Herefordshire set to increase borrowing as bypass costs rise

An extra £5m will need to be borrowed to finance the first phase of Herefordshire’s proposed new bypass, after construction costs for the scheme were underestimated.

The local-authority-backed 2.2-mile Southern Link Road is set to be built between the A49 and the A465, and is planned to eventually form part of a £300m, five-mile road around the west of the city.

Herefordshire Council says the road will play a “key role” in Hereford’s wider economic development, and unlock housing and employment sites in the south of the city.

However, critics of the scheme said interest payments on the extra borrowing would affect the authority’s ability to deliver its core services, as an updated capital programme was waived through at Herefordshire Council’s cabinet today (20 January).

The first phase of the road was approved by Herefordshire council’s cabinet in 2024, with estimated costs of around £9m to develop the scheme added to an estimated cost of £35m for the construction phase.

However, a review by council consultants Aecom shows that further works are required to meet updated construction and environmental standards for the road, as well as additional utility diversions which had not been spotted at the beginning of the project.

A report put before the council’s cabinet today showed construction costs had risen by £1m as a result, with an extra £300,000 also required for project management on the scheme.

Those updated estimates left the council around £5m short of the £36.3m it needs to award a build contract for the scheme, expected later this year – with the extra money expected to come from borrowing.

Last month, the council approved a decision to push ahead with land purchases to enable the scheme to go ahead, with Compulsory Purchase Orders lined up as a measure of last resort if discussions with seven landowners along the route prove unsuccessful.

A full business case for the bypass is expected to be brought forward later this year.