Tube heating plan’s £6.4m overspend
Rising cost of pioneering scheme to pump hot air from Northern line is result of ‘over-optimism’
20 December, 2019 — By Sam Ferguson
Cllr Caroline Russell: ‘Something is amiss when your costs are that far out’
THE Town Hall has been accused of poor planning after it was revealed the cost of using ventilation shafts on the underground network to help heat homes above ground was running £6.4million over budget.
The Combined Heat and Power project, known as Bunhill 2, will pump hot air from shafts in the Northern line and use it to warm more than 1,000 homes in the borough. The idea is the measure will cut energy bills while also cooling the tube.
But councillors sitting on a performance scrutiny panel were told this week that the project’s costs have skyrocketed to £16.3million – and this was only to get “partial completion” by January 21, 2020. Previous estimates had priced the project at just under £10m.
Cllr Rowena Champion
A Town Hall report circulated to the panel pointed to additional costs for delays, changes to the scope of the project, changes to the “technical solution”, costs for materials, services and approvals, and the cost of establishing a “robust contingency”.
Highbury East councillor Caroline Russell, from the Green Party, said the overspend could be the result of “over-optimism” and the project being “poorly scoped”.
She told the Tribune: “Something is amiss when your costs are that far out. It’s great that the council is doing something really innovative, and I think it’s a good project.
“But they have either bitten off more than they can chew, or it’s over-optimism.”
Islington’s new environment chief, Councillor Rowena Champion, said the council was committed to “innovative action” to tackle the climate emergency.
She added: “We’re proud to continue to support the delivery of this pioneering, carbon-cutting scheme to heat local homes.”
Cllr Claudia Webbe
Fellow Labour councillor Claudia Webbe, who headed up the brief for five years before being elected as Leicester East MP last week, told the Tribune she had not seen the report put before the scrutiny meeting.
She added: “There can be no barrier on costs when it comes to tackling fuel poverty and addressing the climate emergency we face.”
The report also revealed a projected overspend of £2.7m in the Environment and Regeneration department, described as “structural budget issues”, as well as a £170,000 overspend by the chief executive’s office on consultancy fees.
Responding to these overspends, Cllr Champion added: “High quality frontline services such as recycling and waste collection, and keeping Islington’s streets clean, are vital to our residents and we’re committed to making sure these and other key services are properly funded through the Environment and Regeneration budget.”
A spokesman for Islington Council explained the £170,000 overspend on consultancy fees in the chief executive’s office was offset by other savings, meaning the net overspend was actually £64,000.
They added the consultancy fees related to the cost of an interim head of paid service, for the period where the council had no chief executive, and recruitment costs to fill the position.
The first phase of the Bunhill project built an energy centre in Central Street which produces electricity and heat for more than 800 homes in Bunhill ward, as well as Finsbury Leisure Centre, Ironmonger Row Baths and offices in Old Street.