Major plans for a new leisure centre and theatre in East Renfrewshire will be delayed and scaled back due to soaring costs.
Councillors have taken the decision to postpone replacing Eastwood leisure centre for two years as rising inflation and volatile interest rates pushed up the project price.
They also decided to reduce the swimming pool from 50m to 25m and build a four court games hall instead of six.
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It is hoped the smaller scheme, forecast at £52m, will allow work to be completed within the £55m budget already agreed by councillors rather than the increased cost of £67m.
Council leader Owen O’Donnell, Labour, said: “We have a responsibility, not just for the short-term budget, but also the long-term delivery of services to the people of East Renfrewshire.
“We’d like to keep the original budget approval, the £55m, for the project that was originally agreed but to defer the construction start for two years. This is to allow the revised design to be prepared and reviewed by council.”
Cllr Tony Buchanan, the SNP group leader, backed the same option as the Labour leader but called for work to begin as quickly as possible. However, his amendment lost out in a vote.
He said: “I think there is a significant risk of delaying it for two years. Not only a risk in terms of the current capacity and the current building, which could give up the ghost at any time.
“That two-year delay could be significant for losing custom and not being able to deliver for a number of people. I appreciate the difference in interest rates, but in two years time, construction costs could have gone up significantly and could potentially wipe out that difference, if not cost more.”
Labour’s motion, with the support of the Conservatives, passed by nine votes to six for the SNP amendment. Cllr David Macdonald, independent, abstained.
The original brief had included a new theatre, a 50m pool, a 20m pool, a family fun pool and a six court games hall, but the cost for the full project was expected to reach £67m.
Other options presented to councillors included reducing the scope further, building a new leisure centre but refurbishing the theatre or refurbishing the whole venue. There was also an option to retain the current building and carry out essential maintenance.
Council officials reported the existing centre does not meet current demand and estimated there is a maintenance backlog of around £14m. Refurbishing the centre would involve closure, and therefore no income, for up to 24 months.
Councillors were also told refurbishment costs could be “frustratingly higher than you’d like” as they involve “managing issues which simply take longer to resolve”.
Cllr O’Donnell said the council had to “balance the fact that we have an end-of-life leisure centre which is not big enough to meet the needs of our growing population, against the very difficult financial constraints we are under”.
“Since covid struck, the cost of the project increased significantly, reflecting ongoing construction cost increases. In the last few months there has also been instability in energy prices, interest rates and general inflation.”
East Renfrewshire is expecting to face a £30m budget shortfall over the next three years. Cllr O’Donnell said the two-year deferral would “allow for £5m of revenue savings to be taken”. “Obviously that is important for us, considering the huge budget challenges this council faces,” he added.
The delay will also allow “more certainty over what’s happening with interest rates and greater clarity on energy costs”, the council leader said.
Officials reported the deferral could lead to more certainty on interest rates and reduced borrowing costs, but it could also cause construction costs to rise and increase the risk of the existing leisure centre failing.
A report to councillors stated a two-year delay could see construction costs increase by around £7m.
Cllr O’Donnell said he recognised there were “real risks” with delaying the scheme, but “ultimately it’s a judgement call and a balance of risk management over time and understanding the budgetary pressures we have at the moment”.
Cllr Gordon Wallace, Conservative, said given “dramatic” cuts are “coming round the corner” he supported the decision to delay the project.
A decision on the leisure centre had been postponed in October to allow council officials to review rising interest rates and energy prices.
Some councillors raised concerns that the decision was being “rushed”. Cllr David Macdonald said: “I would have liked further time to discuss these matters with my constituents. We received this paper yesterday, one day before the council meeting.”
The council’s chief executive Lorraine McMillan said: “This is not a new project, this is a project that has been discussed and scrutinised by members throughout.”
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