£5.5million set aside for legal claim against Advance Northumberland

Northumberland County Council is forecasting a £5.5million overspend by its regeneration company this year due to a legal claim.

By Ben O'Connell
Tuesday, 8th September 2020, 12:28 pm
Updated Tuesday, 8th September 2020, 12:28 pm
The home of NEP1 site – the former Blyth power station site.
The home of NEP1 site – the former Blyth power station site.

It was reported last month that Advance Northumberland is facing a claim from contractor Farrans, after halting work on the Northumberland Energy Park (NEP1) project on the Blyth estuary in March amid the Covid-19 pandemic.

At the time, refuting claims to the contrary, Advance’s managing director Ken Dunbar told the BBC that he did have the authority to order the shutdown, had taken legal advice, assessed potential implications and worked with the council.

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“Ultimately I, fully backed by a board of independent directors and directors who are also councillors, took the decision it was important we looked after the safety and welfare of the staff and closed sites down safely,” he said.

A report to the Tuesday, September 8, meeting of the council’s cabinet confirms that it is forecasting a £5.5million overspend by the company in 2020-21, which ‘relates to a claim for force majeure from a contractor, following the decision taken by Advance Northumberland to close the NEP1 construction site as part of the company’s Covid-19 response’.

Cllr Nick Oliver, the cabinet member for corporate services, said: “There’s £5.5million put into the budget for dealing with a legal claim against Advance Northumberland.

“We’re hoping that this will be at the upper end and it could quite reasonably be significantly lower than that.

“It will be vigorously defended, but that’s the value of the claim as it stands, that doesn’t necessarily mean that it’s the value of the payment.”

Overall, the council expects the financial hit from Covid-19 to be £37.4million, but £21.8million has already been received in Government grants and there are underspends in other areas. The latest forecast for the current financial year is a £7.3million overspend, the meeting heard.

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