An £18.5m shortfall in the funding needed to complete improvements to the front of York Station has been caused by delays, inflation, contracts and design changes, councillors have heard.
City of York Council’s development director Garry Taylor told councillors changes making the scheme comply with accessibility standards cost £2m to £3m while construction inflation was running at 35 per cent.
Cllr Katie Lomas, the council’s Labour finance lead, said she was looking at changes to the way major projects are tracked so increases in costs could be better monitored.
But Liberal Democrat opposition leader Cllr Nigel Ayre said the council needed to get a grip on the huge increases in costs which threatened to affect spending in other areas.
It comes as the council’s executive is set to discuss options for address shortfalls in the Station Gateway and York Outer Ring Road projects in July.
The scheme to dual the ring road from the A19 and Little Hopgrove roundabout is now estimated to cost around £164m, compared to £66.4m when it was approved in 2024.
There is currently £51m left in the budget for that project.
Members of the council’s corporate scrutiny committee heard this week that officials were also reviewing the Castle Gateway scheme for the area around Clifford’s Tower.
Councillors were told in January the scheme had been broken up into phases following two unsuccessful bids for £13m in levelling up funding.
They also heard that the scheme cost of the scheme as it was approved in 2020 would be £16m today.
This week Mr Taylor said the world had changed since the Station Gateway scheme was drawn up and got planning permission in 2021.
He added subsequent spikes in inflation had not been factored in at the time and the public sector had been more willing to enter into riskier contracts.
Mr Taylor said breaking the project up into five phases had seen works slip between them, further increasing costs, and it should have been delivered as one package.
He added contractual arrangements had left the council footing the bill for staff being on site while the project faced delays of between a year and 14 months.
‘Trying to find better ways’
Labour’s Cllr Lomas said better procedures to report cost increases were being planned so the council does not end up in the same situation again.
The finance executive member said: “It’s given us food for thought about how decisions delegated to council officers work and how we assess the costs throughout the life of a project and potential risks.
“We’re trying to find better ways of doing that as a result of this.”
Liberal Democrat leader Cllr Ayre said the cost increases had been absolutely huge and could affect wider council finances.
The Liberal Democrat said: “If we don’t properly resource other areas of the council we’re not going to have enough money to spend elsewhere.
“We need to get to grips with our capital programme.”
Proposals to resolve the Station Gateway shortfall include taking £5m from the Outer Ring Road to finish the Station Gateway.
Upgrades to Clifton Moor roundabout would be prioritised and further junction works would be funded by contributions from forthcoming housing developments.
A council report stated dualling the Outer Ring Road was still possible if the project is staggered to allow time for fresh sources of funding to be found.
The council’s Liberal Democrat and Conservative opposition groups said delays in starting works for the shortfalls and warned there is no guarantee of recouping money for the Outer Ring Road.
Government funding worth £25m for the Outer Ring Road remains under review ahead of national infrastructure spending being set out next week, the Local Democracy Reporting Service understands.
