Delays to The Forum in Gloucester cost taxpayer nearly £0.5m
Delays to Gloucester's flagship The Forum development, the eye-catching new office, retail and leisure space near King's Square, have costs the taxpayer £450,000 so far.
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Delays to Gloucester’s flagship redevelopment project The Forum has so far cost taxpayers around £450,000 in lost income.
The King’s Quarter development has been hailed as reshaping the city centre and is key to turning the area into a vibrant part of Gloucester.
The £107m project encompasses 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.
The Forum is expected to increase footfall in the city centre and attract more than a thousand people to King’s Quarter and create fresh prospects for local enterprises.
However, the Gloucester City Council project, which is nearing completion, has faced several setbacks during its construction.
And city chiefs revealed this week that these delays have contributed to a shortfall of £3.6m in expected income from the site.
However, this has been offset by a reduced revenue interest cost of £3.15m which will be capitalised and spread over the 40 to 50 year amortisation period to be covered by future income receipts.
Councillor Andrew Gravells (C, Abbeydale) asked if the overrun on the completion for The Forum had impacted the council’s budget.
“The anticipated income is less than was expected and that the shortfall will be covered by additional borrowing, which will be capitalised,” he asked in a written question to cabinet.
“What does the shortfall in income come to please?”
Resources and assets cabinet member Declan Wilson (LD, Hucclecote) said in response that this year’s budget was based on the expectation that most of The Forum would be practically completed in the early part of the first four months of the financial year.
“Accordingly the estimated additional income from the property and the car park was included in the budget at £4m,” he said.
“In accordance with standard accounting practice the interest charges on the construction project up until completion are capitalised into the cost of the buildings to be spread over the estimated useful life of the building, similar to the asset depreciation charges that occur.
“The estimated useful economic life of the building has yet to be finalised but would typically be 40 to 50 years for buildings.
“Once the buildings are completed and leased out, the interest charges can no longer be capitalised and become a charge to the revenue account to match against the income receipts.
“Similar to the expected income the budget for 2025-26 included the estimated additional interest cost of the properties at £3.5m.
“The delays in completion of the properties has led to the forecast income not having been received, but at the same time has meant that the expected revenue costs in relation to interest have not been incurred as the interest continues to be capitalised.
“The income forecast for The Forum for 2025-26 included in the 4 months to July 2025 report presented to [the overview and scrutiny committee] was £0.4m, leaving a delayed income of £3.6m.
“As noted above this translates to a reduced revenue interest cost of £3.15m that will be capitalised and spread over a future 40 to 50 year amortisation period to be covered by future income receipts.”
By Carmelo Garcia, local democracy reporter for Gloucestershire. carmelo.garcia@reachplc.com