'Gambling on Norfolk's future' - Fears over Western Link's financial risk

Opposition leaders say County Hall’s coffers will be left empty if the scheme does not get the go-ahead from government.

They say the authority’s ruling Conservative group has ignored the advice of its own officials to create a “contingency” fund to pay for its share of the cost of the road.

Green councillor Jamie Osborn, a critic of the scheme, said the council was “playing Russian Roulette” with Norfolk’s finances, while Labour’s Emma Corlett warned it could mean cuts to social care, children’s services and libraries.

But Conservative cabinet member Andrew Jamieson insisted the risk was “common practice”, while the council’s most senior finance officer said he felt “comfortable” the authority’s reserves could “withstand” it.

The scheme, to build a 3.9mile road that would connect the Northern Distributor Road (NDR) to the A47 west of Norwich, has come up against objections from environmental campaigners and every opposition party at County Hall: Labour, the Liberal Democrats and the Greens.

The road is currently anticipated to cost about £198m - roughly £30m of which is to be covered by the county council.

The authority hopes the remaining £168m will be covered by the Department for Transport (DfT), to which it has submitted a business case for the scheme.

Several million of the council’s £30m contribution has already been spent on the road’s design, development and other preliminary stages.

But there is a risk that DfT will turn the scheme down - which Labour opposition leader Steve Morphew raised in his capacity as chair of the council’s scrutiny committee.

Labour's Steve Morphew (Image: Archant)

At a Wednesday meeting of that committee, he referred to the council’s corporate risk register, a document which records and ranks potential threats to the council’s finances and overall strategy.

On the register, “failure to receive the necessary funding or statutory approvals” from the government for the road is identified as an “amber” risk - the middle category in a traffic light system of dangers.

It adds that “contingency planning” for money already spent on the project should therefore be in place.

Mr Morphew said if the scheme is rejected by DfT, it will “to all intents and purposes, wipe out our reserves”.

He said this was because the council’s spending on the project so far would suddenly have to be accounted for from the council’s short-term ‘revenue’ budget, rather than from it’s separate ‘capital’ budget, which is ring fenced for long-term infrastructure projects.

The council’s most senior finance officer, Simon George, said he believed that somewhere “in the mid to high teens” of millions had already been spent on the scheme.

If the project does not go ahead, he confirmed that making up this loss “would pretty much take all of” the council’s general reserves fund.

While he admitted such an event would be a “material shock” to the authority and that it would probably take three or four years to build the council’s reserves back up, Mr George added that it would not be practical to have such contingency money in place for every big infrastructure project.

He said he was “comfortable that the general fund as it stands is currently sufficient to withstand that risk” and that the register could have been written “in a clunky way”.

Mr Morphew insisted that the risk and its recommended mitigations had in fact been written in a “very clear and transparent way”.

Labour councillor Emma Corlett later stated: "They [the Conservative administration] have ignored a clear warning about the possible catastrophic effects on the council’s finances from their own officers signed off by cabinet and the audit committee.

Labour county councillor Emma Corlett (Image: Archant)

“That leaves a sword of Damocles over funding for social care, children’s service and libraries…

“If they are that reckless with the cash, how can we have any confidence in any assurances about all the other risks of this reckless, damaging and ferociously expensive road?"

Green councillor Jamie Osborn made similar comments: "The Conservatives are playing Russian Roulette with the future finances of Norfolk.

“With horrific recklessness, they are gambling everything they have on the ever-shrinking chance that the government will provide the money they need to get themselves out of the hole they've dug for themselves.

"We are not yet out of the pandemic, but the council is preparing to blow all of their available revenue reserves on a road that won't even be started for many years to come.

“It's past time to abandon this damaging project before they risk even more millions of pounds."

And David Pett, a campaigner against the road’s construction, said: “Irrespective of the perceived merits of this road proposal, gambling on Norfolk’s future for the sake of a three mile village bypass defies all rational belief.

“For the sake of preserving and improving both essential and non essential public services the time has now come to draw a line under this nonsense.

Commenting after the meeting, the council’s Conservative cabinet member for finance, Andrew Jamieson, said it was “common practice” for a council to plan to contribute to part of the cost of a major infrastructure project.

Andrew Jamieson, Norfolk County Council cabinet member for finance (Image: Norfolk County Council)

“If a project is not seen through to delivery then any capital costs incurred would need to be written off to the revenue account,” he said.

“This is the case with the NWL, but also the case with the Third River Crossing in Great Yarmouth and any other major infrastructure scheme.”

Analysis

The proposed Western Link road has become increasingly controversial in recent months, as concerns about not only its cost, but its environmental impact, have grown.

Campaigners against its construction argue that the road would encourage more car use, and would involve the destruction of woodlands which are home to a super-colony of barbastelle bats.

The county council has insisted the road will in fact reduce carbon emissions - because they expect it to ease traffic congestion - and that its ecological impact on the various species living along its route can be mitigated against.

Earlier this month, it was announced that the route of the road would be altered so as to reduce the impact on the bats but the extent of the change is not yet clear.