Blackpool's long-awaited project to redevelop the former Post Office into an Indigo Hotel has been awarded £8m from the Government's Levelling Up Fund

The long-awaited £26m scheme to restore the Grade II listed building on Abingdon Street into an Indigo Hotel had twice failed to win funding after being included in two previous bids by the council.

But as part of its Spring Budget, the Government has allocated just over £200m of unallocated funding to levelling up projects, which must be spend in 2023/24.

It means instead of beginning a new bidding process, it was decided to fund schemes which had just missed out last time round, with the Post Office project among 16 to secure grants.

A statement on the Department for Levelling Up, Housing and Communities website, says: “The department has therefore chosen to award funding to bids on the LUF round 2 shortlist because this contains a pipeline of rigorously assessed bids which have been judged as value for money and deliverable.”

Blackpool North and Cleveleys MP Paul Maynard said: “The Government has once again put its faith in Blackpool and the town’s regeneration vision.

“This funding unlocks another key scheme, one which builds on the town’s heritage and which will breath new life into an important town centre location.

“This announcement once again demonstrates the commitment the Government has made to levelling up in Blackpool and builds on the work already being delivered through the Towns Fund and Levelling Up Fund.

“It will help support private investment to drive Blackpool forward.”

Developer Ashall Projects has planning permission to convert the former Post Office into a 144-room boutique style hotel which would be part of the Hotel Indigo brand.

The scheme includes a four and five storey link extension with roof top terraces between the former Post Office and sorting office, a three storey rear extension to the former Post Office and internal and external alterations to both buildings.

Also proposed are terraced areas in the courtyard following the demolition of the existing fourth floor roof extension to the former sorting office.

The Post Office closed in 2007, with the sorting office moving to a new site in Bispham in 2015, and since then the building has fallen into disrepair.

Two previous bids for funding towards the project failed, including earlier this year when Blackpool received £40m towards creating a multiversity campus in the town centre.

Blackpool has also been allocated £40m towards relocating the court house to a site on Devonshire Road to make way for the £300m Blackpool Central leisure development.

The Indigo Hotel proposals were first revealed by Cheshire-based developers Ashall in July 2021.

At the time, director Mark Ashall said: “There’s a lot of work to do on this project, but we have the resources, knowledge and commitment.

“Instead of being neglected and in danger of becoming an eyesore, these buildings will enhance the town centre and provide the world’s first Indigo hotel of this type which will help attract all kinds of visitors to Blackpool.”