The government has cancelled the A303 Stonehenge tunnel and the A27 schemes.
Yesterday chancellor of the exchequer Rachel Reeves told the House of Commons that the new government had inherited and undisclosed £22bn hole in public spending. As part of cost saving measures, road schemes were being reviewed. She specifically mentioned the A303 (Stonehenge tunnel) and the A27 (Arundel bypass) projects but was ambiguous about whether they were being paused, subject to review, or officially cancelled.
The chancellor said: “We have seen from the National Audit Office the chaos that the previous government presided over. Projects over budget and delayed again and again. The spending audit has revealed nearly £800m of unfunded transport projects that have been committed next year.
“So my right honourable friend the transport secretary will undertake a thorough review of all these commitments. As part of that work, she has agreed not to move forwards with projects that the previous government refused to publicly cancel, despite knowing full well they were unaffordable. That includes proposed work on the A303 and the A27.”
Cancellation of Bam Nuttall's £350m A27 Arundel bypass project was an election manifesto commitment for the Labour Party so its fate looked already set. The Stonehenge tunnel though remained subject to a decision and only this month government officials were defending the scheme to UNESCO, which was considering putting Stonehenge on its list of "world heritage in danger" in light of the roadbuilding plans.
However, Treasury documents published after the chancellor's 29th July statement on public finances confirm that the A303 Stonehenge tunnel project is not just being reviewed but has been cancelled.
"The government is cancelling the A303 Stonehenge tunnel and the A27 schemes. These are low value, unaffordable commitments which would have cost £587 million next year,” states the Treasury document, Fixing the foundations.
The entire A303 Amesbury-Berwick Down upgrade scheme was budgeted at £2.5bn. A Spanish/ Italian/Austrian joint venture of FCC Construcción (42.5%), WeBuild (42.5%) and BeMo Tunnelling (15%) – calling themselves MORE – was selected for the £1.25bn main construction contract more than two years ago, back in May 2022.
Tom Holland, celebrity historian and president of the Stonehenge Alliance, said of the project's cancellation: “This is wonderful news. This entire monstrous project, a proposal to drive a gash of concrete & tarmac through our most sacred prehistoric landscape, should never have got off the drawing board. That cancelling it will also save £2.5bn is obviously an additional perk.”
However, lawyers are warning that cancelling projects is never entirely straightforward.
Dominic Lacey, partner at law firm Eversheds Sutherland, said: “Whenever major projects go under the knife the firms tied to those projects will look at their compensation entitlement for termination or suspension. This is not just a matter of lost future revenue, but demobilisation costs and penalties for the cancellation of procured long-lead items – which have become increasingly relevant with disrupted international supply chains and materials shortages.
“The headline of today’s announcement will be a halt on work, the ripple effect will depend on the exposure of the supply chain and their ability to recoup de-mobilisation and cancellation costs.”
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