York to shuffle transport funding as project costs soar

The city council’s executive will be asked to sign off reallocated cash to keep the station gateway renewal on track, while opening up housing areas will determine delivery of outer ring road upgrades.

City of York Council’s executive is due to meet on 15 July, and will hear a report updating members on the progress of the schemes.

Members are asked to approve next steps for both schemes: in the case of York Station Gateway the recommended option is completing the approved scheme currently on site, and agreeing to an additional funding allocation of £18m, made-up of reallocated funding from external grant providers.

For York Outer Ring Road – rather than shelve the scheme or deliver a value-engineered iteration, members are asked to agree that the scheme should be delivered in four phases, prioritising available funding to the local plan infrastructure requirements, unlocking key development sites and providing much needed new homes.

York Station Gateway

Executive will be asked to approve additional funding of £18.5m, to be allocated from aspects of the council’s existing capital programme, to make up a shortfall created by inflation, problems arising on-site and other issues.

YSG is regarded as an essential project in transforming a critical arrival point for one of the North’s busiest leisure destination cities, improving safety and access to the station area for pedestrians, cyclists and public transport.

As set out by officers, issues that have arisen include “abnormal works” and the change of specifications to improve access and better cycling provision has led to delays, with the knock-on effect being substantially increased costs, which CYC is contracted to fund.

YSG is made up of five packages:

• The first, a £2m enabling works programme is completed.
• The second, covering highways works, is a year behind, and is expected to cost £26m, including an additional £11.5m, made up of substation works (£1.2m), complications including utilities consents (£1.4m), delays due to design development, ground conditions, and utilities issues (£3.9m), and additional works reprioritised between packages (£5m).
• Package 3 covers station works, currently estimated to cost £23m, including Network Rail land purchase costs, CYC is in the process of agreeing a fixed price position with London Northeastern Railway. The works are on land owned by LNER and are to be delivered by LNER, as part of a works agreement entered into by LNER and CYC in 2022, with an estimated cost at the time of £9.6m plus land purchase costs.
• Package 4 covers a loop road and short stay parking, and is estimated to complete at a cost of £4m, including land costs. The package also includes a turning loop for buses, removing the need for circuitous bus routing.
• Package 5, a multi-storey car park, is being paid for by Network Rail and is estimated for completion in 2029. Officers spell out that delivery is wholly dependent on the council not contributing financially.

The current approved YSG budget is £32.4m, made up of a combination of funds from West Yorkshire-Plus Transport Fund, the DfT’s Transforming Cities Fund, and LNER funds.

In addition, £2.8m is to come from Bus Service Improvement Plan through reprofiling the current programme, and £1m from the 2025/26 Mayoral Bus Grant to provide a current total of £36.2m – around £18m short of the current estimated cost.

York Outer Ring Road

Estimated costs have ballooned for the YORR project, from just shy of £70m at the outset to more than £160m now.

Current spend on YORR is £14m, said officers, with further phases to be funded through a mix of grant funding, future borrowing, and developer contributions aligned with housing delivery – the road is intended to unlock swathes of the outer York area for housing.

The original estimates for YORR were based on roundabout upgrades (2016) followed by simple dualling (2019) and a non-detailed high-level costing of works in 2020.

As part of the planning process, a more detailed pricing review was undertaken in October 2024 with a final report from consultant Pell Frischmann coming in March this year.

In addition, works were commissioned to market-test and estimate the project.

The approved budget was originally £67.4m, broken down as follows; DfT £25.1m, CYC £4.3m and West Yorkshire Combined Authority £38m – however, CYC officers said that recent estimates now indicate a likely total cost of £164m.

Of this potential increase of close to £97m, £44.4m is allocated to satisfying 25 planning conditions, and increased inflationary pressure around £23.6m.

Rather than commit to borrowing externally, officers propose that YORR is progressed through a combination of West Yorkshire Transport-Plus Fund cash provided for YORR and the Castle Mills Bridge project, and a request for funding from the York & North Yorkshire Mayoral Combined Authority. Should this approach be unsuccessful, officers “would need to explore reprioritisation within the capital programme”.

Officers further propose that YORR’s delivery is broken down into four distinct phases, with priority given to elements critical to Local Plan infrastructure, unlocking housing allocations, and avoiding over-exposure to financial risk.

The proposal is that £27m of the existing £52m budget Clifton Moor roundabout be prioritised as phase one, unlocking housing sites, and thus opening up the possibility of bringing in £5m in developer contributions. It is also suggested that £14.5m be reallocated to the YSG project outlined above.