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Aug 2022

Last Updated: 26/08/2022

Politics

County council 'monitoring' major projects amid soaring inflation

by Calvin Robinson

| 28 Aug, 2022

Could construction of the Otley Road cycle path and Station Gateway projects in Harrogate be affected by soaring inflation?

North Yorkshire County Council officials have said they are monitoring the cost of major projects amid soaring inflation levels.

The council was this week forced to plug a £7.2 million shortfall for its Kex Gill realignment after the overall cost of the scheme soared due to inflation.

The project is now set to cost £68.6 million - a 12% hike from its original figure.

The Stray Ferret asked the county council whether it now expected to find more funding for other projects, such as the £11.2 million Harrogate Station Gateway scheme and the second phase of the Otley Road cycle route.

Gary Fielding, director of strategic resources at the council, said:

“We can’t speculate about future inflation rates and global and national impacts on the economy, but like other organisations and businesses we continue to monitor costs and market conditions when embarking on projects.

“At present inflation is a pressure across the board and North Yorkshire County Council will continue to work to mitigate the impact it has."

Mr Fielding this week warned senior councillors that the authority faced “high risks” as the cost of projects, such as Kex Gill, increased in price.

He told councillors that the “burden of risk” would fall on the council should any “unforeseen events” see additional cost for schemes.

This additional cost would come at a time when government funding is either being cut or capped.

Mr Fielding said:

“In terms of capital, you are seeing two things happening in general and I think it is right that members are aware of the risks.

“We have got allocations in government funding across the board actually reducing in quantum for the forthcoming period and in parallel with that we have got inflation rates taking off.

“So what you have actually got is a much reduced spending power going forward and a higher profile of risk based upon major schemes where the burden of risk will fall 100% with the council.”

Otley Road and Station Gateway

The comments come as the county council looks to press ahead with some of its major highways schemes.

The authority is due to procure a contractor for the second phase of the Otley Road cycle route this month.

The cost for the first phase of the scheme was £827,000.

Kex Gill realignment cost increases to £68m

Delayed A59 Kex Gill reroute now set to start next year and finish in 2025

However, soaring inflation could see the figure for the second phase be higher than anticipated.

Melissa Burnham, highway area manager at the county council, told the Stray Ferret last month:

“Final detailed designs for phase two of the Otley Road cycle route are due to be approved within the next few weeks, with the contract expected to go out to tender during August.

“It is expected the contract will be awarded to the successful provider during the autumn.”

Inflation and the cost of living crisis has also raised concern over Harrogate's Station Gateway project.

While the county council would not be drawn on any potential increases to the cost of the scheme, officials said previously that cheaper materials could be used.

Both county council and Harrogate Borough Council officials have remained committed to the scheme and recently pledged a further £300,000 to the project.

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County council 'monitoring' major projects amid soaring inflation

Otley Road and Station Gateway

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