Major projects planned by the Cambridgeshire and Peterborough Combined Authority could ‘run out of money’ unless urgent changes are made to the way it spends its budget, members have been told in a stark warning from its Interim Chief Financial Officer.
The Overview & Scrutiny Committee of Peterborough’s mayoral authority were told at a meeting on Monday, November 26, they must rethink the way money is being spent or the authority could run out of funds for a number of major countywide projects .
The warning came from Karl Fenlon, Interim Chief Financial Officer at Cambridgeshire & Peterborough Combined Authority, who said: “The authority has far too many major projects running already, and we need to refocus our priorities or the funding for some of these will run out by 2023. We need to focus on the deliverable rather than the aspirational.
“Trade-offs will have to be made on certain schemes in order to prioritise the money for other projects, and the starting point for that is the way we fund our feasibility studies. We simply don’t have enough money to continue funding study after study for everything on our ‘wish list’.
“In future, we need to fund clearer feasibility studies much earlier in our budget thinking in order to make all of these projects work – we need to focus on where that funding is coming from to achieve the schemes that we want to deliver – we simply have to work in a different way in the future.”
In his presentation to councillors on the recently formed committee, Mr Fenlon outlined projects for which funding has been approved and are going ahead, these include: Cambridge South Station, Kings Dyke, Peterborough University (but only the business plan), Soham Station and St Neots River Crossing Cycle Bridge.
Other projects Mr Fenlon said could potentially be ‘at risk’ if the authority continues to spend at the current rate, include: A10 upgrade, A47 Dualling Study, the CAM Metro, Huntingdon Third River Crossing and Peterborough University (land and infrastructure for build).
“Let me be completely clear”, Mr Fenlon said. “These unfunded schemes are only at risk if we continue to spend our resources the way we are doing at the moment. We need to rethink our policy on capital funding and reserves.”
Cllr Marcus Gehring, Cambridge City Council said: “Are you asking us to ignore every budget we’ve ever seen in the past? Because if that is the case then we don’t have a budget at all, and as I understood it, by law if we don’t have a budget we can’t spend any money. Is that what you are saying?”
Mr Fenlon replied: “No. This is simply budgeting in a different way to what we have been used to. We mustn’t think in terms of one gigantic pot of money that we can ‘dip’ into whenever we wish. I just don’t want us to confuse capital budget with revenue in the way that we have done up to now.”
Cllr Peter Topping, South Cambridgeshire District Council asked: “Do we have sufficient funding within the budget that you are suggesting to produce a list of priority commitments that we can deliver?”
“That is exactly why I am suggesting we need to do this”, Mr Fenlon said. “The issue here is that the Combined Authority hadn’t brought these schemes to a stage where they were sufficiently developed so that they could be delivered.
“If we tackle each of these projects individually and appreciate exactly what they are going to cost, then we will not be in a position to cover all of the feasibility studies to take them forward to delivery.
“Just completing what we already have will have completely depleted our funds by 2023, so that there will not be enough left in the pot for any of our ‘wishlist’ projects – that is the reality of it, and we need to face up to it – the ambition of the Combined Authority has or will outstrip our available funds.
“My message today is not to worry about running out of money, as we have significant capital reserves, but simply that we are all made aware of the work that remains to be done, and that we must prioritise that work & scrutinise it very, very carefully.
“We will then examine the results of that prioritisation so that the aspirations of the Authority can be realised and delivered.”
Cllr Sam Clark said: “I can see the value of prioritising these projects but we must remember that they are not just individual schemes, but interlinked pieces of a much larger jigsaw puzzle and part of the infrastructure that we have been asked to deliver.”