How much is the Scheme estimated to cost?
Early indicative costs prepared in February 2020 (during the previous option appraisal and outline design stage of the project) estimated delivery costs (including risk and future maintenance) for the Core Scheme between £4.5 and £5.1 million. Figure 1 below presents a range of delivery costs for the Whole, Core and Additional Scheme.
These costs were presented to HBC Cabinet in October 2020, where approval was given to progress into the detailed design stage of the project, which aims to increase the cost certainty on the whole life costs as the designs are further refined. More recently during the detailed design stage, an Independent Cost Consultant was also appointed to undertake a review of construction costs and provide a revised cost estimation for scheme construction, maintenance and operation.
Many things have changed since we had our initial cost estimates. The conflict in Ukraine, Covid-19 and the UK leaving the EU has impacted the construction market both over long- and short-term timescales. The design has also progressed during detailed design so that there have also been further design details that change the assumptions on which our early estimates were based, along with further data available to support the design development and subsequent cost estimations.
Our current cost estimate incorporates the latest understanding of the above-mentioned impacts and design changes. There has been a significant increase in estimated construction costs which reflects the current levels of uncertainty within the construction industry worldwide today.
For the Core Scheme, this sees estimates for delivery costs increase to £13.1 million, with construction costs representing £10.7 million, with risk included. Figure 2 below presents a range of construction costs, with and without risk, for the Whole, Core and Additional Scheme. More certainty in cost will be gained as the design continues to progress at the 80% and 100% design milestones.
There’s more information on how construction costs have increased and what is included within the build-up of the 50% construction estimate on a frontage-by-frontage basis, see information pack here.
What is the funding gap?
The Langstone Scheme is not eligible for full funding from the main source of Government Funding called Flood Defence Grant in Aid (FDGiA) funding. This has meant that a range of other funding sources have been explored towards the scheme costs.
To date, Coastal Partners have secured an exceptional £6.1 million of funding from a variety of public sources towards the costs of scheme delivery, with a further £1.2 million being bid for. Secured funding has been used to progress with the option appraisal and detailed design for the ‘Core Scheme’ and ‘Additional’ scheme frontages at Langstone Spit and Mill Lane and Harbourside. Funding is also allocated towards the construction of the Core Scheme. There is currently no funding for the delivery of the Additional Scheme beyond its design.
Despite this secured funding, we are currently forecasting a funding gap of between £5.8 million to £7 million for delivery of the Core Scheme (£13.1 million estimated delivery costs using latest estimations). The funding gap varies depending on the success of current funding bids and refinement of project risk and future maintenance needs throughout the remaining design. Coastal Partners are committed to working with others to narrow the funding shortfall alongside design refinement to close the current shortfall. However, any funding gap will need to be closed to enable construction (Figure 4).
We will have a greater understanding of the funding gap once the 80% detailed design milestone and subsequent 100% detailed design milestone have been reached and the Cost Consultant has been able to prepare revised construction cost estimates (Figure 5).
How can we close the Funding Gap?
Reducing Project Costs
Faithful & Gould will be further engaged at the 80% and 100% design review stages to undertake their costing exercise using latest industry guidance, increasing confidence in the cost estimate over time. Where appropriate they will seek to identify opportunities to refine costs further and generate efficiencies.
Undertaking ‘Early Contractor Involvement’ (ECI) with appointed professional Contractor, Mackley, to help minimise construction cost in the early design stages and to promote efficient construction methods.
The Designer will also consider materials required in construction and whether more affordable solutions can be integrated throughout the design refinement.
Seeking Contributions
There is more opportunity to work with the community and stakeholders to explore further sources of funding towards the scheme itself, wider community benefits and ecological enhancements. Following the Cabinet Meeting in October 2020, Havant Borough Council Cabinet encourage residents and local businesses to contribute to the wider costs of the scheme. Figure 6 presents answers to previously asked funding questions.
If you would like to contribute to the scheme, please contact us at langstone-FCERM@havant.gov.uk.
Coastal Responsibilities
Defra has overall national responsibility for policy on flood and coastal erosion risk management and provides funding for flood risk management authorities through grants to the Environment Agency and local authorities.
The Environment Agency is responsible for taking a strategic overview of the management of all sources of flooding and coastal erosion. The Agency also has operational responsibility for managing the risk of flooding from main rivers, reservoirs, estuaries and the sea, as well as being a coastal erosion risk management authority.
Local Authorities, including Havant Borough Council, as risk management authorities are not legally required to do anything to protect against flooding and erosion, however they have permissive powers to carry out works where there is a wider public benefit, clear economic benefit and an achievable solution.
Private Landowners have ultimate responsibility for protecting their own property from flooding and erosion but must act within statutory planning regulations and other applicable legislation.
Flood Defence Grant in Aid (FDGiA)
The Government’s mechanism for funding flood and coastal erosion risk management schemes is called Partnership Funding. Defra (Department for Fisheries and Rural Affairs) prioritise the allocation of Flood Defence Grant in Aid (FDGiA) funding based on the number of homes protected, which in Langstone’s case is relatively small compared to some of the national schemes or even local schemes in Portsmouth where there are thousands of homes at risk. Because of that, the Langstone scheme is unable to attract large amounts of central government funding, and further still, there is a requirement to secure other pots of contributions to the scheme. Further information is available.
An outline business case was approved by the Environment Agency in January 2022, drawing down £1.14m FDGiA and £1.125m OGD towards the Scheme.
The ‘Additional’ Scheme
The Core scheme does not include construction works for capital refurbishment of private defences at Mill Lane or the construction of a rock revetment at the end of Langstone Spit. Coastal Partners have the ambition to deliver the works along these frontages, however it will require further partner contributions toward construction costs. (Further information on why we refer to the ‘Core’ and ‘Additional’ scheme can be found here).
The project team are working closely with the Sailing Club, landowners and residents in the hope that private funding contributions can be made to enable construction of these additional sections so that they can be synchronised with the core scheme works. We are also working directly with residents at Mill Lane and Harbourside to generate an affordable solution for this frontage.
To support the landowners, residents and the Sailing Club, HBC has committed to preparing the detailed design for the Additional Scheme from the project funds. This provides the best opportunity for these additional works to be carried out with the core scheme or to provide a completed design to the asset owners for private investment in construction in the future.