Highland Council leader Margaret Davidson has admitted that several projects in the city region deal need to “change tack” or risk losing the money.
The Inverness and Highland City Region Deal is listed on the council’s corporate risk register as a “critical” risk.
A report to the audit and scrutiny committee outlined an underspend in the £315m programme.
Officers said the council will suffer significant financial and reputational damage if the programme can’t be delivered.
Action plan is four months late
The report blamed Covid and Brexit for hampering progress, but also acknowledges that there are individual project issues at play. It adds:
‘The programme has a finite delivery deadline with an extension not possible. A key indicator to delivery is the rate of spend within the projects and there is underspend apparent already.’
Officers have rated the risk as ‘low’ likelihood and taken a number of steps to get the city region deal back on track.
However, most of what is termed ‘mitigating actions’ refer to back-end meetings.
These include a programme board, a councillor-led scrutiny board and individual project risk registers.
By March next year, the council has said it will complete a ‘programme benefits realisation plan’ and a ‘project benefits realisation plan.’ The difference between the two is not explained.
The specific action to ‘remedy project underspends’ is four months behind schedule, having been due in July 2021.
Can the council deliver?
Council leader Margaret Davidson told committee members she is concerned that the council may not deliver.
“In terms of the city region deal, we’re now five or six years into a 10 year programme,” said Mrs Davidson. “It’s really important we review all our business plans to ensure they are deliverable.”
Mrs Davidson said there are question marks over a number of business plans, and talks are ongoing with Scottish and UK government officers to use the money differently.
“One of the biggest risks is not being able to spend the money,” she said. “We now need to find a way to change tack, without risking them taking the money away. That’s my biggest fear.”