Agenda item

(1)               The report set out the current conditions under which the Kent Thameside Strategic Transport (Homes & Roads) Programme was being developed and implemented covering in particular, the available funding, management of risk and the proposals for governance arrangements of the programme.  It was proposed to seek a further Key Decision from Cabinet on 15 October in light of the considerable changes to the progress of development and the available funding that had taken place since a previous decision was taken on 21 February 2008 (Decision No. 07/01108), which agreed to the County Council acting as the Accountable Body for the programme.

(2)               The Kent Thameside Strategic Transport (Homes & Roads) Programme was a package of improvements that responded to the complexities encountered in assessing the individual impacts and mitigation measures for significant development across the boroughs of Dartford and Gravesham.  The 20-year programme aimed to provide key transport infrastructure improvements that would enable the planned level of development in Kent Thameside to be realised. 

(3)       As the Accountable Body for the programme the County Council was responsible for the management of the programme and administration of the funding.  A dedicated Programme Investment Fund had been set up for the programme within the County Councils corporate financial system.  A cash flow model had also been developed to assist the financial management process.  The current estimated cost for the programme was £116.2m and anticipated funding was estimated at £84.0m leaving a funding gap of £32.2m (current prices). 

(4)       In the course of the management of the programme the situation might arise where the County Council was required to use its Prudential borrowing powers to ensure that schemes were completed.  The estimated cost to the County Council was £800,000 per annum for every £10m borrowed.  Although it was not envisaged that the County Council would exercise the powers to cover the shortfall in funding it might be necessary to use such powers to overcome short-term cash flow issues when implementing individual schemes.  In such circumstances the County Council’s borrowing costs would be funded through the programme.

(5)               Discussions with Dartford and Gravesham Borough Councils had identified potential funding of around £5m from the New Homes Bonus initiative.  An estimated 1170 dwellings were expected from sites between 2012/13 and 2015/16 based on information received from Land Securities and the Borough Councils, resulting in a cost to the County Council of around £1.0m, with the Borough Councils bearing the remaining cost.

(6)               The programme (a) would contribute to Ambition 1 of the Vision for Kent (To Grow the Economy) by delivering the critical infrastructure to create the conditions for economic growth; (b) was in line with priorities 8, 9 and 10 of Bold Steps for Kent driving economic prosperity through unlocking key sites in the Thames Gateway Kent region, helping to deliver the Kent & Medway Housing Strategy and ensuring that new housing development was matched with the appropriate infrastructure; and (c) was identified within the Local Transport for Kent 2011-16 and would deliver a priority for the Thames Gateway Kent area set out in the integrated transport strategy Bold Steps for Transport “Growth Without Gridlock”.

(7)               The report set out details relating to funding for the programme which largely consisted of public sector grants (principally through the Department for Communities & Local Government) and private sector developer contributions; a review of the programme in the Autumn of last year instigated by the uncertainty over public sector funding for the programme and the continuing poor market conditions causing concern over the ability of development to fund major infrastructure improvements; and a risk assessment conducted on the programme as part of the economic appraisal that was submitted to secure the £13m funding from the HCA. 

(8)               The programme was conceived in 2007 under the auspices of the Kent Thameside Partnership.  With funding now available and the programme starting to move into its implementation stage, it was appropriate that more formal Governance arrangements were established.  The suggested components of the Governance arrangements for the programme were set out in Appendix 4 of the report.  The key component of the arrangements was the setting up of a Steering Group.  It was proposed that the Cabinet Member for Regeneration & Economic Development was entrusted with the task of setting up the Steering Group in consultation with Dartford and Gravesham Borough Councils.

(9)               Conditions had significantly changed since the programme was conceived and there was currently a £32m funding gap.  The justification for the programme and its objectives had largely remained unchanged.  Some public sector funding had already been secured along with developer contributions and implementation of the programme had started.  There were significant risks inherent in the programme and strong management would be required to ensure that they did not materialise. 

(10)          The programme would be delivered over a 15-20 year period and there was a long term commitment on the part of all of the key stakeholders to the growth agenda in Kent Thameside as witnessed by the DCLG/DfT proposition.  Whilst there was currently a funding gap it was envisaged that opportunities would arise to secure additional funding for the programme. 

(11)     Mr Lees (Local Member for Swanscombe & Greenhithe) highlighted that a number of the schemes contained in the Kent Thameside Strategic Transport Programme would affect his constituents.  He raised concerns about how the schemes would be prioritised.  He remarked that both the A2 Bean Junction and the London Road/St Clements Way Junction already had problems.  He was also concerned that with the current funding gap there was the danger that schemes may not be built or significantly changed.

(12)     In response Mr Lees was informed that it was proposed to establish a Steering Group to monitor the progress of the programme.  A Forward Delivery Programme would also be produced setting out the planned expenditure and implementation of schemes.  This would be reviewed and agreed annually by the stakeholder through the Steering Group.  The A2 Bean Junction and London Road/St Clements Way Junction have consistently been identified within the programme as priority locations for improvement.  The commitment by DfT/HA to refresh the business case/design for the A2 Bean and A2 Ebbsfleet junctions should determine when the improvement of these junctions should take place.  Any changes needed to the programme would be dealt with through the annual review of the Forward Delivery Programme.

(13)     Mr Sweetland informed the Committee that the reasons why KCC was the Accountable Body for this programme were historic but there was probably no other organisation that could perform this function.  He also highlighted that there was the risk that KCC could be liable for any overspend on individual schemes.

(14)     Mr Bullock had concerns about KCC's role as the Accountable Body in particular he could envisage the transport improvements being implemented for the full build-out of development but the funding gap may not be resolved.  In response Mr Bullock was informed that schemes would only be implemented within the forecast level of funding for the programme.

(15)     Mr Austerberry (Corporate Director Enterprise & Environment) commented that this was a long-term strategic programme and the report did not hide the risks associated with the programme.  EHW's role would be to implement schemes through its Major Projects division.  It would be essential that before any commitment was made to the implementation of a scheme that it was fully designed, costed and the risks identified.  He was comfortable that the right processes were to be put in place to provide robust management of the programme.

(16)     Mrs Law was also concerned about KCC's role as the Accountable Body for the programme but supported the recommendations of the report.

(17)     RESOLVED that the following recommendations to be considered by Cabinet be endorsed:-

(a)       that Kent County Council continuing to act as the Accountable Body for the Kent Thameside Strategic Transport (Homes & Roads) Programme, be confirmed;

(b)       that the setting up of the Governance arrangements for the Kent Thameside Strategic Transport (Homes & Roads) Programme be entrusted to the Cabinet Member for Regeneration & Economic Development in consultation with Dartford and Gravesham Borough Councils; and

(c)        that the Corporate Director Business Strategy & Support, in consultation with the Corporate Director Enterprise & Environment, be authorised to negotiate and execute legal and/or partnership agreements pursuant to the delivery and management of the Kent Thameside Strategic Transport (Homes & Roads) Programme.