Decision details

The Cabinet considered an exempt report of the Director of Environment and Transport which advised of the progress of the A511 Major Road Network.  As the project moved towards submission of the Full Business Case to the Department for Transport for final funding and subsequent construction, authorisation was sought to submit the Full Business Case and progress a series of pre-commencement activities that would help de-risk the construction stage of the project.  A copy of the report, marked ‘Agenda Item 14’, is filed with these minutes.

RESOLVED:

a)    That the Director of Environment and Transport and the Director of Corporate Resources, following consultation with the relevant Cabinet Lead Members, in accordance with the Council’s Constitution and with any necessary officer decision records being completed, be authorised, with reference to the proposed funding arrangementsand associated risks outlined in paragraphs 25-37, to undertake a series of pre-commencement works, which could include, but are not limited to:

i)               Advance diversion of Statutory Undertakers services;

ii)              Enabling works, including site clearance;

iii)            Advance purchase of land and property either by agreement with landowners where possible or by implementing the Leicestershire County Council (A511 Growth Corridor) Compulsory Purchase Order 2023 prior to approval of the Full Business Case (FBC);

b)    That the Director of Environment and Transport and the Director of Corporate Resources, following consultation with the relevant Cabinet Lead Members, be authorised to submit the FBC to the Department for Transport (DfT) provided that the outcome of the Contractor’s target cost price exercise demonstrates the A511 Major Road Network (MRN) scheme still represents value for money and remains within the overall funding envelope.

(KEY DECISION)

REASONS FOR DECISION

As part of scheme delivery, the project team regularly review risks and programme to identify opportunities to reduce risk of delays and cost escalations.  Building on lessons learned from multiple major projects delivered by the Local Highway Authority, a number of activities have been identified that would provide mitigation for potential risks associated with delay.  Where actions fall within the scope of the existing permissions and budget approval these are managed through the project governance.  However, the actions proposed in this report require additional funding for ‘at risk’ investment ahead of the final decision of the DfT’s on award of full MRN funding.

The proposed scheme will be funded from a combination of Section 106 funding and grant funding under the MRN fund administered by the DfT.  The full award MRN grant is subject to approval of the full business case.  The business case can only be submitted once a target price has been obtained from the contractor.  Whilst this work is underway, it will not be completed until June 2026 and in order to provide more certainty of the target price the advanced works have been identified.  Delivering these pre-commencement works now will ultimately help to de-risk the construction stage of the project and mitigate the risk of cost escalations occurring late in the delivery programme.

In order to fund the advanced works alongside the detailed design, surveys, planning and land acquisition, it will be necessary to draw together both existing DfT funding and available Section 106 in the current financial year (2025/26) and the next financial year ahead of the FBC.  It is necessary to draw down Section 106 and use a combination of grant funding in order to ensure that the proposed use of receipted Section 106 contributions falls within the scope and purposes of the relevant planning obligations secured through the Coalville Contribution Strategy (CCS).

In accordance with the DfT funding guidance, the County Council will be required to submit the FBC once the Contractor’s target price is known.  Whilst approval by the Cabinet to submit the FBC will achieve a key milestone in the programme, the final decision on progressing the scheme to construction will be sought from the Cabinet in Autumn 2026.

In the event the DfT rejects the FBC, the County Council is committed to continuing to deliver the A511 MRN improvements and these would be funded by additional Section 106 payments secured through the CCS.  In this scenario, as the scheme would not have the benefit of the £41.7m from the DfT, the improvements would need to be delivered over a longer timeframe and in phases as Section 106 is received.  The proposed advanced works would support the delivery of improvements in this scenario, albeit the benefits of the investment might not be realised for several years.