Nottingham City Council has put forward a proposal to review its operation of Victoria Market to save estimated running costs amounting to £39m over the remaining 50 years of the current agreement.
The council leases the market space in the Victoria Centre and provides a significant annual subsidy. This is due to reduced income to cover the landlord’s service charge and other running costs for the Indoor Market. Any proposal relating to the market would have to be agreed by the owners of the Victoria Centre, represented by asset managers of the centre Global Mutual.
The council has seen its main Government grant fall from £127m to just £25m over the last decade, which along with rising demand for its support for vulnerable adults and children and other pressures, has squeezed its budgets. It has set out a four-year financial plan, including the disposal of property assets, which seeks to make £38m of savings to help place the council on a sustainable financial footing.
A range of alternative options for the future of the market include:
- Continuing with the current arrangement and paying the subsidy. The council currently does not have the financial resources to continue with this option
- Investing in the market infrastructure and requiring traders to pay full rent. This would also require a significant investment from the Council to make the market viable for the long term which the Council does not currently have the capital resources to deliver
- Another entity operating the market. This option is difficult to deliver as the lease is legally and financially onerous and it is unlikely to be taken on by a third party
- An indoor market being established at an alternative location operated by the City Council. Some work has been done to understand if this is deliverable, currently, there are no suitable buildings identified and would require a significant new funding strategy.
The options that have been considered are in the council’s view not viable either from a financial or legal perspective. Discussions have therefore taken place with the owner’s representatives around the principle of the council exiting the lease arrangement. However, before any final decision is made, the council is consulting with all stakeholders, customers and the wider public for their views on the future of the market and how it impacts them.
Any representations received as part of the six-week consultation will be given material consideration by the council in coming to a final decision. Consultation commences Monday 25 April.
As well as the significant cost of subsidising Victoria Market, the council estimates that substantial funding would need to be invested for immediate upgrades as well as longer-term improvements to help it operate effectively – meaning the total cost to keep the market running for the rest of the lease is forecast to be over £39m.
Victoria Market has been operating from its current site since 1971 and despite council investment in the market in recent years, it has not been performing well and is less than half occupied. In 2015, previous owners intu increased the service charges for the market up to the same level as other retail units in the shopping centre and it was also badly affected by the Covid pandemic, despite the council providing support to traders through Government grants to reduce and spread the cost of rent.
Acting Portfolio Holder, Cllr Linda Woodings, said: “In its heyday, Victoria Market was a busy, popular market but sadly although the small number of customers who still use it have great affection for it, it has been under-used for years.
“Increased service charges by the previous owners intu, bringing the market in-line with other retailers, meant the council has had to subsidise its operation for many years, turning it into a financial liability for us – a situation which was worsened by Covid severely impacting traders’ income. The sort of investment that would be needed is something we simply cannot afford when our budgets are being squeezed by other demands and reduced income from Government.”
Any proposed change to the current arrangements would require the co-operation of traders in addition to the owners of the shopping centre but any final decision on the future of the market would be subject to consideration of views gathered as part of the six-week consultation process.
You can engage with the consultation at: https://www.nottinghamcity.gov.uk/engage-nottingham-hub