Financing of £6.3m for the Fleece Hotel revamp has been withdrawn and given to two other major Gloucester city centre developments.

The project ground to a halt last year after Cheltenham-based Dowdeswell Group's interest "fell away".

Gloucester City Council has now reallocated Levelling Up funding it won for the Fleece to The Forum and new University of Gloucestershire City Centre Campus.

It is another blow for the scheme which seeks to restore the collection of buildings, parts of which date back to the 12th Century and on Historic England's Heritage at Risk Register.

It has now been 12 years since the council signed off a planning concept statement for the "undiscovered jewel" in Westgate Street.

It was then earmarked for regeneration as part of the Cathedral Quarter High Street Heritage Action Zone (HAZ) project. 

In 2022 the council won Levelling-Up cash to bring the building back to life as a boutique hotel.

Dowdeswell was named as the firm that could make that happen and the council spent £40,000 tidying up the site . But detailed plans never emerged and the council began looking at other potential partners.

Last week it emerged the project still had no funding or masterplan after Liberal Democrat group leader Jeremy Hilton (LD, Kingsholm and Wotton) asked for an update on the Levelling Up funding for the project.

Conservative leader Richard Cook (C, Kingsway) said:" The initial Levelling Up grant fund allowance for the Fleece hotel was circa £6.3m

"This was due to be spent by March 31, 2024 and was based on the development of the site by Dowdeswell Group. As you know, that interest fell away in early 2023."

Cllr Cook said it became evident the council would not be able to secure a new partner and deliver project promises in time.

The council came to an agreement in the Autumn of 2023 with the Department for Levelling Up, Housing and Communities (DLUHC) that the money would be redistributed to University's new city centre campus in the former Debenhams and the Forge which is part of The Forum project .

Cllr Cook said: "We are now working with a new potential partner for the development of the Fleece Hotel and I hope to bring a recommendation on that to cabinet in March.

"The council will make a contribution to the development of the Fleece and will seek grant funding to further support its development."

The council has not signed a contract for the project and said the total cost will be dependant on the final scheme.

Cllr Hilton said the project was another failure of the council's leadership and added. "The partner has been dismissed and now we learn £6.3m of Government grants set aside for the Fleece Hotel has been stolen from the [project] and spent elsewhere," he said.

"Yet another failure of your administration, isn't it? Has the City MP been told?".

Cllr Cook replied: "Of course he knows."