Decision details

The Cabinet had before it a *report of the Head of Planning, Economy and Regeneration updating Cabinet on the infrastructure projects under the Housing Infrastructure Fund (HIF)totalling £18.2 million, in relation to which the Council had entered grant funding agreements with Homes England and had submitted the initial claims to draw down the first tranches of funding. The report also considered emerging financial considerations and sought instruction from Cabinet at this stage in the project, whilst identifying that there would be future key decision points for both projects.

The Cabinet Member for Planning and Economic Regeneration outlined the contents of the report explaining the status of both schemes as well as considering emerging issues including financial considerations. The risk assessment section recognised the importance of the successful delivery of both schemes, whilst acknowledging that there was increasing pressure on project finances and funding sources.

Work to deliver the projects of corporate significance continued in close liaison with Devon County Council as the delivery partner and with Homes England. There had been considerable progress, including the grant earlier this year of planning permission for the Cullompton relief road scheme and the associated relocation of Cullompton Cricket Club.

The risk profile and degree of financial exposure for the Council was being kept under review and further reporting would be required to inform options at key decision stages. Timescales for both projects remained tight and hence challenging, as did the requirements of the grant fund agreements in meeting milestones. However, efforts continued to be made to de-risk the projects through the early anticipation of problems and mitigating action. The pressure on project cost was significant. In terms of the Cullompton scheme, the Levelling Up Fund bid sought to overcome this issue. Next steps and options for that project would depend upon the outcome of that key grant fund application.

He continued by stating that emphasis must also continue on the delivery of the homes that the infrastructure would unlock, this being both the purpose of the HIF funding but also important to the delivery of the Council’s Local Plan, continuing to meet the Housing Delivery Test and in the recovery of the HIF funds via S106 agreements.

Consideration was given to:

·         Concerns with regard to financial exposure and the need to mitigate any risk.

·         A number of further decision points would be required with regard to funding for these projects.

·         The increase in the costs for the projects and the reasons why such increases were being reported – The Head of Planning, Economy and Regeneration stated that construction costs had increased, the costs for the relocation of the sports facilities and the land acquisition were now better understood and that Devon County Council had updated allowance for risk and contingency at 20%.

·         The history of the HIF funding, the original plans for early capacity improvements to J28 of the M5 which had been rethought to be achieved through the relief road, there were now concerns with regard to the amount of funding required to complete that project.

·         The additional funding required by S106 agreements.

·         The possible additional costs of the junction on the A361 and the need to wait for the tender process for this project to take place to confirm cost and that further reports would be considered by the Cabinet following the procurement process.

·         Whether the departure of the Head of Planning, Economy and Regeneration would impact on the schemes – the Chief Executive informed the meeting that interim arrangements were in place.

·         If the relief road was unviable, whether there was a Plan B or should the project revert to Junction 28?  The Head of Planning, Economy and Regeneration stated that the relief road would provide short term capacity improvements to the junction and would allow for environmental improvements in the town.  Further, more strategic improvements were still required to Junction 28 but those would be over a longer timescale.

·         Further concerns with regard to whether the Levelling Up funding would be provided and the need for the Cabinet to receive regular updates.

RESOLVED that officers be instructed to:

1. Tiverton HIF project-

i)             Continue to work with Devon County Council to deliver the project;

ii)            Bring a report back to Cabinet once the tendering process is complete in order to seek a formal decision (with Devon County Council) over whether the delivery contract be entered into.

2. Cullompton HIF project –

i)             Continue to work with Devon County Council to deliver the project;

ii)            Once the outcome of the Levelling Up Fund bid is known to seek further instruction from Cabinet by bringing another report considering the financial implications and options available.

(Proposed by Cllr R J Chesterton and seconded by Cllr B A Moore)

Reason for the decision – to continue to progress work towards strategic projects.

Note: *Report previously circulated and attached to the minutes.