A major project to restore the Montgomery Canal could be scaled back because of financial constraints.

A report on the current state of the multi-million pound project to restore the canal as far as Newtown by the council's internal auditor SWAP will go before Powys County Council’s Governance and Audit committee on Friday (September 27).

That report says there is a medium risk that the project will not be delivered, having been commissioned to provide assurance that the canal's resources are being managed "as efficiently and effectively as possible”.

In February 2022, the council received Levelling Up funding worth £13.937 million from the UK Government, with the aim of opening up navigation of the canal all the way to Newtown and “unlock an unfulfilled resource” in Powys, becoming a tourist attraction for boaters, walkers and cyclists.

The project is led by the council in partnership with the Canal and River Trust, and a project board oversees the work.

SWAP assistant director Ian Halstead said: “The project is reported as not being on target and not within budget, but some issues are being addressed to mitigate this.

“There are many aspects of the project still to be completed.

“Overall, the deliverables are challenging and may not be achievable within the timescale and available budget.

“The council needs to be prepared for this eventuality and have a clear pathway identified that is agreed by the cabinet and stakeholders.”

Aberbechan Aqueduct over Bechan Brook.Aberbechan Aqueduct over Bechan Brook.

All funding for the project needs to be spent by the end of March 2025, while as of March this year £2.431 million had been spent, and £8.319 million of the total funding received

A number of scenarios will now be put to the new UK Government – which has changed since the report was written in July – to “consider revisions” to the original scheme and request an extension.

(Image: NQ)

If agreed at project board and by senior councillors in the Liberal Democrat/Labour cabinet a “project adjustment request” would formally be submitted to the UK Government to ask for the changes to be made.

Issues that have hampered the project according to the report include:

  • The need for public engagement.
  • Planning problems including land acquisition with bridges.
  • Councillor voting to implement a moratorium on selling council land during the last year.
  • Site visits from councillors.
  • Original cost estimates for two bridges being “unrealistic.”

The committee is asked to note the report and seek assurance that effective mitigation has been put in place to address the risks.