GCP responds as inflation continues to impact construction costs

The Greater Cambridge Partnership (GCP) is facing tough decisions in the face of staggering inflation levels.

With the cost of construction materials up by over 40 percent, the GCP is having to re-evaluate its programme priorities as the total programme costs rise beyond levels of government grant and other income.

In the last two years, many people have felt the impact of higher rates of inflation as issues at home and abroad, including the Covid-19 pandemic and the ongoing war in Ukraine, have driven prices up.

Officers at the GCP have been analysing the impact of rising inflation and growing construction costs to understand their impact on its transport schemes. This is a national issue with many examples across the country of infrastructure schemes being dialled back or paused as a result of staggering levels of inflation.

To respond to these national issues, the Joint Assembly and Executive Board will be presented with analysis that highlights the impact of inflation on the GCP’s programme.

It shows costs have increased by 20% – 30% and, as a result, members will be asked to consider the GCP’s Future Investment Strategy and whether two projects should be paused whilst opportunities for additional income are sought. These are:

• Phase two of the Cambridge South East Transport project – a new dedicated busway and active travel route connecting Cambridge with communities to the south-east of the city. The GCP will continue to deliver its planned improvements along the A1307 as part of phase one.
• Foxton Travel Hub – a site for 200 car parking spaces and 150 cycle spaces to enable people travelling along the A10 to the south of the city to switch from their car to train, a bus or their bike.

Rachel Stopard, Chief Executive of the GCP, said:

“Inflation and the impact it’s had on the price of goods and services has had a massive effect on the lives of us all – from the weekly shop to the cost of powering our homes, we have all felt the impact.

“Public and private sector organisations have also felt these financial pressures and across the country, budgets of major infrastructure projects have been crippled by soaring costs of materials and labour.

“Unfortunately, the GCP’s programme is not immune to these rising costs which is why we have spent the last few months scrutinising our budgets. We now face some tough decisions and will need to prioritise some of our transformative transport projects to ensure our communities realise the benefit of the City Deal.

“We are recommending to our members to pause phase two of the Cambridge South East Transport project and the Foxton Travel Hub. This was an incredibly difficult recommendation to put forward given the increasing congestion on the Cambridge Biomedical Campus combined with the ambition for future growth contained in the government’s recent ‘Cambridge 2040’ announcement.

“However, we need to make decisions based on the highest levels of certainty and that is why we propose to progress these schemes as far as we can so as and when more detailed growth plans and additional funding streams become available, they are ready to go.”

Under the proposals outlined in a paper to the Joint Assembly, the GCP would develop both schemes to a planning stage and work with partners to unlock new funding to deliver them in the future.

The Future Investment Strategy paper to the Joint Assembly can be found on Cambridgeshire County Council's website.