The Cambridgeshire and Peterborough Combined Authority (CPCA) is underspending its budget this year, but not because projects are cheaper than expected. Instead, millions of pounds have yet to be spent as planned schemes stall, according to the Authority’s first quarter budget update.
The report, to be presented to the Board this week by Janice Gotts, Executive Director of Resources, shows that of a £116 million capital programme, just £4 million had been delivered by the end of June. This shortfall is described as “slippage in the capital programme.”
What Slippage Means
In the Combined Authority’s own words, “the biggest slippage is in Strategic Transport, where grant agreements with the Highways Authorities are yet to be put in place.”
That means projects to improve roads, cycleways, and transport links cannot move forward until legal agreements are signed. The budgeted money therefore remains unspent in the Authority’s accounts.
“There are significant year to date variances indicating timing differences,” says the report. “These will be looked at in detail with budget holders over the next reporting cycle to further investigate whether they are due to timing differences (e.g. delayed claims or accelerated delivery) as implied by the current outturn forecast, or whether there are unrecognised ‘real’ under- or overspends.
“The most significant variance is within Strategic Transport where there have been delays in receiving grant claims for work undertaken and delay in conclusion of the Grant Funding Agreement for Highways grants – once the agreement is in place payments of grant to the Local Highways Authorities will be made and this will address the variance.”
“From urgent action to secure the Tiger Pass and stepping in on valued bus routes faced with the axe, to the hard yards of making the case for road and rail upgrades, housing delivery, skills investment and major infrastructure, the work to get Cambridgeshire and Peterborough moving is underway.
“In addition to the approved budgets there are also £60.2m of Subject to Approval (STA) budgets allocated to individual projects which are subject to a business case being approved before the project can progress. This includes £20m for bus depots and £2.7m for bus network improvements which are not expected to advance this year and will be pending the work of the independent review for bus franchising.”
Another example is the Start Codon life sciences fund, which had been due to receive £590,000 this year. The Authority now confirms this “is not expected to require further drawdown of funding until 2026/27.”
While the Authority stresses that projects are not being abandoned, the delays mean that delivery on the ground is slower than residents might expect.
A Broadly Balanced Budget
Despite the delays, the Combined Authority is on track to remain within its overall budget. The report states: “Overall, there is a forecast underspend of £998,000 against a total budget of £109.0m for 2025/26.”
On the revenue side, most departments are performing as planned. The only significant issues are:
- An underspend of £424,000 on the Free Courses for Jobs programme, reflecting “reduced funding clawed back by the Department for Education.”
- A slippage of £305,000 on staffing for the New Economy team, with funds carried forward.
- An overspend of £708,000 on the Tiger Pass discounted bus scheme, which the report attributes to “updated ridership data and forecast.”
The Authority expects this overspend to be covered by “underspends on concessionary fares.”
Boost from Interest Income
One of the few areas outperforming expectations is treasury management. The report highlights that “treasury management has delivered £1.8m more than expected” thanks to higher cash balances and better interest rates.
This has cushioned the impact of slippage elsewhere in the programme, but the underlying challenge remains — the Authority is struggling to move money from paper budgets to real-world delivery.
Reviewing Old Projects
Alongside the financial update, the Board reviewed £87.4 million of pre-delivery budgets. The exercise was designed to check that projects still align with corporate priorities.
- “Overall, there is a forecast underspend of £998,000 against a total budget of £109.0m for 2025/26.”
The report confirms that “most projects will continue unchanged,” but some have been wound down. For example, “the City of Cambridge Culture programme is set to close,” freeing up both revenue and capital budgets.
At the same time, new allocations have been made. These include:
- “£2.5m earmarked over coming years to support broadband and infrastructure.”
- “£15m from 2026/27 onwards to back new economic initiatives.”
- “£7.8m from re-purposed climate budgets to support adaptation and resilience.”
The Authority says this “realigns resources to deliver refreshed corporate priorities” while ensuring all future spending will still be subject to business case approval.
The Tiger Pass Dilemma
The most politically sensitive issue remains the future of the Tiger Pass. The scheme, which offers cheaper bus travel, is due to end in March 2026.
The report notes: “The Transport Committee will hold a workshop in October to model long-term options. Ahead of this, the Board was asked to give a steer on how much funding should realistically be allocated.”
- “Only around £3m might be available for a permanent Tiger Pass… Anything beyond that would require cuts elsewhere in transport services.”
Currently, passenger transport spending for 2026/27 is forecast at £27.5m, covering concessionary fares, supported services, and other costs. The Tiger Pass is not included in this figure.
The report warns: “Only around £3m might be available for a permanent Tiger Pass, drawn from potential underspends in concessionary fares and expected bus grant funding from the Department for Transport.” Anything beyond that “would require cuts elsewhere in transport services.”
Decisions Under Delegated Authority
The update also summarised recent approvals made by the Funding Committee and Chief Executive. These included:
- A full business case for the Local Electric Vehicle Infrastructure (LEVI) scheme, to deliver “at least 930 new charge points across the region.”
- The Youth Guarantee Trailblazer, providing “education, training, or employment support to young people.”
- The Cambridgeshire Constabulary Solar Canopy, a £700,000 scheme funded by the Mayoral Renewable Fund. This project is to install a solar canopy at the carpark at the Cambridgeshire Constabulary headquarters in Huntingdon, supplying renewable electricity and supporting their decarbonisation goals. This is fully funded by the Department of Energy Security and Net Zero Mayoral Renewable Fund.
Changes to existing projects were also signed off, such as reallocating funds from the Green Business Grants scheme and approving design funding for new cycleways in Peterborough.
Risks Ahead
The report acknowledges that financial risks remain. Chief among them is “timing risk, with capital expenditure currently outpacing income in the next two years.”
- “The City of Cambridge Culture programme is set to close.”
Unless project schedules are adjusted, the Authority may have to rely on short-term borrowing to bridge the gap.
The coming months will also be decisive for transport policy. With the national £3 fare cap set to run until March 2027, the Authority must decide whether to fund its own long-term discount scheme on top.
What Happens Next
The Board will return in November with a draft budget for 2026/27 and an updated Medium-Term Financial Plan. This will include the outcome of the transport workshop and feedback from constituent councils.
- “The biggest slippage is in Strategic Transport, where grant agreements with the Highways Authorities are yet to be put in place.”
For now, the key message from the update is that while the Authority’s finances are stable, the pace of delivery remains a concern. As the report itself states, “capital expenditure is behind profile,” and unless that changes, residents may see fewer new projects on the ground than promised.
