Proposals to close an £18.5 million shortfall facing York’s Station Gateway project have been approved – but Government funding for dualling the Outer Ring Road does not go beyond £25 million previously pledged.
City of York Council’s executive heard the Government had confirmed £25 million for the A1237 scheme still remained following a review, after announcing backing from a £92bn infrastructure fund on Tuesday, 8 July.
The council’s Labour deputy leader Cllr Pete Kilbane said the Government’s review meant there was now real money behind the scheme, which was among those previously backed by unfunded pledges.
But Liberal Democrat leader Cllr Nigel Ayre said clarity was needed on funding and called for work on the scheme to begin at pace to avoid further cost increases.
It comes as the estimated cost of the Outer Ring Road has risen to £164 million from £66.4 million when it was approved in 2024 due to inflation and other factors.
Proposals approved by the executive on Tuesday (15 July) are set to see the works carried out in four phases, with the first focusing on works at the Clifton Moor roundabout.
Later phases will prioritise works that will bring forward sites where up to 3,557 new homes are set to be built while the council seeks further funding for the scheme.
The council has said it remains committed to completing the whole project including dualling the road between the A19 and Little Hopgrove roundabout.
The Government announced money from the £92bn pot for road and rail upgrades would fund some of the Outer Ring Road dualling during its first phase.
The Department for Transport said it was yet to confirm the amount allocated to the Outer Ring Road after being asked by the Local Democracy Reporting Service (LDRS) following the announcement.
The executive heard the Government had since confirmed the announcement referred to the £25 million that was pledged by the previous Conservative Government.
That funding was put on hold by the Labour Government last year as part of a wider review into what it said was a £22bn black hole in national finances.
Tuesday’s executive meeting also saw proposals to transfer £5 million allocated to the Outer Ring Road to help close the £18.5 million gap in funding for the Station Gateway scheme.
A council report on the plans stated they expect to recoup the funding from future developer contributions.
Money for the Castle Mills Bridge scheme is also being diverted, with the amount going to the regeneration of the area at the front of York Station totalling £14.55 million.
More than £3.9 million from York and North Yorkshire’s Combined Authority is set to be used to close the rest of the gap.
The project has faced construction and energy cost inflation, a roughly year-long delay and has been affected by contractual arrangements.
The council’s Labour finance spokesperson Cllr Katie Lomas said officials were looking into a £2 million to £3 million figure given for changes relating to accessibility.
It came after activist Flick Williams said York’s Disability Forum took issue with the way the figures had been presented and claimed the finished scheme would remain inaccessible for many.
Cllr Lomas said previous administrations had not prioritised those elements of the scheme, adding the Labour administration had sought to learn from the way the project had been handled.
The finance executive member said: “This will be an integrated transport hub and the bus loop at the front of the station will help reduce congestion in the city centre.
“It will be the gateway to our city and region.”
Council deputy leader Cllr Kilbane said the projects came alongside ongoing progress on the York Central development and confirmation that previously under-review funding for Haxby Station was going ahead.
The deputy leader said: “What’s happening in York is really exciting.
“The cost of dualling the Outer Ring Road had gone beyond the current budget, the Government was looking at the funding we’d asked for and it’s fully funded it.
“York Outer MP Luke Charters and Mayor David Skaith have worked tirelessly to get that funding.”
Liberal Democrat opposition leader Cllr Ayre said the Outer Ring Road was vital but added the details of the Station Gateway scheme had been drawn up by council officers.
The opposition leader said: “The failure to get on and deliver the Outer Ring Road has led to huge cost overruns.
“We’ve previously made the case that phasing the scheme is death by a thousand cuts and should be avoided at all costs.
“We need to get on and deliver the full scheme now.”