Historic England has raised more concerns over the planned redevelopment around the area next to the Royal Hotel in Ashby - suggesting there is a 'a considerable risk' that there may not be enough funds to complete it and re-open the Grade II** listed building.

Owners of the Royal - Oakland Hotels - have applied for planning permission to build 17 town houses off Station Road, with a view to restoring the hotel which has been closed for five years.

Now, Historic England, the organisation tasked with protecting the historic environment of England by preserving listed buildings, and advising central and local government, has responded to the recent Cushman & Wakefield Conservation Deficit Report.

The report, commissioned by North West Leicestershire District Council, highlighted a difference of opinion between the developer and Cushman & Wakefield on the viability of the scheme.

This is one of the concerns for Historic England, which has already opposed the plans.

Their latest assessment, issued earlier this week, says: "We have reviewed the additional viability information contained within the Cushman & Wakefield Conservation Deficit Report.

"It is important that, in determining this application your authority considers the following points which we have drawn from the Cushman & Wakefield report:

• The proposals show a very low profit margin which is thus very sensitive to increases in the borrowing rate or increases in costs across the scheme.

The houses are planned to be built around the Royal Hotel. Image: BHB Architects

• Section 8 of the report and the concluding points showing the conservation deficit (CD) of £730,000. This is concerning and whilst we agree with the report that this CD could be reduced by savings on costs etc, this is a significant risk. In addition, a 15 per cent target of profit on value in relation to the Town houses is, in our opinion, very low in the current market.

• The report references paragraph 202 and states that they are satisfied that this criteria is met i.e. that the Enabling Development will "secure the future conservation of a heritage asset". However, Historic England are not convinced that this can be categorically assumed on the basis of the costs provided.

• There remains at the beginning of the project, a significant conservation deficit which will mean that the proposed Enabling Development will not cover the costs. Whilst we agree that savings may be made in costs and likewise the sales figures for the town houses may be better than predicted there is no certainty. There is a risk that the figures could go the other way. We are concerned about the applicant obtaining funding for this scheme and urge your authority to ensure that there is robust evidence that the necessary funding is in place. · Your authority will need to be convinced that the scheme is viable in order to avoid the "second bite of the cherry" scenario.

• There is no further scope on the site to increase the density of the new build proposed, whilst the merits of the scheme rest entirely on securing the reuse of the Royal as a hotel, and not, for example, on conversion to apartments.

"Consequently, given the level of harm to multiple heritage assets, and that the viability of the scheme is considered to be marginal at best, we remain concerned that there is a considerable risk that the applicant may not have the funds to complete the proposed scheme and secure the comprehensive repair and viable reuse of the Grade II* listed Royal Hotel.

How the development would look from the Bath Grounds. Image: BHB

"Thus it will be essential for your authority to be satisfied on this front and have a robust legal agreement in place to ensure the enabling development is not delivered without the Royal being fully repaired and open for business as a hotel once again.

"We have provided your authority with some general advice on points to consider in drawing up such an agreement."

Historic England has also repeated its concerns regarding the scheme.

It says: "We have previously outlined that in our view, the proposed development would cause a high level of harm to the significance that the Royal Hotel derives from its setting.

"We identified that there would also be less than substantial harm to the Ashby Conservation Area and the significance that Rawdon Terrace and Ashby Castle derive from their setting.

The site is currently undergoing work in the first stage of restoring the hotel building. Photo: Ashby Nub News

"Our view remains unchanged in this regard and we refer you back to our letter of November 8, 2022 which describes the impact in more detail.

"The justification presented for the scheme is that this development is necessary to secure the comprehensive repair and re-use of the Royal as a hotel (its original use).

"This would enable its removal from the Historic England Heritage at Risk register and importantly provide a role for the Royal once again in Ashby de la Zouch as a focus for events, alongside visitor accommodation.

"This reflects the role of the Royal until relatively recently as a much loved place for local people to gather and enjoy all it had to offer.

"The application believes that the new build proposed here is the minimum necessary to secure this positive outcome for the Royal and the proposal is presented, and assessed, as a case of enabling development.

"Enabling development In light of the harm that this new development will cause to the significance that the Royal Hotel derives from its setting, if minded to consent this scheme, your authority must be satisfied that the scheme will deliver the repair and reuse of the Royal as promised and that you have adequately secured that outcome by way of robust legal agreements."

Simon Dawson, of Oakland Hotels, said earlier this month that work is underway to begin the restoration of the hotel - which is why much of the area is currently fenced off with warnings of demolition work visible from Station Road.