Controversial - how the Alumno development in Colchester could look

* Former Colchester Labour Party chairman Alan Short has reservations about the development.

AT the last council meeting, the Alumno development was raised again and portfolio holder Dave King supported the claim it will bring much to Colchester.

The first claim is that it will bring in £40million of investment.

However, many of the materials in the development will not be made in Colchester.

The prefabricated units for the student cells are likely to be made outside the UK and the hotel building and fittings prefabricated elsewhere.

The key, skilled jobs will be taken by those who move from one such development to the next.

There may be one-off benefits to the town as some of these workers will stay in Colchester.

However, the other jobs are likely to be low-skilled, on zero hours contracts or fake self-employed.

The cabinet accepts the Alumno annual benefits of £4.8million.

I have done my own calculations based on public information, though.

Students leave university with debts of about £50,000, including £30,000 in fees.

Alumno rents will be £500 per month for nine months, giving £4,500 per annum. Students spend 55 per cent of their living expenses on rent.

This will leave £3,500 to feed them and other expenditure, based on them going home for Christmas and Easter and only spending 32 weeks in Colchester.

This gives £109 per week, say £125 to be generous. The number of units is 336. Multiply this by £125 and you get £1.35million - far from the £2.4million quoted by Alumno.

This is assuming they will be full, but there will be competition from the Magdalen Street facility and local student houses of multiple occupation which provides things like parking and cheaper rent, and the university-managed accommodation.

Alumno talked about 40 full-time equivalent jobs. Assuming £10 per hour for a 40-hour week, this gives £400 per week and for 52 weeks per annum it gives a total of £832,000.

Employees will pay NI and tax, earning £20,800 per annum.

Say the students spend 75 per cent of their net disposable income in town.

That would be about £1-million, before paying the 40 full-time equivalent jobs, less ten per cent from NI etc. This gives £1.7million.

That leaves £3.1million of the stated Alumno total of £4.8million coming from hotel guests, with room rents going to Travel Lodge.

Assuming 360 nights are fully booked, this gives £86,000 per night so guests will have to spend £100 per night in town.

The occupation rate is likely to be 66 per cent so the local spend is £130 per night. This isn’t realistic.

The Alumno figure of £4.8-million is a gross overestimate.

A study of independent student accommodation and budget hotels from Travel Lodge would have been prudent before the cabinet went “all in” on the plans.

The Travel Lodge hotels business plan for less than 100 rooms is to use most rooms for council-funded homeless families on B&B. Their spending is low.

Most of this is academic as neither the student flats nor the cheap hotel are likely to attract more people to Colchester.

There is no shortage of such accommodation in the town.

Students will still come and spend their money in and around the area and there is no shortage of hotel accommodation for visitors.

What we need is to develop our historic and cultural assets to attract more visitors.

Forget planning issues. The key point is the council decision to give Alumno a 250-year lease, plus loads of help to get rid of inconvenient rights of way and a binding covenant with Essex County Council.

Alumno is the third company the council have given most favoured nation status to after the two previous ones backed out.

Even if we had to wait another five or ten years for the investment, we should have found a better, more viable and long-term money generation plan than this one.