A £23 million hike in construction costs has forced Dundee City Council to revise its spending on major capital projects.
Dundee councillors will meet to discuss a rethink on £382 million of investment spending decided at the start of the year.
The local authority says the “fast-moving financial environment, driven by national and international events” has prompted the urgent fiscal review.
It’s not yet clear what construction projects will be affected.
But council leader, Councillor John Alexander, has said the building of the East End Community Campus and new primary school in the Western Gateway will still go ahead.
30% rise in costs forces rethink
Mr Alexander will chair the policy and resources committee tasked with facing the facts and agreeing a way ahead on Monday.
Investment on construction projects across the city amounting to £382m was agreed for the 2023-2028 capital plan in January.
But Mr Alexander says prices of tenders for projects are now “30% above” expectations meaning that the existing plan is not deliverable.
The local authority points to “Covid, Brexit and war in Ukraine” as big picture factors behind the current economic turmoil.
Coupled with these are “a significant increase in construction inflation driven by shortages in the supply of materials and labour and the cost of energy.”
‘Plan could not be delivered’
Mr Alexander said: “Even since the plan was agreed in January, we have seen tenders for projects coming back at prices around 30% above what was expected and obviously that means the current plan could not be delivered within the resources available to us.”
He added: “After a detailed review we would need an extra £23.6 million to deliver the plan.
“What is being proposed is that we focus the resources we have on our priorities including sustainability and critical building projects such as the construction of new schools at the Western Gateway and the East End Community campus.”
Recently £86.8m was allocated for the new East End Community Campus for Braeview and Craigie High schools.
A bid for funding from the Scottish Government for partnered support landed £17 million.
This is now included in the revised Capital Plan for the development of a new primary school at the Western Gateway.
An additional £5.4 million, fully funded by Perth & Kinross Council, is allocated for the development of an extension to the south side of Harris Academy.
A fifth of the council’s capital plan is committed to measures for improving Dundee’s carbon footprint, with £96 million for investment in delivering on its net zero target.
The council says most of its capital programme for the next five years, will be spent on projects to reduce child poverty and inequalities in incomes, education and health.
The online meeting of the policy and resources committee will be held at 5pm, Monday.
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