Transparency data

Lower Thames Crossing: accounting officer assessment (December 2022)

Updated 30 July 2024

Background

This assessment has been completed following a cost and schedule review undertaken in 2022 with the last investment decision point being the 2020 outline business case (OBC). This accounting officer assessment (AOA) has been produced by National Highways in conjunction with DfT. The senior responsible owner sits within National Highways (NH). The NH Chief Executive is accounting officer for the expenditure, and the Investment, Portfolio, Delivery Committee (IPDC), to which the project also reports, is chaired by the Department for Transport (DfT) permanent secretary as principal accounting officer for the DfT group.

Overview

The Lower Thames Crossing (LTC) is a new river crossing within the Thames Estuary and is a Nationally Significant Infrastructure Project (NSIP) essential for the national economy.

LTC will improve the road network capacity and resilience within the south-east of England. The crossing will nearly double road capacity across the Thames, east of London, resulting in 30% more cross-river journeys.

LTC will help to level up the region and make new journeys possible. It will have an agglomeration effect which will help improve business productivity and will be a key enabler for the Thames Estuary Growth Board’s plans.

The crossing will help attract investment in the Thames Freeport which is expected to generate both private and public investment to create a major innovation and global trade hub to the Thames Estuary.

Regularity

A cost and schedule review was undertaken following a decision to change the land requirements to avoid a clash with land needed by the Thames Freeport. This change will help generate additional gross value added (GVA) through private and public investment that will create a major innovation and global trade hub in the Thames Estuary. The change has led to further design and an additional public consultation which has added time and cost to the programme, principally through the effects of inflation. The cost assumptions, especially those relating to inflation, are still under discussion with HM Treasury (HMT) but base costs remain within the OBC assumptions. Funding implications are subject to ongoing discussions with HMT.

Propriety

LTC falls under the Department’s definition of a Tier 1 Project and therefore adheres to control and governance arrangements within NH, DfT and HMT levels. Final approval of each stage of the business case is made by DfT and HMT ministers. Under its procurement delegations, NH would approve all other steps in the process.

National Highways has appointed a senior responsible owner and overall progress on LTC is assured by the Infrastructure and Projects Authority (IPA) and reported through the Government Major Project Portfolio (GMPP).

As a NSIP, legal powers for construction will be gained through a development consent order (DCO) as defined under the Planning Act 2008. A decision on the DCO is expected by late 2024.

Value for Money

The BCR in the OBC is 1.46. However, the recent lowering of the future economic forecasts for the UK economy and the consequent fall in value of journey time savings could cause this to drop. The scheme has other key strategic benefits not reflected in the BCR including driving growth in the region and helping to unlock the potential of the investment in the Thames Freeport. At full business case there is an expectation that these wider economic benefits will be quantified.

Feasibility

The project is subject to external review by the IPA. The IPA carried out a stage gate assessment review in November 2021 and judged the project to be well resourced with the required capability to manage LTC effectively. The review concluded that successful design, development, and construction of the project to time, cost and quality appears feasible. A follow-up IPA independent peer review in June 2022 raised no significant issues.

There are recognised environmental challenges involved in the construction of a scheme of this type, including an internationally protected wetland (Ramsar site) close to the tunnels’ southern portal. The Ramsar site is one of the key drivers for the route choice selection via a tunnel and the design development that has moved the tunnel portal 350m further south has further reduced adverse effects on the wetland. Additional habitat is being created on both sides of the river Thames in recognition of the impact of construction.

The project aspires to achieve a net zero carbon position which relies on new and emerging technology and products to be achieved.

Conclusion

There is a strong strategic case for the Lower Thames Crossing. The Dartford Crossing is one of the worst performing parts of the Strategic Road Network (SRN) from the volume of traffic, with congestion and incidents on the route significantly having an effect on customer journeys and economic growth. The LTC will relieve this congestion as well as promote economic growth through new journeys across the Thames helping to facilitate economic growth north and south of the Thames, as well as nationally.

As a Tier 1 scheme, the project will return to the NH investment committee and DfT IPDC at six-monthly intervals (or sooner) if factors affecting the value for money, schedule, costs and/or benefits of the scheme change. LTC is reliant on the successful outcome of the DCO application and government’s final funding and investment decisions at full business case

Bernadette Kelly

Permanent Secretary - Department for Transport

28 November 2022

Nick Harris

Chief Executive - National Highways

26 October 2022