A review has been launched of all major Aberdeen projects amid fears “significant cost increases” could force the council to mothball facilities and raise prices.
Multi-million-pound projects – including a refresh of the city centre and plans to build thousands of new council homes – could be delayed or downsized as Town House chiefs try to trim the fat.
Supply chain issues were previously the cause of the high-profile, last-minute cancellation of the ‘soft opening’ of Union Terrace Gardens in April.
And now the same storm threatens many other massive developments on the council books – some planned to help lift Aberdeen out of the post-Covid doldrums.
Aberdeen council review will include multi-million-pound projects – including city centre and beach masterplan
The review will include the £150 million city centre and beach masterplan – promising a new market on a potentially pedestrianised Union Street.
A new-look seafront, with potential for a replacement Dons stadium, is also under the microscope.
The building of three new schools – already hit by these sort of delays – and thousands of council homes will also be looked at.
Staff will assess how close to completion projects are, as well as taking into account reasons behind the work, value for money, environmental worth and any commercial issues as part of the review.
Construction supply chain hit by ‘global factors’
Council bosses have blamed Covid, Brexit, skill shortages, 30-year-high inflation rates across the world and the war in Ukraine for their woes.
The Russian invasion has prompted shortages in many building supplies, hiking up the local authority’s bills.
Rising fuel costs, previous Covid site shutdowns and the end of red diesel fuel rebates have also played a part.
Liberal Democrat council co-leader Ian Yuill said: “Potentially delaying projects is not something we would undertake lightly so we welcome the report which will investigate options for what we can do to mitigate the current circumstances.”
Senior city officials have been given two months to review all agreed capital projects and the value for money they’ll bring at potentially higher costs.
External auditors will be brought in for their opinion on the plan they come up with.
How will Aberdeen council trim the fat on its capital projects?
By the end of August, a plan to mitigate the financial impact of “global external factors” will be brought forward.
Other options include delaying capital projects – or phasing openings – to avoid the short-term inflation and supply issues.
The council last year put aside an extra £25 million to cover contingencies after warnings about rising costs in its projects.
But chief capital officer John Wilson warned the council did not yet know how much it would have to pay its staff for the year, as national negotiations continue.
Uncertainty over the costs brought by winter – how extreme the weather is – should also be borne in mind, he said.
In a council report, Mr Wilson revealed the cost of the increases could land with citizens.
But, decisions on fee hikes and closures will be taken separately from this work to deal with supply chain issues, once the most recent financial figures are made available in August.
SNP finance convener Alex McLellan said: “During these unprecedented times, it is only right that we look at how to protect our council from huge rises in costs and other external risks.
“This should help to ensure we are in a strong position to deliver the services people will rely on in the coming months.”
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