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Jul 2020

Last Updated: 27/07/2020

Politics

£60m or £35m: What is the value of Harrogate Convention Centre to the district?

by Calvin Robinson

| 27 Jul, 2020

For years, Harrogate Convention Centre was publicly sold as a £60m benefit to the town. Now it has dropped to £35m.

Harrogate Convention Centre

For the past decade, Harrogate Borough Council has publicly sold the HCC as having an economic benefit to the town of around £60m.

Yet at a full council meeting in December last year that figure dropped to a value of £35 million.

This week councillors will take a step towards taking one of the biggest financial decisions in recent decades – £47 million worth of investment of taxpayers' money in the HCC in an effort to make it profitable.

The question is - what is the real value of the HCC to the local economy?

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The £60 million figure has been included in almost all local authority reports, including its annual report in 2019.

That figure has been based upon annual economic impact summaries carried out by the council and includes a range of assumptions, such as average visitor numbers, how much each individual spends and length of stay.

In its annual report in 2019, the council said:

“We are responding to the challenges of the changing nature of the conference industry by redeveloping the Harrogate Convention Centre site.

“The facility contributes around £55 million a year to the local economy and has an important role to play in the district.”

That was until December that year when council leader, Richard Cooper, was quoted at a full council meeting as saying the HCC is worth £35 million to the town.

Minutes from the meeting said:

“The leader reported on the performance for the last year and advised that the Visit Britain methodology was now being used to calculate the economic impact for the district.

“The number of conferences and exhibitions had remained the same and using the new methodology it was estimated that the HCC would drive approximately £35 million of economic impact for 2019/20.”

It brings into question how the council had previously reached a figure almost double that and whether it felt some pressure to justify continued investment.

And is that value just to Harrogate alone? There are those outside the town who argue that a huge amount of public money is spent on a centre that does not bring significant economic benefit to the wider district.

Convention Centre losses

In the last 12 financial years, the centre has reported a loss on eight occasions and seen its income drop from £7 million in 2008 to £4 million 10 years later.

As a subsidised economic driver for the town, the HCC relies on taxpayer money to be able to operate the way it does.

According to the council’s own statement of accounts, in the years where the HCC made a loss the total cost to the public purse was £5,793,606.

Meanwhile, council papers leaked to The Stray Ferret show that it reported a £710,000 cost for 2019/20.

Explaining the loss, the report said:

“This is largely attributed to the increasingly ageing facilities which are of a poorer quality and scale than HCC’s growing number of competitors (many of which have also been redeveloping in recent years).

“This in turn has led to a loss of market share and a fall in the number and scale of events.”

It paints a picture of an operating model that requires radical change in order to better serve its customers.

Years of indecision

Four years and four consultants on, the HCC and its future remains uncertain.

2016 - The Right Solution published a report into the future of the centre and listed recommendations including an arms length company. Paid £32,572.

2018 - IPW Consultancy is brought in to review market analysis of conferences and exhibition centres and

2018 - Property advisor Cushman and Wakefield was appointed by the council to come up with a business case for the site. Paid £137,550.

2018 - Group Ginger was also appointed to develop a masterplan of the redevelopment.

But a further £40,000 was granted in November 2019 to commission a consultant to look into a different option for the site following a change in leadership at the HCC.

The borough council appointed Cushman and Wakefield as the consultants for the plan.

The report said:

“The HCC redevelopment project poses significant commercial, reputational and financial risks to the council and in order that we are able to make sound recommendations for investment decisions, we are now seeking to commission further specialist advice to test and compare how the alternative, client-led option performs against the status quo position and the original project objectives.”

Now again in 2020 the borough council looks set to spend £1 million, most of which will be borrowed, to consult further on one set of design proposals.

Is there a different vision?

The decision going to the council offers only one vision - to keep the site as a convention centre. The only question put to councillors is how much money they want to spend on refurbishing it.

Could there be a different vision for the site that could provide a sustainable economic driver for Harrogate? That is not on the table.

The borough council it seems has put all of our eggs in one basket in the hope the centre will finally start to make a profit and bring more income to Harrogate.

EXCLUSIVE: Leaked report reveals dire financial state of Harrogate Convention Centre