The integrated wetlands programme makes a valuable contribution to the environmental and economic priorities set out within the County Plan 2020-2024, unlocking housing development and associated economic activity while safeguarding and improving the water quality of the River Lugg. The Luston wetland as a pilot scheme represents a successful collaboration between the council and a range of stakeholders, and establishes a model for future phosphate mitigation schemes both in Herefordshire and beyond.

Following an open procurement process a contract was placed for the initial construction phase of the Luston wetland in 2022. Due to the need to meet ambitious expenditure milestones as part of Local Enterprise Partnership (LEP) grant funding conditions, it was necessary to move to the construction phase while elements of the design were still in development, and while regulatory approvals with no direct precedent were still being worked through. In order to secure the grant, contractor procurement went ahead based on the design as far as it had progressed at that stage.

Subsequent stages of design addressed the absolute certainty of phosphate reduction levels required to underpin the principle of the offsetting scheme, and a cautionary approach was essential at every level in order to satisfy the statutory requirements for such a scheme. The design development was also required to respond to the evolving requirements of the regulatory bodies with regard to performance projections, flood risk and drainage. Of most significance was a resulting increase in the water holding capacity of the wetland lagoons, which leads to a greater volume of bulk excavation in the construction phase. In tandem with this, Environment Agency requirements regarding flood risk have impacted previous proposals to retain surplus soil on site, meaning the bulk of the excavated material being loaded and removed off-site to a licensed location.

Options for the further phases of construction work dictated by the developed design included separating off elements of the work (in particular the bulk excavation and disposal) and procuring these works separately, or utilising the established provisions of the NEC4 form of contract to employ the existing contractor, JN Bentley, with support from the appointed quantity surveying consultant to assess value for money. The following conclusions emerged from robust consideration:
1. It would not be practical or economic to have two separate contractors working in tandem on the same site, and so a subsequent phase would have to be deferred until completion of the original phase.
2. Deferring those works as in (1) would extend the project outside of the grant expenditure deadlines, so that a grant allocation of £1m is likely to be lost.
3. Unit rates for the bulk earthworks and disposal had been obtained from the contractor in the competitive tender and included in the original contract. These rates can be applied to the subsequent phase on a re-measurement basis, ensuring value for money in those works relevant to those rates. Reference to rates for the same work in similar more recent procurements has demonstrated that the contract rates in place remain competitive against the market.
4. Separating the work into distinct phases would be expected to be more costly overall since there would be a need to pay contractor site establishment, plant and equipment costs twice, whereas combining the phases carries economies of scale in using and overlapping the site establishment, plant and equipment provisions already in place.

The original phase contract value was £363,382, plus enabling works of £67,462 agreed during the procurement process, making a value at commencement of £430,844. This reflects the extent of design information in place at the time of the initial contract, due to the stage of design and approval reached at that point. The largest proportion of the cost forming the subsequent phase comes from additional bulk excavation, handling and disposal, along with the contractor establishment costs associated with a longer period on site.

The final cost of delivering the wetland scheme falls within the established budget. With the wetland-based phosphate offset scheme being the first of its kind, project development costs were anticipated and the £1m LEP grant funding was allocated to cover the additional project development costs not recoverable through the sale price of the phosphate offset credits resulting from the scheme.