Issue details

Proposed decision –

As Cabinet Member for Highways and Transport, I agree to give approval to progress the Sturry Link Road scheme through to delivery as indicated below and specifically I:

(a)  Give approval to progress the construction of the Sturry Link Road A28 roundabout and associated works utilising secured S106 funding in order to implement the planning permission for the scheme.

(b)  Subject to a successful Homes England bid, delegate to the Corporate Director of Finance the authority to accept Brownfield, Infrastructure and Land (BIL) funding from Homes England to deliver the A28 Sturry Link Road viaduct.

(c)  Confirm that other decisions in Record of Decision 18/00027 and 23/00066 remain extant.

(d)  Approval for any other further decisions required to allow the scheme to proceed through construction to be taken by the Corporate Director of Growth, Environment & Transport under the Officer Scheme of Delegations following prior consultation with the Cabinet Member for Highways and Transport.

Reason for the decision

Following a report to Environment & Transport Cabinet Committee in May 2018, a Record of Decision 18/00027 gave a wide range of authorities to allow the Sturry Link Road scheme to proceed. A further Record of Decision 23/00066 provided authority to progress with the Compulsory Purchase Order (CPO) process to secure the land required for the scheme.

To deliver the scheme, the Council has secured funding through S106 agreements and government funding. To fully cover the cost of the viaduct, the Council are in discussions with Homes England regarding the provision of Brownfield, Infrastructures and Land (BIL) Fund towards the scheme, to reduce the financial risk to KCC. This funding, if agreed, will consist of both a grant to fully cover the existing funding gap, and also provide a recoverable grant to forward fund the S106 contributions to the scheme which are not yet banked. It is appropriate therefore, to seek a further key decision to accept this funding, but also to progress with the A28 roundabout construction in the meantime. 

The proposed decision is a key decision as it requires expenditure of more than £1m of secured funding.

Background – Provide brief additional context

The A28 Sturry Link Road is a critical infrastructure improvement, designed to alleviate severe congestion at the Sturry level crossing and improve journey reliability along the A28 corridor. This new infrastructure will mitigate the traffic impact of the delivery of over 6,000 homes at Sturry, Hersden and Herne Bay, while also indirectly enabling growth at other strategic land allocations identified in Canterbury City Council’s Local Plan. By providing additional network capacity, the Sturry Link Road underpins economic development and sustainable housing growth across East Kent.

The scheme will construct a 5-span viaduct over the River Stour and the Ashford–Ramsgate railway, linking from a new roundabout on the A28 in the south to the spine road being constructed as part of the Land at Sturry development in the north.

Planning permission was granted for the Sturry Link Road scheme on 7^th September 2021 and expires on 7^th September 2026. A Design and Build contract was awarded to Volker Fitzpatrick in February 2024. The detailed design is currently being finalised following a review via the Technical Approval Process and the approval of two non-material planning amendments to the scheme. There is a break clause between the detailed design and construction phase in the contract, should this be required.

The Compulsory Purchase Order (CPO) and associated Side Roads Order (SRO) was confirmed by the Secretary of State on 19 February 2025 following a Public Inquiry in October 2024. Notices have been served, providing access to the required CPO land plots from February 2026.

The original programme was for commencement of the works in April 2025 however due to delays in the Land at Sturry site coming forward this has now been rescheduled for April2026, with pre-commencement works to begin in early 2026. Archaeological investigation works were completed in November 2025, with reporting to follow.

Although the rescheduled programme reduced some financial risk to KCC by allowing time for further S106 contributions to be banked, it has resulted in an increase in the cost estimate for the scheme. The updated programme and spend profile to deliver the scheme still maintained a requirement on KCC for forward funding and also resulted in a funding gap. KCC have identified funding through a BIL funding grant from Homes England, which will cover the full funding gap and also cover the s106 contributions towards the infrastructure, meaning that KCC is no longer required to provide forward funding for the scheme. Full details of the finances are provided in the subsequent finance section.

The Homes England grant discussions are ongoing. Homes England with KCC are submitting a business case to MHCLG by the end of 2025. A decision is due early in 2026; however, a further legal agreement will be required between the parties prior to the award of funding.

To ensure that the scheme can progress without undue additional cost due to programme delays, it is vital that the planning permission is implemented prior to September 2026. This can be achieved through the construction of the A28 roundabout from April 2026 ahead of constructing the viaduct. KCC have already secured sufficient funding through s106 developer contributions to progress this element of the construction without further funding. Road space on the A28 at Sturry is severely limited. KCC have already booked the road space for the roundabout construction, and there is no road space available to delay this element of the programme closer to September 2026. The viaduct would then follow once the Homes England funding was confirmed and the grant agreement in place.

Options

Option 1 (recommended) – Approval to proceed with A28 Roundabout; Approval for delegation to accept BIL funding from Homes England

This option is recommended for the following reasons:

-      The project remains live and as such KCC will be able to implement the planning permission prior to September 2026.

-      The A28 roundabout is constructed within available booked road space and in line with published traffic management timescales.

-      The identified funding gap is fully covered by the proposed Homes England grant and there is a reduced need for forward funding from KCC.

It should be noted that this option, while recommended, has the following risks:

-      There is a possibility of programme slippage for the viaduct if the Homes England grant agreement is not agreed within a reasonable timescale. This will be mitigated by providing legal resource as required to expedite any action required by KCC. Discussions are taking place with Homes England to consider that any increased costs due to the delay of funding will also be covered by the BIL grant to further minimise risk to KCC. 

-      There is a risk that the funding from Homes England does not come forward, leaving a funding gap. However, this option still minimises financial risk, specifically the risk of abortive costs as an asset (the A28 roundabout) will be delivered regardless of the viaduct coming forwards. Further funding opportunities can then be explored during the ongoing construction of the roundabout.

Option 2 – Delay project but provide approval for delegation to accept BIL

While delaying the scheme may enable the programme to better align with the developer funded portion of the spine road, the option has the following significant drawbacks:

-      Planning permission could not be implemented prior to September 2026, meaning the planning would lapse. This would require a full resubmission to planning, causing further delays and additional approval requirements relating to Biodiversity Net Gain.

-      It is likely that a delay at this stage would either cause the loss of the main contractor or result in increased contractor costs of at least £4m which would be unfunded.

Option 3 – Delay project and not accept funding from Homes England

In addition to the consequences outlined in Option 2, this option would leave KCC open to a significant funding gap risk. KCC would also be required to forward fund the S106 contributions that have been identified but not yet banked to support the delivery of the infrastructure.

Option 4 – Cancel project

This option is not considered viable for the following reasons:

-      Cancelling the Sturry Link Road project would result in abortive costs of around £9m representing wasted investment in design, planning, and preparatory works. This figure includes the £6.5m spend to date, expected expenditure up to the point of decision, demobilisation costs and unavoidable costs associated with land acquisition.

-      The reputational damage to KCC would be significant and would harm the Council’s credibility with residents, developers and strategic partners.

-      The Canterbury City Council Local Plan relies on the Sturry Link Road to unlock housing growth, in particular for development sites with a limit on occupations without the link road. Other consented developments are able to build out regardless meaning that there will be traffic growth without any associated capacity enhancements.

-      The Homes England funding opportunity will be lost, leading to a significant funding gap for the project should it be pursued again in the future.

How the proposed decision supports the Council’s Strategic Statement

The Sturry Link Road scheme supports the new Strategic Statement’s priorities by:

·   Supporting local investment and job opportunities in Canterbury and the surrounding areas, by backing major infrastructure in Kent, driving investment and not allowing congestion to limit growth.

·   Ensuring that vital infrastructure to support communities and housing is delivered in advance, enabling sustainable growth and economic development.

·   Improving transport connectivity and resilience on Kent’s road network.

Financial Implications

The scheme is estimated to cost £47.5?million, with an additional £6.4?million recommended for risk and contingency, bringing the total to £53.9?million. This has increased from the original cost estimate included in the business case due to inflationary pressures. To date the scheme has spent £6.5m in undertaking surveys and developing the designs through consultation, planning and CPO. The scheme also now has a fully detailed design and specification.

The increased cost estimate is partially offset by the indexation on the developer contributions. 

The current funding available from Local Growth Fund and developer contributions (including indexation calculations) is £44m. Prior to the identification of funding through the BIL from Homes England, a potential shortfall of between £4 and £10m was identified. The securing of this funding relies on a successful Homes England endorsed bid to MHCLG to allow the BIL funding to be allocated to this scheme. A final decision regarding this is expected in January 2026. The final offer has not yet been issued by Homes England. As such, the full terms of this funding grant are currently unknown, but it is expected that this will be a grant to fully cover the funding gap as well as a recoverable grant to the value of the S106 contributions yet to be banked by the Council, to offset the forward funding requirement for KCC. However, it is appropriate that the Council proceed with the governance now to ensure we can meet Homes England’s timescales for grant acceptance. Further detail will be provided within the subsequent Cabinet report when it becomes available.

Sufficient developer contributions and the grant from the Local Growth Fund are banked to enable the construction phase of the A28 roundabout to proceed. However, the Homes England funding is required to enable the remainder of the scheme to progress to the construction.