Glastonbury multi-million pound regeneration projects axed

A council has terminated two multi-million pound government-funded regeneration projects after an audit of one highlighted concerns over governance and finances.

Somerset Council ended the Life Factory and Glastonbury Food and Regenerative Farming Centre projects, both Glastonbury Town Deal schemes, in November.

In a new report, the authority says it is seeking repayment of more than £2.4m in grant funding from Red Brick Building Centre Ltd, a community benefit society (CBS) that was the grant recipient of both projects.

In a statement, the Red Brick board said it “does not have the financial capacity to repay this sum”, and was “preparing for the very real possibility of insolvency”.

Glastonbury was one of more than 100 towns in the UK to receive investment from the government’s Town Fund scheme.

The Life Factory project was meant to see a derelict former factory block transformed into a community events space, offices and youth facilities.

But Somerset Council froze funds to the scheme in January 2024 after bosses said they were not “able to adequately reconcile invoices” included in grant claims with the actual spend and progress on site.

The authority commissioned an independent audit which found it had “no assurance” there was sound governance or financial controls in place at Red Brick Building Centre Ltd or Somerset Council.

It highlighted failings by Red Brick, the council and Beckery Construction Company Ltd, a subsidiary set up by Red Brick to deliver the project.

Somerset Council said it was seeking repayment of £2.29m paid to Red Brick.

It is also seeking the return of £115,715 from the Glastonbury Food and Regenerative Farming Centre.

Red Brick was in charge of delivering both projects, although the council said there were “no issues” with the food and farming centre.

The board for the CBS said: “Red Brick does not have the financial capacity to repay this sum. The Board is therefore preparing for the very real possibility of insolvency. An emergency independent financial assessment is currently under way.”

It said a “series of critical meetings” were ongoing at Somerset Council to decide the future of Red Brick.

The board said it was calling on the council to “act in the best interests of the community” and not enforce a full financial clawback.

It claimed it had a “fully-costed recovery plan, including an emergency funding package”.

The leadership team at Red Brick has changed substantially since financial concerns were first raised, and Beckery Construction Company was put into voluntary liquidation in early November.

About 26 creditors, some of which are local builders, are still waiting to be paid for work they claim to have done on the Life Factory building.

Somerset Council has published a report identifying 17 lessons learned from its role as the accountable body for the Life Factory project.

This came after auditor Grant Thornton made a statutory recommendation to the local authority.

The report said the council “took too long to suspend the project when it clearly had not met the fundamental conditions associated with the grant”.

It highlighted that the creation of a unitary authority “resulted in structural changes and a significant reduction in operational capacity at a critical point for [Glastonbury Town Deal] programme delivery”.

It revealed the council delivery team fell from 2.75 full-time equivalent staff members to one by November 2023.

Delivery was overseen by three interim managers during 2023–24 and the report cites “a loss of corporate memory and expertise, which contributed to governance and oversight gaps”.

Somerset Council’s chief executive, Duncan Sharkey, said: “We recognise that there were failings in the past and we need to make improvements.

“We have already taken a wide range of actions, and we will continue to embed stronger controls and governance to ensure public funds are managed responsibly and future projects deliver maximum benefit for Somerset communities.”

Avon and Somerset Police said it was reviewing audit documents to establish whether there is any potential evidence of criminality that would warrant a formal criminal investigation to be carried out.

The Red Brick board added: “There have also been rumours circulating regarding financial impropriety. We can confirm that no staff, trustees, or directors of Red Brick have been approached about any investigation into this.”