Agenda item

This report has been prepared to allow the committee to consider the contract management: major project delivery final audit report alongside external audit’s 2024/25 audit completion report and the Key Corporate Risks Monitor 3.

The Director of City Development introduced the report which provided a further update into major projects. This report followed on from the Committees 28 January 2026 Contract Management Major Projects Delivery Report. He confirmed that the Council were recruiting to ensure it had sufficient resources to meet challenges highlighted in the internal audit report from Veritau and was reducing its reliance on private consultants to ensure the Council had more direct control over projects.

On the Station Gateway project, Officers noted that weekly progress reports were being provided to senior officers. It was confirmed that the Council could have been more prepared ahead of entering into the Station Gateway. It was confirmed that the Council had entered a NEC contract which meant that the final cost of the project would be determined at the end of the project and that multiple unplanned issues had affected the projected overall cost.

Members queried as to whether the Council had sufficient staff training and experience in contracts and civil engineering within project management. Officers confirmed that the Council was currently recruiting and that there had been vacancies due to the challenge for Councils in recruiting within the sector. The Council was providing training opportunities and was standardising its project management procedures to ensure improvements in project management. The Committee asked whether the additional resources for the Station Gateway project would have addressed issues in reporting on the overspend sooner. Officers noted that additional resources can assist schemes, however, in the case of the Station project this was resourced but more from a consultancy side rather than specifically Council officers, something the Council was reducing its need for consultancy support.

The Committee asked about how the Council was reporting to Councillors about major projects. Officers confirmed that the risk register were released on a regular basis and that the Council would maintain transparent reporting on changes. It was confirmed that some information couldn’t be made public, but this information is reported to senior management level in the Council and monthly meetings were now being held with Executive members to ensure they were fully briefed on major projects.

The Committee enquired as to why the Council might enter a contract to deliver a project that didn’t have a fixed cost and how would the Council ensure there are not future projects that could have a £28m overspend like the Station Gateway. Officers noted that regular reporting was going to be key and that changes had been made to ensure this so that ongoing costs were better monitored. Officers confirmed that with better reporting on the Station Gateway project costs might have remained the same as they currently are, but it would have allowed the Council greater control over managing the project. In terms of entering the contract Officers noted that while it was correct that additional work pre contract agreement might have better identified the full nature of the work and potential costs, it was the case that there were numerous time constraints to secure funding. In the case of the project, officers also noted that it was not a guaranty that additional up-front work would have changed the overall cost of the project, but might have more accurately assisted in identifying the overall cost of delivery.

Members raised several questions regarding when in the project issues occurred that led to project overspend on the Station Gateway. Members enquired as to whether the senior management restructure in 2024 had any impact, Officers noted that issues with the project were dated back to 2022 and links to the change in structure and the project would be difficult to determine but they did not believe it would have had a large factor in project management issues. Members highlighted the package 2 contract signed in April 2023 and asked whether more due diligence should have been given to the contract and asked why it was agreed in the pre-election period. Officers confirmed that the decision had been made previously by Executive therefore the entering of the contract could be an officer decision in the pre-election period. Officers also confirmed that the contract was fine in principal but that unforeseen issues had led to additional costs that were outlined in the projects predicted cost.

The Committee noted that it had mainly focused on the Station Gateway project due to the projected overspend on that project, however, they also noted that similar issues had been identified with the Tadcaster Road project. Members asked whether this showed a wider issue with the work the Council undertook to enter contracts for major projects. Officers noted that the audit suggested issues in the initial design phase in contracts and that the work undertaken on training, recruitment, and changes to project management should prevent similar issues with future projects.

Resolved:

                         i.         That a further update on progress against the Internal Audit Action Plan to be brought to the Committee’s 16 September 2026 meeting.

Reason:     To ensure that the action plan is being delivered.