Decision details

Background:

In the Growth Deal announcements in July 2014 (Round One), January 2015 (Round Two) and February 2017 (Round Three), the Government allocated £570 million from the Local Growth Fund to capital projects across the South East Local Enterprise Partnership (SELEP) area.

In total, through the three rounds, £128m Local Growth Fund was allocated towards the delivery of 25 Highways and Transportation projects and 6 non-transport projects in Kent.

As the end of the Growth Deal (March 2021) approaches, several projects throughout the SELEP region have experienced difficulty with delivery.  This has resulted in projects having their LGF allocations removed and to date £33.396m of funding has been returned to SELEP for reallocation to projects which have demonstrated deliverability by March 2021. 

Through this process, an allocation has been made available for the M2 junction 5 improvement scheme.  This scheme will be delivered by Highways England and KCC will transfer the LGF on to the third party for the delivery of the scheme.

It has been agreed with Government that SELEP and therefore Kent County Council will receive Local Growth Fund in quarterly instalments in advance in accordance with the scheme spending profiles, subject to completion of a Business Case for each project and the approval of the project by SELEP Accountability Board.

A legal agreement has been prepared between KCC and Highways England which will transfer all the LGF spend and project management responsibility on to them. This includes updating Kent County Council monthly on project progress and spend; as well as completing the post scheme monitoring required by SELEP.

The scheme will be delivered in line with the current governance arrangements under the Local Growth Fund (KCC and SELEP). Therefore, it will carry out necessary consultation and equality impact assessments as part of the scheme progression.

The business case for the M2 junction 5 scheme was approved at SELEP Accountability Board on 14^th February 2020.

The M2 Junction 5 scheme is subject to a Public Inquiry which has been delayed due to the Covid-19 emergency.  It is likely that the Public Inquiry will now be considered in August 2020.  In order to demonstrate that the full funding package is in place; Highways England need to have sealed legal agreements available to show the LGF and KCC contributions towards the scheme delivery.

Before the legal agreement can be sealed for the scheme; a key decision is required.  The LGF cannot be spent until the Key Decision is in place.

No funding will be transferred to Highways England until the result of the Public Inquiry is announced; and it can be demonstrated that the project will proceed to delivery.

Options –

The options considered for the M2 Junction 5 Improvement Scheme are set out in the business case document which can be accessed here:

M2 Junction 5 (pages 13-15)

https://www.southeastlep.com/app/uploads/2019/07/M2-J5-LGF-Business-Case-redacted.pdf

How the proposed decision meets the objectives of ‘Increasing Opportunities, Improving Outcomes: Kent County Council’s Strategic Statement (2015-2020)’

The scheme particularly addresses Strategic Outcome 2 “Kent communities feel the benefits of economic growth by being in work, healthy and enjoying a good quality of life”. The improvement scheme will increase the capacity at the already constrained M2 junction 5; reducing journey times to assist Kent’s residents to reach employment, education and leisure activities.  The junction is one of the top 50 national casualty locations on England’s major A roads and motorways; and the scheme will improve the safety for residents and visitors to Kent.  The infrastructure will also unlock housing sites in Swale to generate economic growth within the area.

As Cabinet Member for Highways & Transport I approve the progression, via KCC’s Local Growth Fund arrangements, for the M2 Junction 5 Improvement Scheme; allowing it to progress to the next stages of development and delivery.

To facilitate this, I agree:

-          to confirm that KCC will act as the accountable body for the project;

-          to enter into a Local Growth Fund (LGF) funding agreement; and

-          to enter into legal agreements with the relevant third parties delivering the schemes to transfer the conditions of the LGF spend and project management to them

I also agree to delegate authority to Corporate Director of GET, in consultation with the Corporate Director of Finance & Procurement, to enter into relevant legal agreements and take other actions necessary to implement this decision.