Item 6 on the General Purposes Committee (GPC) agenda this week was the Integrated Resources and Performance Report for the year ending 31 Mar 18 and when you got to para 13.10 there was a sense of deja vu because it was about the Ely Southern Bypass overspend which we’d covered at the Economy & Environment Committee (E&ECom) last month. Click here for my post on that meeting.
It’s not news now that the Bypass is costing 40% more than had been forecast when financing was agreed. E&ECom had noted that and it was now up to GPC to allocate funding for it. All simple enough but the waters keep getting muddied.
The GPC papers attributed the increase in cost to several factors including ‘the requirement for the quickest possible delivery’. This is wrong and misleading. The increase in cost was due to environmental and engineering issues full stop. It’s the shortfall in funding which is due to ‘the requirement for the quickest possible delivery’. And this ‘requirement’ was the result of unwarranted, inappropriate and irresponsible pressure by councillors on officers. This was clearly spelt out in the papers to the E&ECom.
The result of this pressure was that the project was accelerated. The contract was awarded on the basis of a target price of £27.5 million. It was noted at the time that ‘this sum held no contingency and that additional funding would need to be sought to meet any increase in cost’. The project went forward with a benefit cost ratio (BCR) and a funding package based on this sum.
Now we have a bypass, and it’s a good one, but we’ve got a funding gap and it’s that gap which is the result of ‘the requirement for the quickest possible delivery’.
It has been suggested that this does not matter, it’s just a process issue and ‘the end justifies the means’. That’s wrong. The means are important because they are a part of the mechanism of democratic accountability and if you’ve got a project which you suddenly find is going to cost you 40% more than your first thought should be to stop and ask ‘is it still a good project?’. Money is a scarce resource and you need to make sure that it’s being spent wisely. With a 40% increase in cost the BCR is going to go down and maybe it’s not such a good deal any more.
The funding gap has now been filled. GPC voted to ‘approve additional prudential borrowing of £13million’ for this purpose. Now I would suggest that at the very least the councillors responsible for the pressure on officers for the ‘quickest possible delivery’ be identified, have their knuckles rapped and understand that such behaviour is incompatible with good governance.