Questions ESCC needs to answer about Queensway Gateway project

Sea Change Sussex’s Queensway Gateway Road project is not due to come up at the South East Local Enterprise Partnership’s accountability board until March, but important questions have arisen for ESCC as to who is responsible for completing it and for paying for it. The council refuses to comment. Meanwhile another director has resigned from the Sea Change board. Nick Terdre reports.

The fate of the Queensway Gateway Road remains undecided ahead of the meeting of the South East Local Enterprise Partnership’s accountability board in March. (The board meets in late January but not to discuss Local Growth Fund (LGF) projects like this one).

Judging by the lack of progress at last year’s meetings, it would not be advisable to imagine that either the board or the public will be much better informed about when the road is likely to come into operation by the time of the next meeting.

That is down to East Sussex County Council, which, as the accountable body for grants and loans advanced to projects in its area, is responsible for keeping Selep informed on project progress and any problems which arise.

Indeed it is more likely that the outstanding technical arrangements, including a traffic regulation order, to be agreed between Sea Change Sussex, the contractor, East Sussex County Council, the scheme promotor, and the Highways Authority will be settled by then than key questions such as who is responsible for completing the road and who will pay for the final works.

And possibly the deep-dive investigation being conducted by the Department for Levelling Up, Housing and Communities into Sea Change projects funded by Selep and overseen by ESCC will be completed by then.

Until a few months ago it seemed clear enough that Sea Change was responsible for both finishing the road and providing the balance of £2m to pay for the work. Although the budget for the project had yo-yo’d wildly, from £15m when the business case was approved, down to £6m and then up to £12m, Sea Change had built most of the road, in the process spending £10m from Local Growth Fund monies made available by Selep.

Then its plan to build the final section connecting with Sedlescombe Road North (the A21) – over land occupied by the Bartlett car dealership just below The Ridge – ran into a brick wall, obliging the company to come up with the alternative plan of linking the road into Junction Road and installing traffic lights where Junction Road interconnects with the A21.

Alternative version

But in September last year Sea Change started putting out an alternative version of how things stood, concluding that it had fulfilled its undertakings on the project to ESCC, was not liable to fund the remaining works and would only undertake these if someone else came up with the funding.

ESCC owes both Selep and the public an explanation of where it stands, but its reports to Selep have virtually nothing to say about these matters, and in response to HOT’s detailed enquiries it merely responded: “We’re extremely keen to see completion of the Queensway Gateway Road and discussions are ongoing with Sea Change.”

Sea Change used a question to the accountability board in September to claim that it was not responsible for ESCC’s report to Selep in November 2015 that the budget had been reduced to £6m. “The reduced figure did not come from Sea Change Sussex and, contrary to what the Selep report says, Sea Change did not think the project could be delivered for £6m,” it told HOT in October.

Its argument is that the budget for the road in the business case was £15m, of which it has only received £10m. “The grant was intended to cover delivery of the whole project as laid out in the approved business case: a completed road for a total budget of £15m. Our grant agreement refers to that project and business case. We’ve so far received £10m of this funding and have completed works in line with this sum,” it said.

In October it further stated that: “Our grant agreement [with ESCC] requires us to complete the funded works — which we’ve done. It contains no obligation for us to deliver further elements of the project unless we enter into an additional agreement to do so, with funding to cover that.”

This raises questions about its contract with ESCC, which should mirror ESCC’s contract with Selep (or more specifically with Essex County Council which acts as the accountable body to Selep for supervising grants and loans made to Selep’s member councils): while ESCC is responsible to Selep for delivering the project in accordance with the business case, the contractor is responsible to ESCC for the same.

But when asked if its agreement with ESCC mirrored ESCC’s service level agreement with Essex County Council, Sea Change said it did not.

Serious implications

Sea Change’s claims have serious implications for ESCC. It would be in hot water, for example, if it had made a false report to Selep about the budget being reduced, especially as this was the basis for seeking to have the surplus grant monies transferred to another Sea Change project, the North Bexhill Access Road.

On this issue ESCC has previously told HOT: “We’re extremely keen to see completion of the Queensway Gateway Road and we have no reason to think partners have been given inaccurate information about the project.”

But it is hard to see how its report to Selep can be squared with Sea Change’s version of events.

Of course there is scepticism over Sea Change’s claims. Could it really have remained in ignorance of what was happening to the Queensway Gateway budget, and especially when in February 2018 ESCC reported to Selep that various costs had increased and the road would now cost £12m rather than £6m? After all, chief executive John Shaw was present at the meeting when this report was discussed.

On this occasion Selep agreed to transfer £4m from other LGF projects (including £3m from the Hastings and Bexhill Movement and Access Package). Of the balance of £2m, the agenda pack notes, “In addition, Sea Change East Sussex, as project delivery partners, will be contributing up to £2m to support the completion of the project.”

Of the company’s “contribution,” Sea Change’s version, as told to HOT, is that: “We offered, if needed, to provide £2m to bridge a cash flow gap in the funding, subject to certain conditions and on the understanding that it would be repaid from the total approved £15m funding when more monies became available.”

In September the ESCC report to the board started referring to the outstanding balance as “temporary contingency funding.” It neither flagged up the change nor explained what was meant by this phrase, but all parties understand that Sea Change’s position is that the £2m will not be coming from its coffers.

So Sea Change has provided its version of where the Queensway Gateway Road project stands, but what of ESCC? It has yet to account for itself.

Omissions

These matters are not raised in the ESCC officer’s update on the project for the accountability board’s November meeting, which, while going into extensive details on the travails to get the necessary technical approvals for completing the road, says of the funding issue only that: “Ongoing discussions between Sea Change Sussex and East Sussex County Council continue on the overall funding package and confirming the contractual position to be applied for the delivery of the connection to the A21,” and nothing on Sea Change’s position concerning the other matters.

As Helen Dyer, Selep’s capital programme manager commented, “The report does not provide a detailed update on the confirmed funding package and, as a result, does not provide any additional information in relation to the status of the Sea Change Sussex funding contribution which has been labelled as ‘temporary contingency funding’.”

This surely should have been a prompt for the accountability board to require accountability. Answers could have been required from board member Cllr Keith Glazier, the ESCC leader and vociferous champion of Sea Change’s work. But beyond acknowledging that the funding issue needed clarifying, the board showed no curiosity in seeking to clarify why Sea Change was putting forward its alternative narrative and what this implied for the integrity of ESCC’s reporting to Selep.

Perhaps they are awaiting the results of the audit that Selep chief executive Adam Bryan told a questioner in September would be conducted into projects which have received funding through the partnership’s capital programme.

If Selep is unable or unwilling to throw light on ESCC’s dealings with Sea Change, it will be up to the council’s Place Scrutiny Committee when it meets to consider this matter on 28 March.

ESCC taxpayers deserve a response from their council. £10m may be at stake – the value of the grant that would have to be returned to government if the road is not completed in accordance with the terms of the its approval. If the liability does not lie with Sea Change, as the company asserts, it would fall to ESCC to repay it, at its taxpayers’ expense.

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