Agenda item

RESOLVED: That the West Northamptonshire Council Cabinet: 

a)    Noted continued progress to deliver the Northampton North West Relief Road;

b)    Continued to support the capital investment required to complete this scheme as set out in Section 7.1 of this report and required to proceed to construction including forward funding against future S106 and Community Infrastructure Levy payments;

c)    Agreed that in light of not receiving Levelling Up Funding, under the urgency procedure, to commit £20 million to the project to make up the funding shortfall to enable the scheme to progress to site;

URGENCY;

Please note that part c) of the resolution constitutes an urgent decision outside the Budget and Policy Framework. The consent of the Chair of the Place Overview and Scrutiny Committee was sought and obtained in accordance with the requirements of the Budget and Policy Framework Procedure Rules. It was not practical or safe to convene a quorate meeting of the Council to take this decision in the timeframe. This was because there was a need to review the business case for the project in the light of the funding decision, which has caused delay.  The current procurement price will expire on 8th January 2021 and further delay will lead to increased costs.

REASONS RESOLVED:

(i)    The scheme was identified within the West Northamptonshire Joint Core Strategy as being required to support anticipated additional growth, much of which is already consented requiring the additional highway capacity the scheme provides to mitigate their impacts.

(ii)  Since 2016 the North West Relief Road had been an important planning consideration in the determination of a number of developments including Buckton Fields and the Strategic Urban Extension at Dallington Grange, with some of this development having since commenced. Should the North West Relief Road not proceed then this consented development may either not happen due to viability concerns or could take place without effective mitigation of the traffic impacts. Either scenario would have negative implications for the Authority and the local area.

(iii)As currently planned, the scheme offers the required traffic benefits to facilitate planned growth in the area. A reduced scheme would not offer the same traffic benefits in terms of reducing congestion and journey times and would result in a delay to delivery which will increase costs and result in the scheme facing an increased funding gap to deliver a project with a less beneficial business case.

ALTERNATIVE OPTIONS;

Option 1 – Do not proceed with the Scheme

·         Not proceeding with the scheme could impact on the viability of existing consented developments resulting in land not being developed or existing developments not being fully built out.

·         Alternatively, if consented developments continued to be built out then the traffic impact of allowing significant development whilst not building the North West Relief Road would be significant.

·         The future delivery of the Northampton Northern Orbital (currently proposed route options) would be compromised as these route options would require the North West Relief Road to connect to the highway network at its western end

·         £7.93 million of SEMLEP Growth Deal funding would be lost with possible reputational damage to the Authority with funding bodies

·         S106 and CIL money had been committed to the project. Depending on how these agreements were written the money may not be able to be spent on other projects and so some or all of this money could be lost to the Authority.

·         Existing capital expenditure to date of circa £6.5 million could have to be written off to the revenue account thereby creating a revenue pressure.

Option 2 – Redesign the Scheme to reduce costs

·         This would require significant redesign of the proposed scheme along with new traffic modelling to assess the impacts of removing the causeway as the current design would not connect to the Welford Road.

·         The redesign would require a new planning application based on the revised layout and modelling which we anticipate will show reduced benefits in terms of capacity and journey time improvements. The outcome of the planning application for a scheme with reduced benefits cannot be guaranteed.

·         The redesign and planning processes would delay works on site by at least two years with additional costs of undertaking this extra work as well as inflationary costs to the construction elements.

·         The current land negotiations would be void and the Authority would have to start again with some new landowners at the northern end. A new Compulsory Purchase Order will be necessary following a successful outcome to the revised planning process.

·         It is anticipated that the revised modelling would indicate that substantial capacity improvements would be required to the Welford Road, Brampton Lane junction and the existing Causeway due to traffic growth regardless of the new causeway being removed. 

·         As with Option 1, the £7.93 million Growth Deal funding administered by SEMLEP would be lost.

·         Whilst there is a predicted saving of £8.93 million by not constructing the causeway, this saving must be measured against the costs associated with the need to redesign the scheme, go back through the planning process, the improvements expected to be required to the existing Causeway and Brampton Lane / Welford Road junction, the loss of the Growth Deal funding and inflationary increases to construction costs over a minimum two year period of delay. The cost increases would outweigh any potential savings and result in a scheme which it is estimated would cost around £3 million  more to deliver overall whilst having a less  favourable business case due to reduced benefits. If the reduced scheme was to be delivered, in addition to costing £3 million more, the Authority would lose the current approved £7.93 million of Growth Deal funding meaning the Authority would therefore be required to borrow approximately £11 million more than at present to deliver a scheme which performs less favourably in traffic terms.

Option 3 – Continue with the scheme to proposed design and programme

·         Continuing with the scheme in accordance with the current design and programme would require the Authority to meet the funding shortfall by borrowing £20 million.

·                     This would enable the Authority to retain the SEMLEP Growth Deal funding of £7.93 million and the committed Section 106 and CIL monies.

·                     The project remains deliverable within the forecast budget cost of £54.533 million.

At the Chair’s invitation Councillor Phil Larratt presented the report, copies of which had been previously circulated. Cabinet was reminded that this was a legacy project with planning consent given in 2020. It was advised that this item would also come back to Cabinet at a later date.

Councillors made the following comments.

• It was queried whether the levelling up fund had made it past the gateway and whether there had been any feedback with regards a re-submission.
• As the bid had not been successful would the Council be reviewing its funding process.
• It was noted that the report could have been presented at the December 2021 Council meeting.
• Cabinet was reminded that the Flore bypass had been built in order to improve travel between Daventry and the M1 but was a single carriageway.
• It was felt that central Government should also fund part of this as they had requested the extra housing mentioned in the report.
• The report noted that there would be a limited effect on climate. It was felt that this could not be correct as any new road would contribute to pollution.
• It was queried whether the 10% contingency that was in place would be enough and whether this would be a fixed price contract?
• It was noted that there had been a significant increase in the overall costs as building materials had risen in price.
• What would happen should some of the houses not be built, would the Council need to request another loan?

Councillor Phil Larratt made the following comments.

• The Flore bypass would remain a single carriageway for now, but duelling in the future was an option as it had been built with that in mind.
• The concern for the environment was echoed, and work would go into looking for different construction methods to ensure the project would be as carbon efficient as possible.
• The contingency worries were understood.

The Executive Director of Place & Economy made the following comments.

• There had been no feedback at present about the levelling up fund.
• Members were advised that the strategy used to applying for funding was continuously under review.
• It was advised that the contract was a fixed price one with all risk being transferred to Balfour Beatty.
• The contract had taken inflation and the price of materials into consideration.
• It was advised that part of the road would also be built by the developers.
• The project would be continually monitored.