(Image: City of York Council)
Pressure has mounted on City of York Council to explain why one of its major projects is now more than £34 million over budget.
The council said it understood “residents’ frustration” over the costs involved with the Station Gateway scheme, the bill for which currently stands at £60.1 million.
It comes as an online petition signed by more than 500 people called on the council to say “how a £26 million project became a £60 million project”.
The petition calls on the council to “publish a clear and detailed breakdown explaining how costs increased”, to explain the key decisions behind the project’s financing and “commit to regular public reporting on the costs and progress of major council-funded projects”.
An impression showing how improvements at the front of York Station underway as part of the Station Gateway scheme could look
(Image: City of York Council)
Work on the Station Gateway project, revamping the area outside the entrance of York station, first began in 2023 with an original budget of £26 million.
But an audit has since ruled there had been “critical” weaknesses in the management of the scheme.
Veritau auditors found the council entered contracts for the works “at risk” before legal agreements had sufficiently progressed, with changes to the project later causing delays and pushing up costs.
It also found there were significant delays in reporting overspends on the project which stopped them being dealt with sooner.
The project was originally set to be finished by May last year.
Completed work outside York Station
(Image: City of York Council)
Issues have emerged since last year including more works being needed to strengthen York’s walls, the discovery of an underground Victorian water tank and delays in moving an electricity substation.
Most of the £5.4 million overspend racked up since last year is set to be covered using cash unspent on other transport projects, according to council officials.
Council says more cost increases are 'far less likely to happen' after it 'strengthened governance arrangements'
City of York Council said the Station Gateway scheme has been a “hugely complex project to deliver”.
A council spokesperson said aspects of the scheme outside the local authority’s control, such as unmapped utilities and inflationary pressures, have “impacted both the cost and delivery of the scheme, while others have been detailed in audit and other council reports, including making improvements to the original design”.
“Following last year's changes to the scheme’s overall budget and an independent audit, as well as cross-party scrutiny by a council committee, we have strengthened governance arrangements for current and future major projects, with all of the audit's recommendations now adopted, meaning cost increases are far less likely to happen.
“The highways elements of the Station Gateway scheme are now in their final stage and we continue to work with our partners to complete them. Once complete, the Station Gateway scheme will have a transformative effect on the area in front of the station, with dedicated cycle lanes, modern new bus stops and quality public spaces, all with the incredible backdrop of part of the city walls revealed for the first time in decades.”
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The Labour council’s executive member for finance and major projects, Cllr Katie Lomas, previously said the scheme, which began life under the previous Liberal Democrat and Green administration, was an example of inheriting the bad with the good.
Responding to the petition, Cllr Lomas said: “The formal contract for Station Gateway was issued under the previous administration in April 2023, before being signed and later returned, and early contractor involvement was formally approved by a senior council officer, under delegation from the Liberal Democrat-Green executive, also in April 2023.
“Cllr Douglas as council leader requested an audit of major project governance and financial controls following concerns about how they functioned in the council. Since that time, we have embraced the findings of the independent audit and cross party scrutiny committee and implemented their recommendations, to reduce the risk of any reoccurrence.”
The Liberal Democrat’s finance spokesperson, Cllr Paul Healey, has said the overspend was not merely down to engineering challenges and called for Cllr Lomas to resign following the delays.
“Labour chose to change the design without properly understanding the consequences and failed to ensure there was professional oversight of the project,” Cllr Healey said.
“Those decisions helped create the conditions for repeated delays and repeated cost increases.
“Leadership means taking responsibility when things go wrong, and confidence in Cllr Lomas’ stewardship has been lost.”
Cllr Lomas said what the Labour administration found with the Station Gateway scheme when it inherited the project “was staggering”.
“We have sorted out the mess and ensured the scheme is being properly project managed, unfortunately that doesn’t alter the impact of a badly-procured contract lasting years after it was originally approved,” Cllr Lomas said.
“Residents are rightly frustrated by this overspend and so am I, but there’ll be no repeat with any schemes launched under this Labour administration.”