Independent watchdogs have blamed the city council for the Bristol Beacon refurbishment costs more than doubling. Number-crunchers Grant Thornton say the local authority “underestimated the complexity and difficulty” of the concert hall’s revamp and that its “failure” to have effective arrangements in place caused the bill to spiral from £52million to £107million.
The auditors’ assessment in their 2020/21 interim annual report, which has just been published, comes weeks after it was revealed the building is valued at zero pounds in Bristol City Council’s accounts and that the authority has already written off £39million on the project. On-site investigations found the Victorian building’s structure to be a “worst-case scenario” which saw the council’s share of the bill spiral from £10million to £54.5million.
The additional funding was approved by mayor Marvin Rees’s Labour cabinet in March last year with support from cross-party scrutiny councillors amid concerns about simply letting the former Colston Hall “disintegrate” in the city centre. In its value-for-money report, presented to the authority’s audit committee on Monday, June 27, Grant Thornton said: “The council underestimated the complexity and difficulty of the redevelopment of the Bristol Beacon and did not have effective arrangements in place throughout 2020/21.
Read more: Bristol Beacon valued at zero pounds in city council accounts despite £107m revamp
“The failure to have effective management arrangements in place from the start of the project and to have any cost certainty before entering into the contract has resulted in delays and increased costs. The council has strengthened the management and project management arrangements for Bristol Beacon, but these new arrangements are not yet consistently applied across the council.”
Grant Thornton did not identify any “significant weaknesses” in the authority’s value-for-money arrangements in 2020/21 but identified 13 improvement recommendations, including taking steps to avoid a repeat of the Beacon financial calamity It said: “We recommend the council should continue to ensure realistic capital budgets are set so that the level of slippage is reduced; and actively monitor the redevelopment of the Bristol Beacon and learn from this project.”
The auditors said this was to ensure “consideration is given to how complex capital and heritage buildings could have better cost certainty and allow for over-optimistic outcomes” and to ensure “consistent, robust and effective management arrangements are introduced, including technical expertise to enable the council to hold its contractors and third-party support and advisers to account”. They said the local authority “took steps in 2020/21 to address the situation, bringing on board additional capacity and technical specialist expertise”.
“Therefore, we do not consider this to be a significant weakness,” the report said. "Whilst we recognise that effective project management arrangements may not have significantly changed the outcome, they would have ensured the council was aware of the escalating risks sooner, thereby reducing the costs required to address the situation and reduce the amount of time the venue has been closed.
“The council should learn from the Bristol Beacon project and ensure all capital projects have effective and rigorous project management arrangements in place.” Grant Thornton said the authority had not yet introduced this across the council and had instead focused resources “at project level with a view to rolling out the approach across portfolios and the whole of the capital programme at a later date”.
Tory Cllr Richard Eddy asked at the committee: “Is the figure of £107million fairly realistic or could we be faced with a bill of £120million or £130million in a few months’ time?” Grant Thornton partner Jon Roberts replied: “We couldn't possibly comment on that level of detail but what we can say is the arrangements themselves are much stronger now than they were in the early stages of the project so those figures are more reliable.”
The renovation of the council’s freehold building began in 2018 and was originally estimated to take two years, the report said. It said: “Prior to agreement of the contract, there had been limited exploration undertaken to understand the extent, scope and condition of the building.
“Bristol Beacon was a major arts venue and the intention was to minimise the length of time the venue was closed, and as a result the contract was agreed and the works began very shortly after closure. As a result the full extent of the work and costs was not known until the work had begun and been assessed in 2020/21.
“Under the contracts, all costs fell to the council and the volume and nature of the issues uncovered since work started on redevelopment have far outstripped the worst-case scenarios contemplated by the original calculations in 2018.” A city council management comment in the report said: “A delivery framework has been developed and internally audited.
“It has received a ‘reasonable’ assurance rating with the management action to implement across the whole capital portfolio, to move to ‘substantially’ assured. It is being used on all strategic partnership commissions and is currently being piloted in city transport with a view to full adoption by autumn 2022.”
It said a capital portfolio management office was being established to coordinate the adoption of the delivery framework and that “monthly board meetings and highlight reporting provides high quality corporate insight and grip on the project”. Bristol City Council has been asked to comment further.
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