Members considered a financial update on the Stafferton Way Link Road project. The Lead Member highlighted the fantastic benefit of the new link road to residents; unfortunately the cost had increased by £1.25m. Members noted the four areas of overspend as detailed in the appendix. He highlighted that the cost of a right hand turn had been agreed by members at £50,000. If Members had been aware of the additional (unauthorised) expenditure of £125,000 on this aspect, it was unlikely it would have been approved.

Members noted how the additional costs would be covered:

·        £445,000 from underspends in the Operations and Customer Services capital programme for 2015/16. The Lead Member confirmed that this would not result in the reduction in scope or cancellation of any other capital projects.

·        £125,000 from an underspend on the LED lighting project

·        £680,000 would be added to the capital programme for 2015/16.

A number of lessons had been learnt including timely reporting of financial information, understanding trade offs, and full involvement of Members, officers and consultants in the decision making process.

The Principal Member for Transformation and Performance commented that there had been a failure of process but he was pleased that quality standards had been met. He would be bringing forward a report in July 2016 which would put in place a comprehensive, scalable and mandated project management methodology for the borough.

Councillor Jones welcomed the review of processes. She asked for assurance that the allocation of £680,000 would not affect anything else. The Lead Member responded that the LED lighting project may end up costing less than anticipated and therefore may deal with the overspend in totality. If it did not, it would bring forward the likelihood that the council would increase borrowings. However the council had significant assets which would be realised over time and in due course he hoped borrowing would then reduce.

Councillor Beer asked whether the investigation had yet concluded and if a surcharge was applicable. He also questioned the inclusion of a weight limit which could reduce the effectiveness of the scheme. The Strategic Director confirmed that the investigation was likely to conclude in the following two weeks. The Chairman highlighted that he had already offered to go through the investigation with Opposition Members. The Lead Member for Customer and Business Services commented that residents of Oldfield Road had been concerned about large vehicles, therefore the weight limit kept them on the A4 other than for delivery and access.

It was noted that the figure in Table 5 ‘Deduct approved budget increase’ should read £132,000 rather than £192,000.

The Principal Member for Transformation and Policy agreed to send Councillor Beer a copy of the draft project management methodology.

RESOLVED UNANIMOUSLY: That Cabinet:

i.          Approves allocation of the underspend in the Operations and Customer Services Capital programme 2015/16 amounting to £445k to the Stafferton Way Link Road project

ii.         Notes the request to Council on 26 April 2016 to increase the approved Operations and Customer Services capital programme 2015/16 by £680k

iii.           Reallocates savings of £125k from the approved budget for the LED Street Lighting capital project to Stafferton Way Link Road