Council refuses to release breakdown of Coal Orchard losses

Taunton Deane Borough Council began work on the £16m project in August 2019, with 40 one- and two-bedroom flats and eight commercial units being created near the Brewhouse Theatre on the former site of the St. James swimming pool.

Delivery on the project was slowed first by the coronavirus pandemic and then by Midas Construction going into administration in January 2022, with Somerset West and Taunton Council steering the project to its conclusion in November 2022.

Councillor Diogo Rodrigues, who leads the Conservative opposition group on Somerset Council (which replaced the district council in April 2023) claimed at a public meeting on Wednesday (August 5) that the council had lost between £2.9m and £3.7m on the development.

The council has clarified that the actual loss is closer to £300,000 - but Mr Rodrigues' request for a detailed breakdown of sales within the development was rebuffed on the ground that it would take too long.

Commercial space within the Coal Orchard development (a.k.a. Riverside) in Taunton town centre, pictured in December 2022 (Image: Daniel Mumby)

Of the £16m spent on the Coal Orchard regeneration project (also known as 'Riverside), around £7.7m came from the sale of existing assets by Somerset West and Taunton Council and just over £3.9m came from external borrowing, according to figures released by the district council before its abolition.

A further £1.25m came from the government’s future high streets fund (not including grants earmarked for improvements to the Morrisons footbridge), on top of £870,000 from Homes England and more than £1.85m from other grants or under-spends in other budgets.

The final £420,000 was sourced from local housing developers via the community infrastructure levy (CIL), with much of this being spent on the public realm element, such as the steps down to the river.

Mr Rodrigues (who represents the Bridgwater East and Bawdrip division) raised the issue when Somerset Council's executive committee met in Taunton on Wednesday morning (August 5).

He said: "Late last year, the then-chief financial officer [Clive Heaphy] advised me that Coal Orchard disposals, made up of multiple packages over two financial years, generated receipts of £1,683,000 against a net book value of £5,389,000, resulting in an accounting loss of £3,706,000.

Councillor Diogo Rodrigues (Conservative, Bridgwater East and Bawdrip) (Image: Somerset Conservatives)

"However, in response to a question I asked in June, the relevant executive member [Councillor Mike Rigby] advised me that the saleable assets cost £9.2m and generated capital receipts of £6.3m - a loss of £2.9m. These figures do not correlate.

"Either way, it appears the Liberal Democrat administration has left taxpayers with a multi-million pound loss instead of the 'tidy profit' residents were promised in 2022 from this £16m development.

"We must have transparency on the actual loss this council has made on this development, particularly having received a best value notice from the government.

"Can the executive publish a schedule of every Coal Orchard disposal (including any disposals made as part of a package), showing the assets disposed of, the date of disposal, the cost, the net book value at the time of disposal, the sale price achieved and the resulting profit or loss on each disposal?"

The Ministry of Housing, Communities and Local Government (MHCLG) issued a best value notice to the council in mid-July - which essentially serves as a final warning for the authority to get its finances in order before any commissioners are sent in.

Councillor Mike Rigby, portfolio holder for economic development, planning and assets, said that the losses incurred on the project were much smaller - but said that officers had better things to do than to provide such a detailed breakdown.

Mr Rigby - who represents the Lydeard division, and served on the district council during the project - said: "The difference between the receipts from the disposals and the development costs leads us also to consider the value of the land that has not been sold and remains in council ownership.

"This land has been improved and developed as part of this scheme, and so has a cost and value associated with it, but it was never intended to be sold.

"This retained land was last valued at £2.6m and remains on the council's books and asset register.

"The response we provided after the question in June was that the difference between the cost of the development and the sales was £2.9m. Within that, the retained land makes up £2.6m, making a realised loss of £300,000.

Councillor Mike Rigby, portfolio holder for economic development, planning and assets (Image: Gideon Amos MP)

"While it would technically be possible to produce a schedule of all of the costs and disposals, this is a very considerable piece of work.

"While I'm sure it can be achieved, I frankly have more pressing issues for my property team to be getting on with, and I'm sure our new chief financial officer has more pressing things for her finance team to do as well."

Elizabeth Watkins was formally confirmed as the council's new chief financial officer at the July full council meeting in Bridgwater, and will be responsible for steering the council through to its next budget in February 2027.

Speaking after the meeting, Mr Rodrigues said he was "deeply disappointed" by Mr Rigby's response and that the public deserved to be provided with this detail, however time-consuming the process would be.

He said: "Whichever figures are used, they point to losses running into the millions rather than the return that was promised. That is exactly why the public deserves answers.

Commercial space within the Coal Orchard development (a.k.a. Riverside) in Taunton town centre, pictured in December 2022 (Image: Daniel Mumby)

"At a time when Somerset Council is subject to a government best value notice and received a one-star CIPFA rating - which described its financial management as "weak" - residents would reasonably expect greater openness.

"Taxpayers funded this development. They were promised a profit; instead, they got a loss and a refusal to provide the facts.

"It is little wonder that the government has lost patience with the council when accountability for millions of pounds of public money is regarded as less important than 'more pressing issues'."