York Station Gateway Now £60.1m, £34m Over First Budget

The forecast cost of the York Station Gateway is now £60.104m. The scheme started with a budget of £26m. That is £34.1m of cost growth on a project that is still years from finishing.

Both figures come from City of York Council’s own documents, not from an outside estimate. The £60.104m forecast is in the Capital Programme Outturn 2025/26 report that went to the council’s Executive on 7 July 2026. The £26m original budget is recorded in an internal audit by Veritau, the council’s auditors, issued as final on 21 January 2026.

Executive members voted unanimously on 7 July to move £5.4m from the council’s Integrated Transport budget to cover the latest increase.

How the cost got here

The scheme demolished the Queen Street bridge and is rebuilding the road layout and public realm outside the station. It is split into five packages, three of which have barely started.

The cost record runs as follows:

• £26m, the original budget, for the whole scheme including all five packages
• £54.7m, the forecast reported to the Executive in July 2025, which required an extra £18.5m of funding. £14.5m of that came from diverting money from the York Outer Ring Road project, and the rest from York and North Yorkshire Combined Authority funding
• £60.104m, the forecast as at April 2026, after a further £5.4m

The council spent £11.621m on the scheme in 2025/26 alone, most of it on Package 2, the highways and public realm work in front of the station.

Where the extra £5.4m went, and where it came from

The July report breaks the latest increase down. Roughly £0.9m is professional fees and council staff time on Package 2. £3.9m is increased contractor costs as at 31 March 2026. About £0.6m covers prolonged professional fees and council resource on Packages 3 and 4.

Package 2 was due to finish in January 2026. The report says it will now run to Summer 2026, and lists what caused the delay:

• the W2 retaining wall, built around the remnants of the demolished Queen Street bridge, could not be designed to programme, and the revised design was more complex than the tender scope
• a Victorian attenuation tank for the portico drainage was found during excavation, over a metre down, on no historic plan and undocumented by the rail industry. It had to be emptied of silt and backfilled, and the drainage redesigned around it
• a structural survey found the old bus stop canopy outside the portico was unsafe, stopping work for around five days before demolition
• a manhole outside the station had to be relocated through trial holes because the area was congested with services
• ducting laid for Northern Powergrid’s high voltage cable was found to be defective and needed remediation
• the recorded road levels outside the station were wrong in one place, so a section of carriageway had to be dug out and rebuilt
• the substation cannot be energised until a lease is signed, which is held up by a disagreement between Northern Powergrid and the rail industry over access rights to station land

The £5.4m is not new money from government. It is being taken from budgets already set against Integrated Transport schemes, made up of:

The largest single element is council borrowing, which is repaid from the revenue budget over time.

What the council’s auditors found

Veritau’s report, Contract Management: Major Project Delivery, reviewed contract management on three major capital projects and went to the council’s Audit and Governance Committee on 11 March 2026. It gave an overall opinion of Limited Assurance, the second lowest of the four grades, and raised one critical finding, one significant finding and two moderate ones.

The critical finding is about the Station Gateway. Its wording is blunt: “Weaknesses in the management of the York Station Gateway contract and the project have resulted in significant overspend and delay.”

The audit summarised the causes officers themselves identified. Among them:

• the council entered the construction contract “at risk”. Legal agreements with statutory undertakers were not sufficiently progressed, or were not in place, before the contract was awarded
• an officer decision report published in August 2024 recorded accepted changes but did not explain that the option chosen would attract prolongation costs likely to exceed £1m
• in the early stages there was no project management office, or sufficiently resourced equivalent, to run a project of this scale
• contractor accommodation was not secured during the tender phase, delaying the contract start and adding cost
• some technical issues were not well understood, including inadequate substation provision in the original costings

The second finding, rated significant, is about reporting. Monthly highlight reports to the council’s management team first covered the project in April 2022 and said it would be delivered within budget. The rating was upgraded from amber to red only in February 2024. The March 2024 report gave the overspend as £7.5m; the reasons were not set out until October 2024; the £18.5m figure did not appear in a highlight report until May 2025.

In the auditors’ words, the reports “did not report any significant overspend for two years before then reporting a significant £7.5m overspend in March 2024”.

The council’s management response points to staff turnover, saying the council “has experienced an exceptional period of change in terms of staffing since the start of the project” and that attempts to bring in interim support were “only ever ‘playing catch-up’”. Eight actions were agreed, all owned by the Director of City Development with a deadline of 31 March 2026. They include a gap analysis of the project management office, a restructure of project management resources, a dedicated construction and commercial contract management function, and consideration of replacing a qualified quantity surveyor post.

When it actually finishes

The audit report, written in January 2026, records the project as “due to be completed by early 2027”. The July 2026 capital report describes a later timetable.

Progress at 31 March 2026, by package:

Package 3 is still in design, with works planned to start in Spring 2027 and run for about two years. Package 4 is also expected to start on site in Spring 2027 and take about a year. Package 5’s main works were due to start in Summer 2026 and finish in Summer 2027.

On those dates, work on the Station Gateway runs into 2029, two years beyond the completion date recorded in January’s audit.

What it means for you

If you travel through the station. Package 2 was meant to be done in January 2026 and is now scheduled for Summer 2026, so the bus stands, taxi arrangements and pedestrian routes around Station Rise and Queen Street stay subject to change. Check our York roadworks and travel page before driving into the city centre, and our train times to London page for connections.

If you use other transport schemes. The £5.4m came out of the Integrated Transport budget, which funds smaller highway, crossing and active travel schemes across the city. Money spent at the station is money not spent elsewhere, and £3.785m of it is borrowing the council has to service.

If you want to follow it. The Executive next meets on 9 September 2026, and the Audit and Governance Committee on 16 September. Agendas are published five clear working days beforehand and anyone can register to speak. Our York planning news page tracks the applications behind the city’s bigger schemes.

Sources

• City of York Council, Capital Programme Outturn 2025/26 and Revisions to the 2026/27 to 2029/30 Programme, report to Executive, 7 July 2026, paragraphs 131 to 138
• City of York Council, Executive decisions, 7 July 2026
• Veritau, Contract Management: Major Project Delivery, internal audit report, final 21 January 2026, published as Annex A to the Update on Major Projects item at Audit and Governance Committee, 11 March 2026

Parts of the audit report are redacted in the published version. Figures here are taken only from the unredacted text.