In a statement made earlier today (Thursday) by Cabinet member for infrastructure and transport, Cllr Ian Ward, about Island Roads, there was one line that leapt out.
Cllr Ward referred to a 30 per cent reduction of the government grant for the 25 year highways PFI scheme.
He said
“Although the plan was for all our roads to be resurfaced, this changed when government funding for the highways PFI project was reduced by 30 per cent in 2010.”
We dug back through OnTheWight’s PFI archives to trace when the cut was made.
How the reduction came about
In 2011 the situation was succinctly laid out by retired-journalist, Mike Starke. He said
“The PFI bid started in 2006 with an estimate of £325m for the “grant” element (that’s the cash that goes straight to the PFI contractor, not to IW Council).
“Then Jay Jayasundara came along and produced a detailed Outline Business Case requiring a grant of £399m.
“Then the government, after its Comprehensive Spending Review last October [2010], said the IW scheme could only have £364m.”
More money removed
This figure was then reduced to £260m in March 2011 – announced in a council press release, which also stated:
Under the PFI scheme virtually all the Island’s 800 km of roads will be resurfaced and rebuilt where necessary; footways pavements, designated cycle routes, grass verges, CCTV networks, streetlights and street furniture upgraded, street lighting replaced with efficient LED lighting and upgraded roads maintained over the 25-year-life of the project.
Latitude for efficiency savings
The council said it could deliver the full scope of scheme to the new £260m budget. They said,
“This is largely because the scale project is so huge there is much latitude in which to make efficiency savings. Changes to the timing in which money is released by Government will also result in savings without altering the scope of work.”
What’s changed?
We’ve asked the council why Cllr Ward is saying the scope of work changed due to the reduction of grant in 2010, when they themselves in 2011 stated “virtually all the Island’s 800 km of roads will be resurfaced and rebuilt where necessary, etc” based on the news £260m grant.
We’ll update when we hear back.
You can read all articles relating to the PFI here.
