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Fears over Norwich Western Link’s financial risk

The County Council has been accused of ‘betting on Norfolk’s future’, risking ‘almost all’ of its reserves to secure the controversial Norwich Western Link (NWL) road.

Opposition leaders say County Hall’s coffers will remain empty if the project does not get the green light from the government.

They say the ruling Conservative group ignored advice from its own officials to set up an “emergency” fund to pay its share of the cost of the road.

Green Councilor 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, services for children and libraries.

But Tory cabinet member Andrew Jamieson insisted the risk was ‘standard practice’, while the council’s top finance official said he felt ‘comfortable’ that the authority’s reservations can “resist” it.

County Hall in Norwich – the seat of Norfolk County Council
– Credit: Denise Bradley

The plan, to build a 3.9 mile road that would link the Northern Distributor Road (NDR) to the A47 west of Norwich, has faced objections from environmental campaigners and all opposition parties to the County Hall: Labour, Liberal Democrats and Greens. .

The road is currently expected to cost around £198m, of which around £30m will be covered by the county council.

The authority hopes the remaining £168million 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 £30 million contribution has already been spent on the design, development and other preliminary stages of the road.

But there is a risk that the DfT will turn down the plan – something Opposition Labor leader Steve Morphew has raised in his capacity as chairman of the council’s scrutiny committee.

Steve Morphew, Norwich.  Photo: DENISE BRADLEY

Steve Morphew, Leader of the Labor Opposition and Chairman of the Oversight Committee
– Credit: Copyright: Archant 2018

At a Wednesday meeting of that committee, he referred to the board’s enterprise risk register, a document that records and categorizes potential threats to the board’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 medium category in a hazard signal system.

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

Mr Morphew said that if the scheme was rejected by the DfT it would “for all intents and purposes wipe out our reservations”.

He said it was because the council’s spending on the project so far would suddenly have to be factored into the council’s short-term “revenue” budget, rather than its separate “capital” budget, which is reserved for long-term infrastructure. projects.

The council’s top finance official, Simon George, said he believed somewhere “between the mid and teens” millions had already been spent on the scheme.

If the project did not go ahead, he confirmed that compensation for this loss would “pretty much take out” the council’s general reserve fund.

Although he admitted that such an event would be a “material shock” to the authority and that it would probably take three or four years to replenish the council’s reserves, Mr George added that it would not be practical to have such an emergency fund in place. for every major infrastructure project.

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

Mr Morphew insisted that the risk and its recommended mitigation measures had in fact been drafted in a “very clear and transparent manner”.

Union counselor Emma Corlett later said, “They [the Conservative administration] ignored a clear warning about possible catastrophic effects on the board’s finances from their own officers signed by the cabinet and the audit committee.

Councilor Emma Corlett

Emma Corlett, Deputy Leader of the County Council Labor Group
– Credit: Archant

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

“If they are so reckless with money, how can we have any assurance of all the other risks of this reckless, damaging and hugely expensive route?”

Green Councilor Jamie Osborn made similar comments: “The Tories are playing Russian roulette with future Norfolk finances.

Green County and City Councilor Jamie Osborn.

Jamie Osborn, Deputy Leader of the County Council’s Green Group
– Credit: Jamie Osborn

“With horrendous recklessness they are betting everything they have on the dwindling chance that the government will provide them with the money they need to get out of the hole they have dug themselves.

“We are not yet out of the pandemic, but the council is preparing to exhaust all its available revenue reserves on a road that will not even be started for many years to come.

“It is high time to abandon this damaging project before they risk even more millions of pounds.”

And David Pett, an campaigner against the construction of the road, said: ‘Regardless of the perceived merits of this proposed road, betting on Norfolk’s future for a three-mile village bypass defies rational belief.

“In the interest of preserving and improving 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 ‘standard practice’ for a council to plan to contribute part of the cost of a major infrastructure project.

Andrew Jamieson, Cabinet Member for Finance at Norfolk County Council.  Photo: Norfolk County Council.

Conservative Cabinet Member for Finance Andrew Jamieson
– Credit: Norfolk County Council

“If a project is not completed to delivery, all capital costs incurred will have to be written off the revenue account,” he said.

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

To analyse

The Western Link road project has become increasingly controversial in recent months as concerns about not only its cost, but also its impact on the environment, have grown.

Activists against its construction argue that the road would further encourage car use and lead to the destruction of forests that are home to a super-colony of barbastella bats.

The county council has insisted that the road will in fact reduce carbon emissions – as they expect it will ease traffic congestion – and that its ecological impact on the various species living along its route may be attenuated.

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