£90m Somerset bypass plan short of cash despite extra £12m

13/07/2023 | CHRIS AMES

North Somerset Council has agreed an extra £11.9m to help pay for a new bypass, but the cash injection still only fills half of a £24m funding gap caused by rising costs.

The new funding for the Banwell bypass was unanimously agreed at a full council meeting on Tuesday (11 July). The additional funding comes from a mixture of Community Infrastructure Levy, Section 106 monies and reallocated capital reserves.

The scheme is another example of new infrastructure with funding from Homes England’s Housing Infrastructure Fund (HIF) where rising construction costs have driven the cost of the scheme beyond the original funding envelope.

In April 2021, the council awarded Alun Griffiths Contracting Ltd an early contractor involvement contract to design and construct the bypass.

The authority said that despite setting aside £7.6m in the original budget to protect the scheme from changing construction costs, the four years since funding was initially secured from Homes England have seen ‘unprecedented’ price increases.

These have been linked to the COVID-19 pandemic, the war in Ukraine and Brexit.

A report to councillors sets out that ‘external factors, outside of the control of either the council or the project team’, have had a detrimental impact on the stage 2 construction target cost which has now increased to £60m, generating a total programme forecast of £90m; and a funding gap of approximately £23.9m.

The report adds that the council has submitted a request to Homes England for additional HIF funding for the remaining £12m shortfall, warning that ‘without a fully funded scheme it is not possible to move into the delivery and construction phase’.

It states: ‘The additional funding identified by the Council in this report will therefore only be used if the scheme is fully funded with support from Homes England and can be progressed. Lobbying of Government continues, in order to see if any other funding options might be available to the council.’

Council leader Mike Bell said: ‘Banwell bypass is a landmark project for us. In agreeing additional funding, we are demonstrating our continued commitment to delivering the project and the benefits it is set to bring to North Somerset. For every pound we spend, the completed scheme is expected to return £2.27 in value, making it a vital component in unlocking regional growth for our communities.

‘We are also continuing positive conversations with Homes England and are seeking further financial contribution from them, as well as working with contractors to ensure we are getting the best value for money before we begin construction.’

The scheme is also subject to a public inquiry into Compulsory Purchase Orders needed to build the bypass, which is expected to last until 28 July.

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