South Kesteven District Council members raise concerns over rising costs of new waste depot in Grantham

Concerns about the overall cost of a new waste depot in Grantham have arisen, following revelations that additional funding is required.

South Kesteven District Council's cabinet members described the project's progress as "moving along very nicely", but a report to the finance and economic overview and scrutiny committee outlined the need for £500,000 more to facilitate the relocation of services from Alexandra Road to the new site being built at the former Fenland Foods site on Turnpike Close.

The council initially allocated £8 million to the project in September 2023, with a further £800,000 approved in February 2024.

Construction work, led by Lindum Group Ltd, began earlier this month, with a target completion date of October 7, 2025.

The relocation and mobilisation of the existing depot to the new site will take place over four weeks, with operations expected to go live by mid-November 2025.

The new facility is expected to improve council services, housing over 250 employees working in operations such as bin collection, street cleaning, housing maintenance, and a workshop for council vehicles.

During a meeting on Tuesday, November 26, Coun Max Sawyer (Ind) criticised the additional £500,000 requirement, highlighting that it was not included in the initial cost estimates. He asked: "Are there more increases to come?"

Coun Mark Whittington (Con) also suggested: "If we set a budget of £10 million with proper contingencies in there, a lot of these costs would have been known and the risks would have been identified a whole lot earlier than they seem to have been."

Chief finance officer Richard Wyles insisted the extra expenditure should not be "a great surprise to members", explaining, "We had already identified eight months ago there would be a requirement for further funding because the financial headroom of the £8.8m was not sufficient to accommodate those costs even following the period of value engineering."

Mr Wyles later indicated that the additional funding would need council approval and would be sourced from the Local Priority Reserve due to the one-off nature of the request.

Coun Sawyer responded: "What I’m hearing is we knew there would be more to be added to the costs, but we didn't include them at the time, and I’m not happy about that.

"This is starting to look like a grand project where some costs are added, and it just keeps snowballing. How much is it going to cost when it’s finished?"

Mr Wyles said this was a "disappointing summary". He replied: "We’ve already said that when the budget was requested, it was before the market had responded to the specification that was put together.

"This was done by independent consultants, so these figures changing are not from an officer perspective. They are from industry experts who, at that time, believed £8 million would be sufficient to fund this project.

"Best endeavors were undertaken by all concerned to bring the financial headroom up enough to accommodate these new costs, but it proved impossible. Now, what we could have done is completely rewritten the specification and planning application and gone back to planning, but I suspect the council would rightly be quite critical of a further delay in the project."

He also explained that a new online food waste scheme is set to start in April 2026, which cannot be undertaken at the existing depot. The council is "massively constrained" and needs to get the new depot operational by March 2026 at the latest.

"We haven’t got the luxury, if you like, of going back and forth to planning and keep changing the design," added Mr Wyles.

Coun Richard Cleaver (Ind), cabinet member for property and public engagement, defended the financial management of the project, insisting that a "political decision was made that we would not compromise on the longevity of this project."

He added: "A political decision was taken and the political guidance was given that at no point are we going to compromise the longevity of the building, the build quality, or the energy efficiency of that building because in this council we have seen before the consequences of scrimping and saving on our building and property assets, and it isn’t going to happen on my watch.

"There was no question of us scrimping and saving, not telling you what we have done to keep the costs down, and then suddenly in five to ten years, somebody discovers that we put a cheap roof on and that’s why it suddenly failed."