DOUBTS have been cast about the future of Winchester’s biggest regeneration project after grant funding risks were raised.

Councillors met last week to discuss the £150million Station Approach scheme and the risk of having to repay up to £5m in grant funding if the scheme is not delivered on time.

As previously reported, the project will benefit from significant funding from the M3 Local Enterprise Partnership (LEP) to improve the public spaces.

However, under the terms of the grant, which has been approved subject to planning permission being granted before the end of October, the council would need to spend the money by March 2021, meaning those works would need to be done ahead of completing the central office development, which would be carried out by a developer.

The scheme, estimated to cost £159m, is yet to get planning approval, with a committee set to debate the application in either September or October.

If approved, it would aim to transform the area around the railway station, creating 140,000 square feet of Grade A office space, along with a further 17,000 sq ft of retail, cafe and restaurant space.

Civic chiefs estimate it will provide an £81million boost to the local economy and create 1,000 jobs.

Questioning officers and Councillor Kelsie Learney, cabinet member for housing and asset management, Cllr Kim Gottlieb said: “Is it really realistic to spend £5m on the site... which is going to be driven over for three years to build the offices. All that granite is going to be ruined.”

Strategic director Chas Bradfield reassured councillors there were ways to access the office site without driving over the public realm improvements, but the risk was also raised that once the council sells the land for development, the preferred method of delivering the project, it would lose control over the development.

Cllr Hugh Lumby, who is himself a property lawyer, also raised concerns about losing control of the building work.

He said: “We can’t require the purchaser to build the site,” adding there could be a scenario where the developer chooses not to build on the site, resulting in the LEP money have to be paid back.

Mr Bradfield said: “It is a risk to the council,” but added: “I think the LEP are very clear that they are supportive of the scheme.”

Cllr Caroline Horrill, who was leader of the council for large part of the scheme progress prior to May’s local elections, questioned whether the new administration would be “prepared to forgo the £5m”, to which Cllr Learney said: “It is an option right now that we are desperately trying to avoid.”

However, she added: “We are not going to sacrifice having a quality scheme. We must make sure that we get it right.”

Summarising their concerns, which also included the tightness of the timetable to carry out certain stages, councillors stressed that they welcomed the scheme, but did have reservations. Cllr Lumby said: “I do worry about the risk of having to repay [the LEP grant]. We can’t force the developer to build and therefore we have a risk.”

Cllr Gottlieb added: “The risk is very real and it is very significant and I don’t think it is a risk we can mitigate.”

He did float the idea of holding off on the scheme until after the Brexit uncertainty had passed, but the committee heard soft market testing revealed there was interest in the scheme.

Following the meeting, Cllr Learney said: “We have been awarded a significant financial contribution from a national funding stream administered by the EM3 Local Enterprise Partnership to support this scheme – £1 million contribution to the scheme and £4m for improvements to the area in front of the Railway station.

“We and the LEP are bound by conditions, one of which is that the grant must be spent by March 2021. We will endeavour to meet that timetable, but that will not be at the expense of the quality of the development.”