Lincolnshire County Council’s £1million highways inflation bill

Sky-rocketing inflation is set to add £1million to Lincolnshire County Council's highways costs for road repairs.

The council is considering increasing the value of its highways contracts so that suppliers can cover the rising costs.

Small contractors and council supply chains are under “real pressure” and will struggle without help, a report warns, with costs up 13 percent in April 2022 compared to the year before.

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Contracts rise annually with inflation, but this mid-year bump would help businesses who are already having difficulty with costs.

The recommended choice would add £964,000 to costs for the remainder of the financial year.

The support would be targeted at those businesses most at risk of failing.

Lincolnshire County Council said it’s too early to say what impact this will have on other highways work, but they aim to make all spending as efficient as possible.

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The Highways and Transport Scrutiny Committee will have their say next week on the increase – or whether to opt for an even bigger handout of £1.5million.

A council report says: “There remains significant risk that SME [small and medium enterprises] working within the Highways Works and Traffic Signals contract are struggling to deal with the pressures they are facing.

“The decision to pursue any of the options set out in this report is a significant one given the challenges that are also faced by local government as additional funds from central government remain unlikely.

“However, the cost to replace those at risk is real and service continuity plays a significant factor when delivering essential services of this type.”

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The report warns that if nothing was done, the council could still be hit by unexpected costs if one or more supplier goes into administration.

The construction sector is being hit by rising prices fuel prices, skills shortages and a lack of HGV drivers.

The committee meeting will be held on Monday, September 12 before it goes to Executive Councillor Richard Davies for a final decision.