Soaring costs send Fife Council flagship projects ‘significantly’ over budget

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A number of Fife Council’s flagship building projects are likely to run significantly over budget, finance chiefs have warned.

Cost estimates have revealed the region’s 10-year capital investment plan is currently heading for a £14.8 million shortfall for a variety of reasons - ranging from spiralling construction costs to unforeseen problems.

The biggest potential overspend relates to the proposed new Dunfermline Learning Campus, the price tag for which has now jumped by £11.1 million to just over £122 million.

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That increase has been put down to the impact of construction inflation and the need to design the building to net zero standards.

Fife CouncilFife Council
Fife Council

But other ‘big ticket’ projects are also heading for sizeable overspends, such as the region’s care home replacement programme and work to replace the Leven Railway Bridge.

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With the region still reeling from the impact of COVID-19 and Brexit, Elaine Muir, head of finance at Fife Council, admitted that the level of slippage was likely to get worse before it gets better in the short-term at least.

“There continues to be a risk across the Capital Investment Plan that both the timing and the costs of projects may be adversely affected as a result of the current economic climate following the response to COVID-19 and Brexit,” she explained.

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“Throughout the programme, issues are continuing to be identified in relation to the supply of construction materials which are resulting in delays to projects which, in turn, could lead to increased slippage and increased costs.

“However, the overall impact of this is difficult to predict with any degree of certainty and the forecasts for 2021-22 relate in the main to projects that are currently in progress with contracts that are already agreed.

“That said, monitoring of the impact of any additional costs, impact on timescales and associated risks is ongoing.”

Councillors on Fife’s policy and co-ordination committee heard how the estimated cost of construction for care home replacements at Methil, Cupar and Anstruther were likely to exceed the budget initially allocated.

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Around £19.3 million was set aside for all three facilities, but the anticipated total spend is expected to be nearer the £23 million mark.

The projected cost over-run for Cupar is currently £1.279m, largely due to construction costs increases as a result of arsenic contamination removal and enhanced drainage works, while that in turn will have a knock-on effect on the Anstruther facility.

Meanwhile, members also heard how the scope of the Leven Railway Bridge project has “increased considerably beyond that originally expected” and now needs new abutments, raised parapets over the proposed railway line, extensive public utility diversions and infrastructure for local traffic diversions.

And all of that is likely to cost at least £5.7 million more than budgeted, although a business case will be brought to a future policy and co-ordination committee.

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Ms Muir said all options are being explored to mitigate the cost increases, while all funding options are also being investigated to help pay for all the projects detailed in the programme through to 2031.

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