The Assistant Director for Highways & Infrastructure presented a report of the Director of Neighbourhoods which detailed the procurement process relating to the construction contract of the West Kirby Flood Alleviation Scheme and project costs associated with the scheme, following a referral from the Environment, Climate Emergency & Transport Committee in March 2023 for the Audit and Risk Management Committee to consider concerns relating to the procurement of project and increased costs.

The Assistant Director outlined that the main construction contract final account had now been settled, with the full project costs set out within the report. It was reported that the main contract for the scheme was procured through the Environment Agency Collaborative Delivery Framework (CDF) which was considered to have provided several benefits including commercially tested value for money, a faster route to market collaborative working and contract efficiencies.

Addressing the project costs associated with the scheme, it was reported that overall costs had increased from £11.5m to £19.7m. The factors behind the increase in costs were outlined, relating primarily to differences in ground conditions from predictions, accommodation work for the Royal National Lifeboat Institution (RNLI), improved opening flood gates and inflationary price increases as a result of the global macroeconomic climate. Members were informed that all additional costs had been met from additional grants in aid from the Environment Agency secured through a rigorous business case approval process.

It was further reported that a final Audit of the project grant funding had been undertaken by Department for Environment, Food & Rural Affairs (DEFRA) who were reassured of the legitimacy of the requirement for 5 major variations over the lifetime of the project.

Members discussed the procurement of the contract and factors behind increases in cost in detail. In response to queries, representatives from the Environment Agency and the Department for Environment, Food & Rural Affairs (DEFRA) in attendance provided assurance that the procurement process through the CDF framework was considered the most appropriate route to market for delivery of a project of this scale.

Whilst Members noted residual concerns relating to public engagement and the impact on business during the lifetime of the project, Members were assured by the scrutiny undertaken by DEFRA and the Environmental Agency. It was therefore

Resolved – That:

1. After considering the report to the Environment, Climate Emergency and Transport Committee on 14 March 2023 concerning the West Kirby Flood Alleviation Scheme; and

2. The Background to the procurement of the contract and the reasons for the increases in costs of the project presented to the Committee,

3. On the available evidence Committee is satisfied that the contracts for West Kirby flood defence works were procured in accordance with the law and administered in accordance with the requirements of those contracts.