Chelmsford bypass project facing ‘significant budget’ issues

A ‘way through’ is being developed to meet ‘significant budget’ issues facing the planned north east Chelmsford bypass project.

The new road project may now have to be “decoupled” from plans for a new railway station in Chelmsford to ensure the railway station work is secured – a £218million package from the Government was predicated on both elements being delivered together.

While the station work is progressing smoothly – construction work is set to start in March 2023 – the Chelmsford North East Bypass is not progressing as planned as there is a budget deficit which needs to be bridged if the works are to progress.

In light of the risk this poses to the Housing Infrastructure Funding of £218m secured to support delivery of the project in its entirety – and to ensure a new station at Beaulieu remains on track – Essex County Council are currently engaging with Homes England regarding the possibility of decoupling the two projects.

If agreed, this would allow the station project to progress regardless of the status of the Chelmsford North East Bypass project.

But there have been “encouraging” discussions between Essex County Council and Chelmsford City Council to use future housing receipts to bridge the current budget gap.

The HIF funding secured by Essex County Council for Beaulieu Park Station and for Chelmsford North East Bypass was agreed so if one of the projects fails the total HIF allocation will be lost and any expenditure incurred to date can be clawed back by Homes England.

South East Local Enterprise Partnership (SELEP), which has contributed £12m has heard “there are currently significant budget and timing issues associated with the Chelmsford North East Bypass project which if not addressed ensuring delivery represents a default on the agreed contract terms”.

If Essex County Council were unable to source alternative funding, meaning that the project could not be delivered in accordance with the agreed terms, SELEP would seek the return of the £12m allocation. Essex County Council says it is “committed to constructing the project but would not be able to continue without HIF and SELEP funding in place”.

Gary MacDonnell, a programme manager for Essex County Council’s highways and infrastructure capital programme, told SELEP last week: “We’re in a joint contract to deliver two pieces of infrastructure – the station and the northeast bypass.

“There are issues with the bypass, particularly around the budgets. There is a slight program issue as well although that feels more easily resolved. So in theory by not delivering both pieces of infrastructure we could have issues.

“We remain utterly committed to delivering both. We’ve had a lot of positive discussions with Chelmsford City Council and I think that we have a way through that will allow us to deliver the full scope of the Chelmsford North East Bypass and a way of meeting that budget gap.”

Leader of Chelmsford City Council Stephen Robinson warned if the road were not to happen that would undermine the whole allocation of the garden community – the north east Chelmsford area is expected to deliver significant housing and development growth, including in the future Chelmsford garden community and residential developments in Broomfield and Great Leighs, and in nearby Braintree District.

It is expected that the proposed bypass and the future Beaulieu Railway Station will help unlock approximately 9,000 new homes in this area up to 2036, and provide the potential for a further 5,000 new homes in the longer term.

He said: “That planning allocation was approved by the inspector on the basis the bypass would go ahead. If it didn’t it would undermine the justification for that allocation.”

An Essex Highways spokesperson said: “Essex Highways is working with Chelmsford City Council, developers and Homes England to find ways of bridging the estimated funding gap that has arisen primarily as a result of inflationary pressures in the construction industry.

“We are extremely confident that we have identified a way forward that will allow all infrastructure associated with our award for Housing Infrastructure Funding to be built out but cannot, at this stage, provide further details due to ongoing commercial discussions with all partners.”


Piers Meyler

Local Democracy Reporter