Scheme finances and project management

What are the financial implications of not delivering the Victoria Arch widening scheme? Who is liable for any financial penalties and how will residents be protected?

Project funding

The total project cost is £115 million, made up of £95 million Homes England grant funding, £10 million agreed contribution by Network Rail and around £10 million in initially planned borrowing by Woking Borough Council to support housing elements of the scheme to be recovered from site specific developer contributions (a Section106 tariff).

To bring forward the delivery of the relocation or reuse of existing access road, a business case will be developed outlining the engineering works involved and the associated costs, and submitted to Homes England for further funding.

Project liability

Woking Borough Council is the grant recipient and it has the overall responsibility for the project costs, including additional costs. All major projects carry significant financial risks. These are managed by robust governance systems and regular monitoring and reporting.

Surrey County Council is a project partner in the delivery of the project, but it is not signatories of the contract with Homes England. The county council remains committed to the project and is content that Woking Borough Council will be responsible for project delivery, accountable as grant recipient, responsible for cost overruns, recovery, and any risk liability. 

Surrey County Council’s interests as highway authority will be protected through the S278 Highway Works Agreement. 

Network Rail is delivering the bridge element of the scheme which accounts for £65 million of the total project budget. Whilst Woking Borough Council is the grant recipient, and so is responsible for all project cost overruns, it has separate agreements with Network Rail for contracting the deliverability and costs of the bridge element and value engineering design and build is in place to ensure deliverability within the project costs. 

As time has pressed on since the funding was awarded, have the plans been reviewed in terms of escalating costs caused by inflation and general price increases? Is additional funding available to pay for any cost increases? 

At the time of the bid to the government, the total cost of the project is £115 million of which £65 million is allocated for the replacement bridge. 

Internationally and nationally material and labour costs have increased due to the impact of COVID-19 and the UK’s rising inflation rate. As part of the scheme’s project management, a contingency strategy is in place and a robust risk register is monitored on a regular basis by the project team and reported to the HIF Oversight Panel, attended by councillors.

Due to the external influences outlined above, the council is expecting for costs to increase. Its relationship with Homes England (HE), allows the council to make further bids for additional funding, if required.

Woking Borough Council is conducting joint talks with Homes England to see what can be further done to avoid the council taking on financial risk.

What is an ‘oversight panel’ and why it is involved in the Victoria Arch widening scheme?

The council has democratic and open processes, such as the Overview and Scrutiny Committee, which is chaired by an opposition councillor and its purpose is to ask questions and scrutinise certain issues. 

The purpose of an oversight panel is to:

  • provide constructive ‘critical friend’ challenge
  • amplify the voices and concerns of the public
  • be led by independent people who take responsibility for their role
  • drive improvement in public services.

Read more about the HIF Oversight Panel, including its terms of reference

Questions submitted by members of the public

A significant number of questions have been received from members of the public during our engagement work, which remains ongoing. The summary questions and answers outlined above aim to provide responses to the main points and topics raised by local residents.

  • What is the projected final cost?
  • This project is mostly centrally funded. Who is liable for any overrun/delay costs above the government funding – is it WBC or SCC or both?
  • What are the financial implications for the Council/residents of not using the £115 million already allocated to the original plans? Having read of the possibility for Woking Borough Council to return grant money already received from Homes England, the retention of which is dependent upon the council delivering a vast numbers of high rise homes, do the panel feel that refusal of planning applications and the reduced town apartment demand will force this repayment and result in insufficient funds for the provision of the tunnels?
  • Is Network Rail actually contractually locked into the Victoria Arch widening scheme project?
  • As time has pressed on since the award of the funding, have the plans been reviewed in terms of escalating costs as prices are rising? 
  • Shouldn’t the residents have the opportunity to have oversight of this project as it’s such a disruptive and significant project?