost taxpayers around £450,000 in lost income.
And council chiefs revealed last week that the project is costing the taxpayer more in higher interest rates.
Gloucester City Council has decided to borrow short term to fund the project.
They say that as the Forum is still under construction they are able to absorb these financing costs and spread them over the life of the asset.
And once the building is complete they will decide on the best way to structure the borrowing.
Resources cabinet member Declan Wilson (LD, Hucclecote) said Public Works Loan Board (PWLB) interest rates, which are now around 5.5 per cent, were around 1.6 per cent when the project was first put forward.
“The big issue that is really affecting us is interest rates,” he said.
“I had a look at the original documents for The Forum that went before cabinet back in 2020.
“It was a redacted report but all the interest rate calculations assumed the PWLB interest rate would be about 1.66 per cent.
He said the interest rate now is around 5.5 per cent.
“That’s a huge difference. That’s a burden that we will have to take on as a council.”
Cllr Wilson also told the meeting that the accounting of commercial properties “wasn’t quite right”.
“We know we’ve got issues with some of the contracts we’ve signed,” he said.
“We need to sort those out as well. But that is going to be another pressure on the budget.
“At least now we know. We know what the facts are and will have to come up with plans to tackle that.”