The Director of Place, presented the report which was provided at the request by the Chair of the Committee in order to inform Members on the following specific matters relating to the A13 scheme:

·       A breakdown of costs and how the latest out turn forecast has been calculated,

·       Details of where the finance to meet any shortfall would come from,

·       A timeline of when issues had arisen in the programme resulting in an anticipated completion date of autumn/winter 2021

Members heard how the A13 widening scheme would, when completed provide a continuous three lane dual carriageway linking the M25 to the A1014 Manorway junction.  This continuous carriageway was to improve journey reliability, reduce queuing and congestion thereby improving the environment.It was observed how the project involved widening the A13 Stanford le Hope by-pass from 2 to 3 lanes in both directions, from the junction with the A128 (Orsett Cock roundabout) in the west to the A1014 (The Manorway) in the east and replacing four bridges.

The Director of Place explained that the consent for the project was granted by a Harbour Empowerment Order in 2008, with the Council taking on responsibility for the preliminary design in 2011. He continued by outlining the breakdown of costs within the report, which included, Construction, Statutory Undertakers, Preliminary Design, Contract Supervision, Detailed Design, Land Purchase, Technical Support and Risk Allowance. The Committee heard the original approved project budget was agreed at £78,866,586 in 2016, and these costs were based on a preliminary design.

It was highlighted the Council had recently undertaken a value for money (VfM) exercise on the project which had identified based on the current out turn forecast, the scheme still represented high VfM.  This meant an additional grant was made available by DfT to SELEP of £8.9m and the SELEP Accountability Board agreed to provide this funding to the A13.

Members were advised of the potential options available to bridge the forecast funding gap were currently being explored and had not yet been confirmed, however it was likely that a combination of funding sources would be required to meet the funding gap.

The third issue raised related to the diversion of utility apparatus.  It was explained Statutory Undertakers could only undertake activities to their apparatus at particular times of the year, usually when there is less demand on the system. 

The Chair of Committee thanked the Director for presenting the report and explained he would ask each member individually for questions and the questions to be asked in blocks.

He then started by stating the figure within the report of £115 million, was quite significant overspend and the new completion date of the end of 2021 was also a significant delay. He continued to ask if Officers could give a cast iron guarantee that the project would be completed at the end of 2021. The Chair then move onto his second question which he queried out of the three options available to the council to bridge of £27 million funding gap, which would be the preferred option, as far as he was concerned increasing taxes for residents, was not an option.

The Director of Place commented that that he could not give a cast iron guarantee that the budget and the timeline would not slip any further. However, he added that he was confident that officers had a strong grip on the project. Nevertheless, a cast-iron guarantee could not be given due to unseen obstacles which were out of the Council’s control, for example the impacts of Covid-19

The Corporate Director of Finance, Governance and Property thanked the Chair for his question and explained within the report that there are three main options in order to bridge the forecast funding gap and all three were being explored. He continued by stating that no option had yet been confirmed, and it was likely that a combination of the funding sources would be required to meet the funding gap.  The Corporate Director of Finance, Governance and Property advised members that using council resources such as capital receipts as funding would be a last resort.

The Vice-Chair addressed the committee echoing the Chairs concerns on the overspend of £27 million on the project, he further stated that he agreed there must be other ways to close the funding gap and not to increase taxes for residents.

Councillor Anderson commented that the crux of the issue for this project appear to be in 2016, as there were two contracts with two different companies. He asked whether there was an audit trail for the decision to split contracts within project. The Assistant Director of Lower Thames Crossing and Transport Infrastructure Projects explained there was an audit trail and in 2016 two Cabinet reports signed off the spilt contracts, these were taken in March 2016 and then December 2016.

Councillor Gerrish queried the overspend seeking a further breakdown of the £35 million overspend, which included the additional £8.9 million grant. The Assistant Director of Lower Thames Crossing and Transport Infrastructure Projects highlighted £33 million of the overspend and explained the breakdown in the following ways under the terms of the contract, compensation event for structures £12 million, drainage compensation event £9 million, utility diversion works £10 million plus additional costs relating to communications and water, there was also £1.8 million in inflation costs due to additional delay in commencing contract.

Councillor Gerrish continued to question the potential funding stream used if the Council was to go ahead and use the capital program to pay the funding gap for the project. The Corporate Director of Finance, Governance and Property explained that if the need to use capital resources arose, this would need to be identified within the 2021/2022 or 2022/2023 accounts.

Councillor Potter thanked officers for the report, and commented he had confidence in officers that they will do their best to ensure residents were not put upon to close the funding gap for the project.

RESOLVED:

That the Planning Transport Regeneration Overview and Scrutiny Committee noted and comments on the report content.