Rising costs mean Link Road is now ‘low value for money’

August 5, 2013 by combehavendefenders

The recent £13m increase in the cost of the Link Road means that the project has now dropped into the ‘low value for money’ category: the £56m Department for Transport funding should therefore be withdrawn.

The Campaign for Better Transport has redone the calculations, taking into account the increase, and found that the new benefit:cost ratio (BCR) is just 1.3.  The Department for Transport’s (DfT) own guidelines state that it should not fund projects less than ‘high’ value for money (BCR 2.0 or above) except in ‘exceptional circumstances’.  What the ‘exceptional circumstances’ are in this case, neither the DfT nor East Sussex County Council (ESCC) is able to tell us.

According to ESCC itself (see p28 of this report):

‘The DfT shall be entitled to cease or suspend payment of Section 31 grant [ie the £56m funding] or to require the repayment of all or part of the grant already paid in any of the following circumstances:

…In the event of any change in the scope or total estimated cost of the Scheme that could have a material impact on the Scheme’s value for money category’

Since the extra £13m has led to a ‘material impact’ on the VFM category, the DfT should surely withdraw its money – shouldn’t it?  But in a cunning (some might say dishonest) sleight of hand, the DfT claims that the VFM remains the same because money already spent is ignored.

This would appear to mean that the costs could rise indefinitely, and the VFM would always remain the same provided the increase in cost was no greater than the amount of money already spent.

We must expose this financial conjuring trick, and continue to insist that the road be stopped.  Although £31m has already been spent, at least £82m could be saved by cancelling it now – and probably far more, as costs will only continue to spiral over the next two years.

As ESCC Director of Economy, Transport and Environment Rupert Clubb himself admits (here: p22, point 1.6):

‘Clearly if the money was not transferred to the BHLR, it could in principle be used for other projects.’

Let’s stop this madness now, and use the money for life-enhancing projects, not for environmental destruction.