Upper Orwell Crossings: Who Is Paying For It?

Discussion in 'Upper Orwell Crossings' started by dan5, Jul 22, 2017.

  1. dan5

    dan5Founder MemberStaff Member

    Messages:
    2,351
    It is a major infrastructure project for Suffolk & Ipswich, so it is highly likely costs will only rise (especially with opposition against the bridges which is likely to push back the timescales).

    No one is giving exact figures - using initial publicly revealed figures of £77m from the Department for Transport - and £20m contribution from Suffolk County Council. The DfT figure has been quoted as various different amounts including £80m which might simply be £77m rounded up (what is £3m in public sector efficiency?!)

    Already pre-election the cost of the Upper Orwell Crossings had been estimated at £100m by Ben Gummer.

    With hints by various parties that the Department for Transport would cover increases with the provisionally allocated amounts being "flexible" this is nothing short than complete nonsense. The central government monies is a fixed amount - this may be topped up by political decision - but as far as known there is no mechanism which gives guarantees that central government will cover the rising costs of the Upper Orwell Crossings project.

    What we do know is Suffolk County Council has underwritten costs for the Upper Orwell Crossings including through Ipswich Borough Council contribution. What this entails is Suffolk County Council being responsible for all rising costs of this project. Suffolk County Council will ensure county council taxpayers do not fork the entire bill... this will mean Ipswich Borough Council holding a significant burden (you could argue this is fair as they are the local authority).

    This will be counter-intuitive as imposing an Community Infrastructure Levy on new developments over a certain development size will not boost regeneration.

    The reason why the Wet Dock Crossing concept became the Upper Orwell Crossings was MP at the time Ben Gummer looked for an alternative finance source to an CIL on developments. His buddies didn't want to pay a CIL of £90 per sq metre for residential and £55.29 per square metre for retail. (You might be interested to learn student accommodation, hotels, offices and community uses are exempt from the Community Infrastructure Levy - pretty much most of the development types in Ipswich!)

    In addition to CIL funding, we assume they will utilise some of the local business rates (similar to how they funded the Northern Route Study), get a one off contribution from the LEP, allocate some of Ipswich council tax towards it (through an increase, if only slight)... how will this work in real terms?

    For argument sake... the project ends up costing £130m (which wouldn't be too bad)
    £77m from central government (DfT)
    £20m from SCC
    £2m from LEP (very optimistic)

    I make this £99m - a shortfall of £31m... It is unlikely the construction firms etc. will take a "rain check" and would cease work if funds dry up. The only way they could make this work is by borrowing money! I would assume with the increased austerity measures, at a push SCC could reallocate a further £10m of their reserves to this project - making it £30m - this leaves £21m needed to borrow.

    With weak leadership at the borough council they could comfortably be persuaded into dipping into their reserves to the tune of £15m to rescue the project (half of SCC's contribution). This still leaves £6m to be found elsewhere with assumption of interest paid on borrowed amounts. They would hope to recoup this through CIL, council tax and business rates over a number of years.

    Upper Orwell Crossings, who is paying for it? YOU ARE! We all are.
     

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