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PURPOSE

Allocating the GCP’s resources in the right way is key to ensuring the GCP achieves its objectives and unlocks future funding from government and elsewhere to secure the infrastructure improvements GCP needs to support its local plans, ensure economic growth and continued quality of life. The Future Investment Strategy which develops the longer term resourcing strategy is also on this agenda for the Joint Assembly’s consideration. This report focuses on the Tranche 1 resources and the first call on the next phase of resources required to complete the existing GCP planned programme and future investments.

 This report takes forward the GCP Financial Strategy (approved in November 2016) and the GCP Budget Setting 2017/18 (approved in March 2017). The Financial Strategy developed a structured framework within which the GCP Board would identify the resources at its disposal and a financial governance framework to ensure that resources are used effectively.

 The GCP has a “gainshare” agreement to unlock further government funding for the infrastructure our region needs, it must demonstrate that it can deliver agreed projects on track and on budget, achieve the anticipated benefits, and, in the longer term, have prioritised investments that produce additional economic growth in Greater Cambridge.

The Joint Assembly is asked to comment on the proposed allocation of resources as detailed in Appendix A below, in particular where scheme proposals and estimated total costs have changed since the budgets were last approved in March 2017.

KEY ISSUES AND CONSIDERATIONS

The Table below details the previously approved funding, the updated funding required, and the difference (the proposed increase in funding). Since last year’s Budget Setting paper, there has been some movement of schemes between the Infrastructure Programme Budget and the Operational Investment Budget to better reflect the nature of the schemes.

Detailed below is the explanation for where proposed schemes costs have materially changed since the last budget-setting process. Some of the changes are as a result of decisions that have been made by the Executive Board in the last financial year. It has been possible to incorporate many of these increases into the current budgets, but there are a few exceptions which it has been necessary to request a slight increase on previously agreed funding profiles.

INFRASTRUCTURE PROGRAMME BUDGET

  • Cross-City Cycling Improvements: Increase from £8m to £8.9m over the next three financial years through to 2021 due to some redesign work and related increased staff and consultancy costs. The failure to secure some private land in Fulbourn Road has meant some re-design of the scheme. In the early stages of works mobilisation in Arbury Road and Fulbourn Road there were a range of issues that needed resolving relating to hedging, trees, parking and traffic management arrangements.
  • A1307 Corridor: Increase from £39m to c£140m profile for up to 2022 and beyond. For presentational purposes the higher cost option is reflected in the tables but no decision has yet been made. If the lower cost option (£48.2m) is taken forward overall commitments will reduce by £92.9m. In March 2017, the Executive Board agreed to develop options with the Local Liaison Forum which resulted in additional options, but also the re-introduction of an option for an off-highway route that had previously been discarded on the basis it was unaffordable within the £39m. In November 2017 the Executive Board approved public consultation on three strategies with an estimated cost ranging up to £145m.  Note that costs have been estimated for a non-guided, busway solution.  For an optically guided metro solution the infrastructure costs are (subject to further work) assumed similar, but do not include vehicle costs or any contribution to network costs of a metro solution such as depot, control systems etc. Equally, the Mayor is working to identify alternative funding sources for the CAM Metro.
  • Chisholm Trail Cycle Links: Increase from £8.4m to £9.3m over the next three financial years through to 2021 for reasons relating to the planning process for Phase 1 and that the procurement process has been much lengthier than anticipated and as a result meant some increased costs.
  • Travel Hubs: Increase from £100K to £700K for the financial year 2019/2020. In March 2017, the Executive Board approved £100,000 for feasibility and conceptual work in relation to the development of Rural Travel Hubs. This has been used to contract Skanska to complete the initial feasibility study and resulting report and to start on some detailed design and planning for any identified pilot schemes.  The increase in budget (subject to decisions made by the Executive Board) is to pay for the progression of Sawston and Oakington as pilot sites.
  • City Centre Access Project: Increase from £8.0m to £9.6m over the next two financial years through to 2010. This is to reflect the decision made by the Executive Board in November 2017 to fund 50% of the lost annual income resulting from the removal of the £1 parking charge at Park & Ride sites in the GCP area for 3 years, equating to £531k pa and with a review at the end of 2019/2020.

OPERATIONAL INVESTMENT BUDGET  

  • Programme Management: Increase of £91K in 18/19 and 19/20 over two financial years to reflect part of the costs of the GCP Chief Executive who has now been appointed on a 2-year substantive contract from 1st April 2018. Although this costs less than the previous interim arrangements, additional funding is required because previously an element of one-off funding had been allocated.
  • Evidence, Economic Assessment and Modelling: Increase from £40K to £590K over the next two financial years. It is important that the GCP is able to clearly evidence additionality and growth, not only to meet external scrutiny such as the Gateway Reviews, but also to assure itself that the investments it is making are the right ones. It also needs to be placed to quickly respond to external requests for information and significant reports, for example the National Infrastructure Commission and the Cambridgeshire and Peterborough Independent Economic Review. As such the GCP needs to invest strategically in being able to evidence and model additional growth.
  • The additional budget would allow for include further Paramics modelling as conducted by the University of Cambridge to support the Future Investment Strategy, as well as enable the procurement of additional and / or external capacity to respond to short notice requests. We are also required to fund the work of SQW, the consultants appointed by Government to run the National Evaluation Panel (related to the Gateway Reviews) which evaluates the impact of the locally-appraised interventions on economic growth. The Executive Board agreed in July 2017 to bear the required cost of £70k for the first phases of their work in the current financial year and we have just received the costs for the next two financial years (circa £300k), and so are requesting a further £230k over the next two financial year.

FUNDING ASSUMPTIONS

  • The overall funding assumptions (reflecting the City Deal Grant, S106 developer contributions, New Homes Bonus and Interest) have not significantly changed since last year, although the Final Allocations of New Homes Bonus 2018/19 have now been published by the Ministry of the Housing, Communities and Local Government and are now reported and the interest estimates have been updated.
  • The S106 estimated profile assumes S106 receipt of £44.5m and to date £27.8m has been agreed, although some of it depends on being matched against applicable GPC schemes, and this will not be known until the detail of the GCP schemes are finalised. The estimated residual amount of S106 receipts (£16.7m) will come from both major Growth Site S106 contributions and the smaller site contributions to be agreed over the next few years. The estimated profile can be seen in Appendix 1A below.

NEW HOMES BONUS POSITION

The current GCP position on New Homes Bonus assumes the below contributions.

NHB

15/16

16/17

17/18

18/19

19/20

 

£K

£K

£K

£K

£K

Cambridge City

1,986

3,166

2,385

2,238

2,039

South Cambs

1,683

2,633

1,570

1,204

1,272

CCC

917

1,485

1,023

860

726

TOTAL

4,586

7,284

4,978

4,302

4,037

APPROACH TO FUNDING SHORTFALL

  • The current profiled costs and funding across all the Tranche 1 schemes identify a shortfall of £111m (or £18.5m if the lower-cost option for A1307 corridor is taken forward), which will be funded from a first call on the next phase of the City Deal grant funding. Given that the majority of the scheme expenditure occurs in the later years, it is considered appropriate to develop Tranche 1 on the assumption that future funding is released.
  • This approach was considered reasonable to ensure schemes were developed to ensure the release of future tranches of funding. If for any reason the next phase of City Deal grant funding is not released to GCP, there may be other funding streams the GCP can call upon, or as a very last resort some of the schemes will be refined to ensure that their budgets meet available resources.

 

 

Infrastructure Programme Investment Budget

Previously Approved Funding

Updated Funding Required

Increase in Funding

Actual Spend 2015/16

Actual Spend 2016/17

Forecast Spend 2017/18

Budget 2018/19

Budget 2019/20

Budget 2020/21

Budget 2021/22

Future Years

£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

Milton Road bus priority

23,040

23,040

0

188

238

340

800

10,786

10,688

 

 

Histon Road bus priority

4,280

4,280

0

199

181

120

150

400

1,639

1,591

 

A428 Madingley Mulch to Grange Road segregated bus route including Park & Ride bus priority - Tranche 1 development/delivery

55,640

55,640

0

268

1,485

1,300

2,900

3,000

46,687

 

 

A428 Cambourne to Madingley Mulch segregated bus priority - Tranche 2 development

3,400

3,400

0

 

 

 

 

 

3,400

 

 

Cross-city cycle improvements

8,000

8,934

934

257

864

2,800

4,500

513

 

 

 

Cambridge South East Transport Study (formally known as A1307)

39,000

141,082

102,082

157

175

600

1,150

2,300

36,700

50,000

50,000

Chisholm Trail cycle links

8,400

9,269

869

235

679

825

5,320

2,000

210

 

 

Programme management and early scheme development

3,200

3,200

0

355

781

464

800

800

 

 

 

Western Orbital

5,900

5,900

0

240

416

600

600

600

3,444

 

 

Ely to Cambridge Transport Study

2,600

2,600

0

67

72

550

733

1,178

 

 

 

A10 Cycle route - Frog End Melbourn

550

553

3

 

511

43

 

 

 

 

 

City Centre Access Project

8,045

9,638

1,593

255

566

1,400

3,995

2,891

531

 

 

Electric Vehicle Charging

100

100

0

 

 

25

25

25

25

 

 

City Centre spaces & movement

150

150

0

 

 

30

120

 

 

 

 

Developing 12 cycling greenways

480

500

20

 

 

200

300

 

 

 

 

Travel Hubs

100

700

600

 

 

25

75

600 

 

 

Travel Audit - South Station and biomedical campus

150

150

0

 

 

58

92

0

 

 

 

Residents Parking implementation

1,000

1,191

191

 

 

72

219

392

508

 

 

Cambridge South Station

1,750

1,750

0

 

 

100

825

825

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

165,785

272,077

106,292

2,221

5,968

9,551

22,604

26,310

103,832

51,591

50,000

Funding

City Deal grant

100,000

100,000

 

20,000

20,000

20,000

20,000

20,000

 

 

 

S106 contributions

44,500

44,500

 

 

7,874

2,000

2,000

2,000

4,000

26,626

Total funding

144,500

144,500

 

20,000

20,000

27,874

22,000

22,000

2,000

4,000

26,626

Net Infrastructure Budget

-21,285

-127,577

 

17,779

14,032

18,323

-604

-2,810

-101,832

-47,591

-23,374

Operational Investment Budget

 

Funding Agreed

Updated Funding Required

Increase in Funding

Actual Spend 2015/16

Actual Spend 2016/17

Forecast Spend 2017/18

Budget 2018/19

Budget 2019/20

Budget 2020/21

Budget 2021/22

Future Years

£000

£000

 

£000

£000

£000

£000

£000

£000

£000

£000

Programme Management

2,211

2,394

183

111

391

604

644

644

 

 

 

Engagement & Communications

339

339

0

 

 

283

56

 

 

 

 

Skills

2,907

2,907

0

47

188

201

1,231

1,240

 

 

 

Evidence, economic assessment and modelling

40

590

550

 

 

30

280

280

 

 

 

Cambridge Promotions Agency

150

150

0

60

90

0

 

 

 

 

 

Housing Delivery Agency

400

400

0

 

200

200

 

 

 

 

 

Affordable Housing

50

70

20

 

10

25

35

 

 

 

 

Cambridgeshire County Council costs

93

93

0

 

 

31

31

31

 

 

 

South Cambridgeshire District Council costs

120

120

0

 

 

40

40

40

 

 

 

Cambridge Promotions

40

40

0

 

 

40

 

 

 

 

 

Towards 2050

230

230

0

 

 

57

143

30

 

 

 

Smart Cambridge

2,270

2,270

0

 

271

1009

650

340

 

 

 

Total

8,850

9,603

753

218

1,150

2,520

3,110

2,605

0

 

 

FUNDING- NEW HOMES BONUS

 

 

 

 

 

 

 

 

 

 

 

NHB - Cambridge City

11,740

11,814

 

1,986

3,166

2,385

2,238

2,039

 

 

 

NHB - South Cambs

8,373

8,362

 

1,683

2,633

1,570

1,204

1,272

 

 

 

NHB - CCC

4,907

5,011

 

917

1,485

1,023

860

726

 

 

 

Interest accrued on grant funding

268

594

 

 

80

149

197

168

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total funding

25,288

25,781

 

4,586

7,364

5,127

4,499

4,205

0

 

 

Net Operational Budget

16,438

16,178

 

4,368

6,214

2,607

1,389

1,600

0