As the UK closes in on the highest inflation rate in 40 years, the Local Democracy Reporting Service takes a closer look at just how East and South Ayrshire councils have been hit – by everything from Brexit and the pandemic to spiralling fuel costs.
Over the last couple of years, almost all council reports on finance and capital projects have alluded to the challenges caused by Brexit and the pandemic.
The rising costs had already begun to hit council projects before the unprecedented rise in inflation in 2022. From an original £35m, the cost of the proposed Ayr Leisure Centre had topped £45m by last autumn.
The new Conservative administration at South Ayrshire Council has vowed to scrap the project, with the cost of the centre likely to spike much higher.
Other projects such as East Ayrshire Council’s Doon Valley Campus and South Ayrshire’s Maybole Campus face rising costs and saw spending caps raised earlier this year.
East Ayrshire Council recently stated that the Doon Campus could cost £41m – an increase of more than £7.5m.
The Maybole campus also saw councillors agree to increase the cap on spending to almost £60m – a £6m increase.
An East Ayrshire Council spokesperson gave examples of some of the areas they were seeing marked rises.
They said: “In general, items such as timber, steel radiators, plumbing and electrical components have been amongst the worst hit in terms of price increases.
“Other factors such as the availability of materials and resources has had an adverse impact on the delivery of key elements of the Council’s Housing Improvement Programme.
“Large scale programmes like kitchen, bathroom and electrical upgrades as well as rendering and roofing have faced challenges in relation to resourcing and budgets have come under pressure given the increases in costs.”
In other services such as Cleaner Communities, there is pressure on wheeled bins, recycling trolleys, bags, PPE as well as the fuel prices rises that have affected work right across the board.
Brexit has played a big part in the shortage in manpower for construction projects. Some areas had 40 per cent of their construction workers coming from the EU before Brexit and the ending of freedom of movement caused a significant hole in the workforce.
At the same time, construction materials became more difficult to get a hold of. This was as a result of both the highest number of construction projects active for a quarter of a century and fewer lorry drivers transporting materials.
Again, many drivers were from EU countries.
Significant amounts of essential materials were also imported from the EU. With additional administration, the costs of securing those materials shot up.
The Office of National Statistics show that the cost of a variety of construction materials has skyrocketed since the start of the year.
Using the price of materials in 2015 as a benchmark, it shows that imported sawn or planed wood is 111.3 per cent up.
Fabricated structural steel is 156.3 per cent up on 2015 while cement is 24.3 per cent higher.
While the figures show timber and steel up significantly since 2015, the rapid rise in costs can be seen in the rises in just a few months.
Imported sawn wood has risen by more than 20 per cent since February while structural steel has jumped by 65 per cent since January. Cement is 11 per cent up, while asphalt is up 22 per cent. .
The ONS also compare the cost of specific projects, including new housing, other new construction projects, repairs and maintenance.
Between June 2018 and June 2019, the cost of new housing rose by 2.5 percent, other work by 3.3 per cent, repairs and maintenance by 2.3 per cent. Overall costs increased by 3 per cent.
Between June 2019 and June 2020 overall costs increased by 1.1 per cent. New housing costs actually decreased by 1.2 per cent, with repairs and maintenance dropping 1.9 per cent.
By June 2021 the overall costs increased by 14.7 per cent. New housing rose 13.5 per cent, with new work (15.9 percent) and repairs and maintenance (15.6 percent) showing just how prices ramped up.
A South Ayrshire Council spokesman said: “The current inflationary increases now being encountered have reached unprecedented levels in recent weeks, well above the anticipated increase in some areas of spend incorporated in the budget back in March.
“Work is currently ongoing as part of the normal financial reporting mechanisms to quantify the likely cost impact of this change for 2022/23. This will be reported to members in August.”
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