Construction at Meridian Water started late – now we’re paying the price

Alan Sitkin, a former cabinet member for economic regeneration and business, decries the delays and cost overruns at Enfield Council’s flagship development

Construction at Meridian Water officially began in May 2021, when council leader (front, right) symbolically dug a spade into the ground (credit Enfield Council)
Construction at Meridian Water officially began in May 2021, when council leader (front, right) symbolically dug a spade into the ground (credit Enfield Council)

We demand from our representatives that they report truthfully on their actions or inaction – especially when large sums are at stake.

Politicians failing in this duty tend, quite deservedly, to not last very long – as exemplified by the plunging fortunes of Liz Truss, decried for the economic damage caused by her inane budget but also for her subsequent efforts to stifle analysis. Horrifyingly, in Enfield we are living with the same combination of abject incompetence and post-truth politics.

The Dispatch has published several recent stories detailing how Enfield Council regeneration projects are facing the same cost inflation as construction is everywhere. In these articles, councillors communicate a message that the huge overruns at Meridian Water are being caused by external circumstances over which the council has no control. But as someone who had cabinet responsibilities for parts of this mega-project between 2014 and 2018, I know that this explanation for our impending financial catastrophe is total baloney.

It is true that construction cost inflation will harm future Meridian Water phases. And it would be wrong to blame the council’s current administration for tomorrow’s challenges. But Meridian One, the first development phase [originally earmarked for 725 homes, now increased to 977] was originally primed to be entirely finished by early 2020 – well before Covid-19 and Putin-related inflation kicked in.

Now that higher inflation has arrived, the first phase costs have gone up enormously – a huge surcharge undermining Meridian Water’s overall viability. But the real failure here is that it took the council until 2021 to start work on a fully-planned segment scheduled to begin three years earlier. The question is why.

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The starting point is Meridian Water’s shift from a development where the council was required to proceed via master developers (the condition for an early £20m grant from former chancellor George Osborne) to a project run in-house. The previous Labour administration that I was part of always tried hard to get the right deals for Enfield, but realised that if we were unable to agree terms, contingency plans were needed so the council could pivot as quickly as possible to outsourcing the work.

The problem is that Nesil Caliskan, when she became council leader in 2018, seemingly failed to grasp the imperative for the council to accelerate the first phase of Meridian Water. Mega-projects are time bombs; the council may have been sitting on hefty capital gains when I left office (thanks to our timely land purchases) but, as anyone with a financial background knows, in the absence of sufficient ‘meanwhile’ receipts, interest charges on developments like this will eat away at unrealised capital gains (i.e. funding and expenditure operations must be chronologically co-ordinated). That didn’t happen in the pre-Covid period of 2018-2020. Why not?

There seem to be two answers. The first is that Cllr Caliskan was already leader when she decided to also appoint herself as head of regeneration, thereby downgrading this difficult function into a part-time job, even as a £6billion project was at stake. The second is that prior to becoming leader Cllr Caliskan seemed to lack relevant financial, business or cabinet experience. The same could be said for Mary Maguire, who was put in charge of finance at the civic centre [she stood down as a councillor before the 2022 local election].

The end result is that during these crucial years, the political leaders running the mega-project of Meridian Water failed to channel and galvanise council performance – and construction of the first phase was started three years late. It is a failure that will cost local taxpayers dearly.

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