CARLISLE’S long-awaited Southern Link Road scheme is being put “at risk” by a perfect storm of rising prices, the global energy crisis and material shortages.

With those challenges now combing with the economic turmoil unleashed by Vladimir Putin’s war on Ukraine, the final price-tag of the ambitious infrastructure project – originally costed at £140m - has soared by “tens of millions of pounds,” says Cumbria County Council Leader Stewart Young.

But he and the city’s MP John Stevenson say they are determined to see the road built.

Mr Stevenson says he is optimistic about the project, now widely regarded as a centre-piece of the Government’s levelling up agenda in north Cumbria.

It has been designed to pave the way for the planned St Cuthbert’s Garden Village development, bringing 10,000 new homes to the city.

But the financial challenge - affecting such projects across the UK - came into sharp focus yesterday when it was confirmed that Cumbria County Council’s ruling cabinet has delayed signing the scheme's “second-stage” contract for the project with contractor Morgan Sindall Infrastructure.

The firm has designed the road and completed preparatory work but building will begin in earnest only after a final price is agreed and the contract is signed.

Crucial talks to resolve the issue are now underway between ministers, the contractor and politicians.

The road is one of several infrastructure projects around the UK which are being affected by the far-reaching economic impacts of covid, the energy crisis and the war in Ukraine.

“What's been happening in the past few months has been like a perfect storm," said Mr Young.

“We've already been experiencing pressures in the supply chain because of covid, pushing up prices; and inflation is going up anyway – partly because of the Brexit effect.

“And now we have the Ukrainian situation, which has exacerbated all of that.

"Apparently, the UK gets most of its steel from Russia and Ukraine because we closed down our capacity over recent years.”

Costs are being pushed up by the rising price of materials, fuel and steel – essential for building the bridges which will feature in the project. There is also now deepening uncertainty around the availability of steel, said Mr Young.

While the two local authorities involved - the County Council and Carlisle City Council - are each contributing £5m to the link road scheme, most of the funding is from Homes England, a public body that aims to deliver affordable housing.

Mr Young said: “We’ll defer signing the contract so we can continue having discussions.

He said current discussions with Homes England officials were positive. He said: "Ultimately, behind Homes England sits the treasury and the Department For Levelling Up Housing and Communities, Michael Gove’s Department.

“They have an interest because they’re the sponsors of St Cuthbert’s Garden Village. They know this road is necessary to deliver their aspiration for delivering 10,000 new homes. We’re working with Carlisle City Council and we’re working with John Stevenson.

“This is precisely the type of scheme the country needs to recover from covid: it’s ‘building back better’ and the number jobs tied to this in the supply chain here in Cumbria is significant. By our standards, it’s a very big scheme and it will put money into the local economy. We’re absolutely determined to keep this scheme alive.

“But we need to be clear: unless we get additional financial support, we won’t be in a position to build the road. It’s not the sort of scheme that Cumbria County Council or Carlisle City Council could build from our own resources.

“We already have a [funding] commitment from Homes England but the shortfall is in the tens of millions. The scheme is at risk, as are a lot of schemes up and down the country. It isn’t just a Cumbrian issue. We clearly in a difficult situation and we’re not in a position to enter into the stage-two contract as planned but there’s been a lot of money invested in this scheme and a lot of time and effort.

“There’s a lot riding on it in terms of the future of the Cumbrian economy and it underpins and enables the St Cuthbert’s Garden Village project.

"But it’s an essential scheme and we remain fully committed to it.

“There are going to be some very difficult discussions over the next few weeks if we can keep it alive. We’re absolutely determined to do that if we possibly can. We need to understand this is a critical situation.”

Mr Stevenson said the Government recognised that the link road - said to be a necessary final piece in Carlisle's roads infrastructure - was important.

“We have the support of Homes England," he said. "There's been cross-party support in Cumbria and I have worked with the Labour-run County Council and we have all been very positive in our actions.

“Unfortunately, there are costs which are way beyond anything anybody anticipated, or could have anticipated, which have the made the road significantly more expensive. But I’ve been in discussions with Government ministers, and they are receptive.

“They obviously need to analyse the implications of additional funding.

“I am still upbeat - but we have to recognise the reality of the situation. There are ongoing discussions at all levels in local and national.

“This is the result of the unexpected economic consequences of covid, compounded by the rise in costs, which is further compounded by the Ukrainian war, which is having a huge and significant impact, not just on projects in Cumbria but right across the UK and probably beyond.”

Mr Stevenson praised the “excellent” partnership working on the link road scheme, adding: “I remain very optimistic. This is a strategic project, which unlocks 10,000 houses and it’s very much part of the Government’s levelling up agenda.

“I’m hopeful that the obstacles presently in the way can be overcome; and we do have ministerial support.”