Increased costs of around £27m mean that constructing a southern leg of Melton Mowbray Distributor Road isn’t viable at the moment, a new report says.
Leicestershire County Council is having to step back from building the road and unable to take up the Government’s Housing Infrastructure Fund (HIF) grant, but will continue to work with Melton Borough Council and other stakeholders on alternative options to deliver new homes and jobs and secure infrastructure.
Government agency Homes England (HE) had offered the council an £18.2m HIF grant which was conditional on the southern stretch being fully funded. Despite extensive dialogue with HE, it has not been possible to find an alternative way forward.
Growing construction costs, plus inflation, have hiked the cost of the £43m scheme up to £70m and under the terms of the Government funding, the council would have been required to fund the gap of £27m.
We've bent over backwards trying to identify alternative funding methods and lobbied Government for more money to help us get the southern leg over the line. We've simply exhausted all avenues and cannot afford to build it at this point in time, given our cost pressures and inflation.
Construction of the north and eastern leg is well underway and one of the biggest road schemes we’ve ever built. Given the amount of work put in on the southern stretch to date, we would be in a good position to bid for money to support this project at a later date.
Creating much-needed new homes, along with the schools and roads communities need, remains a top priority. We’re committed to working with Melton Borough Council, MPs and other stakeholders now and in the future, to secure cash and deliver their local plan.
Person:Nick Rushton, Leader of Leicestershire County Council
Like other local authorities, the council is facing increasing financial pressure with inflation, the National Living Wage and spiralling social care costs set to drive up its budget shortfall to over £100m by 2027.
Work to build the northern and eastern leg got underway earlier this year. The ground has been levelled and drains and fencing put in for the new 7.1km road which is on track to open in late 2025.
The council’s cabinet will discuss the update next Tuesday (24 October) – watch online.