A local authority has defended its decision to spend an extra £700,000 on unforeseen issues during works to a market town’s high street, describing the additional cost as “minimal”.

Hambleton District Council’s leadership told a meeting of the authority’s cabinet the extra funding for the £3.8m project to improve Northallerton High Street should be viewed in comparison with the £20m of investments the town centre had seen in recent years.

They said rather than an 18.5 per cent increase on the original £3.8m cost of the High Street scheme it should be viewed as a 3.5 per cent rise on all £20m of investments.

The Conservative-run authority’s deputy leader Councillor Peter Wilkinson highlighted how the £20m, which includes the £17m redevelopment of the former Northallerton Prison site, would see a digital innovation centre, a four-screen cinema and a York College campus in the town centre.

Coun Wilkinson said: “In addition as part of the High Street Fund we have delivered significant improvements to Zetland Street. When we originally purchased the prison site we made guarantees to the businesses on the High Street that the Treadmills site would complement, rather than take anything away from the High Street.”

He said the second phase of the £3.8m high street scheme had seen its cost rise by £704,000, including a £187,000 compensation payment to construction firm for 57 days delay.

Coun Wilkinson said supply chain issues had seen material costs rise up to 20 per cent, adding: “We are delivering this project through the most serious pandemic we have seen. I can’t underestimate the effects of Covid-19 in terms of supply of materials.

“From an engineering perspective we had to alter the depth of the sub-base, we’ve had to remove 18th century Georgian drains which were in very poor condition and no longer fit for purpose and we have had to move cabling which was too high in the ground in terms of current regulations. We have had to remove the former toilets outside the town hall and have experienced delays because of labour and supplies suffering from the issues of Covid-19.

“We have invested £20m and what we are talking about today is a 3.5 per cent increase in the cost of delivering this project. I have to say I am proud about what this council has delivered and invested in Northallerton. I believe the work that is being done on the High Street will increase footfall and assist the long-term viability of the town.”

Councillor Mark Robson added: “The significant one for me is it’s a £20m investment and given where we are the situation we have all had to endure 3.5 per cent increase is minimal.”