To present an update on the programme delivery so  far, to highlight the elements of the project that have exceeded their forecast costs, and to set out the plan for delivery of the remaining projects in the programme.

This report will also detail the residual land acquisition costs and liabilities that will need to be met from the existing capital budget.

The cabinet member infrastructure and transport introduced the report. He commented that:

·        many elements of the scheme did not appear to have been appropriately thought out;

·        the way such projects were managed had now changed;

·        councillors had a responsibility to keep an eye on things and challenge officers;

·        the overspend on the project had been identified in 2017 and there should have been questions asked at that time as to how to deal with the situation.

The interim director for economy and place spoke to explain the history of the project. Cabinet members heard that:

• The overspend emerged in 2017;
• Using compulsory purchase orders was not an easy option and the process could be protracted;
• It was decided in 2017 to utilise some of the contingency funds within the budget to deal with the increased costs of land acquisition;
• In March 2021 further monies from the project envelope had to be allocated to deal with the land purchase costs
• The overspend meant that the remaining budget was insufficient to deliver the other elements;
• The council had made commitments to the Marches Local Enterprise Partnership (LEP) on the delivery of these projects;
• The report sought to draw a line under the previous governance and activity and move forward with the remainder of the programme as individual projects.

In discussion of the report cabinet members noted that:

• There should be sufficient funds in the budget for the design work on the transport hub to be carried out, and this would include public consultation;
• The design needed to be clever and need not involve a large amount of structure;
• The report had brought a lot of clarity to the situation but there was disappointment in the way the project had been managed previously;
• The remaining elements would have an impact on disabled people and those unable to use a car, it would also be a significant element in the council’s aspirations to address climate change.

The chief executive expressed concern about the way costs on the project had escalated, lack of governance and communications to residents on progress and performance. He stated that it was right to conduct an audit investigation and apologise for inaccurate information that had previously been shared with residents and councillors.

Group leaders and representatives were invited to make comments and ask questions on behalf of their groups. Key points were noted as:

• Investment was needed in other parts of the county, as well as in the city. Cabinet members highlighted in response that this programme had been inherited from the previous administration and was constrained by the commitments made in the funding bid to the LEP, but other projects sought to invest in all the market towns and rural communities;
• There had been failures to communicate the true state of affairs to councillors and reports produced in 2017 made no admission of the magnitude of the costs, it was suggested that if this had been raised at that time action would have been taken by the previous administration of the council;
• It was queried whether cabinet members had acted as quickly as possible to identify the problems. Cabinet members responded that they did not think they could have acted faster and noted that investigations took time to complete properly;
• The business case stated that the cycle path was always intended to be off road and it was contended that the project was needed and had realised benefits in greater connectivity for the railway station and access for development land;
• There was support for making the area around the railway station more attractive;
• There was no specific timescale for the audit but the auditors were ready to start and would complete the work as quickly as possible;
• Additional funding would be required to complete the remaining elements of the package. No funding sources had been ruled in or out at this stage;
• It was agreed that lessons must be learned so that the mistakes of this project were not repeated;
• In response to a query the cabinet member infrastructure and transport confirmed he had instructed officers to settle any compulsory purchase orders relating to the southern link road scheme at the earliest opportunity.

In discussing the recommendations set out in the report cabinet members requested that:

• the proposed audit of the programme expenditure include the LEP funded elements of the programme and what had been previously reported to the LEP;
• it be noted that changes in traffic routing had resulted in increased traffic in some routes;
• the audit report be written in such a way that it could be put into the public domain.

It was proposed by Councillor Chowns and seconded by Councillor Harrington that the following be added to recommendation (d):

‘and a full climate and ecology impact assessment is included at the design stage.’

It was unanimously resolved that:

a)       Cabinet note that the current capital programme allocation of £40.651 million for the Hereford City Centre Transport Package (HCCTP) is now insufficient to complete remaining undelivered projects (transport hub and public realm) in the programme without additional funding

b)       The HCCTP programme be deconstructed into individual projects to enable clearer reporting on each project

c)       That the Chief Executive commissions a South West Audit Partnership (SWAP) audit of the expenditure on the HCCTP programme to understand the cost escalation

d)       The remaining programme funding be allocated to the development of the transport hub project design and consultation and the Interim Director for Economy and Place (in consultation with the Section 151 officer and the Cabinet Member for Infrastructure and Transport)  is authorised to progress this design and consultation to enable cost certainty to be established and further delivery funding sought and a full climate and ecology impact assessment included at the design stage; and

e)       The public realm projects in the HCCTP be considered in a wider assessment of public realm and sustainable connectivity in the City and delivered as individual projects under the wider strategy ensuring the LEP objectives are delivered. The Interim Director for Economy and Place (in consultation with the Section 151 officer and the Cabinet Member for Infrastructure and Transport)  is authorised to progress this work

The meeting adjourned at 16:30 and resumed at 16:38.