The £325m restoration of Manchester Town Hall could run over budget due to rising construction costs with delays possible, a council report has revealed. The major project - the biggest of its kind in the country - is currently keeping within its budget, but soaring inflation in the sector puts this position at risk.
Under the worst case scenario, the Our Town Hall project would need an extra £17m, councillors will be warned at a scrutiny committee meeting next week. The completion date of June 2024 could also be delayed by several months.
It comes as the cost of materials in the construction industry increased by more than 44 pc over the last two years, compounded by labour shortages. The unique nature of the painstaking work to restore the Grade I listed Victorian neo-gothic building requires specific materials to be sourced.
Together with inflation, an increase in material costs has been exacerbated by the war in Ukraine, particularly affecting timber sourced from Eastern Europe. According to a progress update published today (October 3), there has not been a single month since work started that the project has not had to be adapted, often due to 'uncontrollable' factors such as Covid or inflation.
But deputy council leader Luthfur Rahman says the project will be leave a 'legacy' for the city and help many Mancunians into careers in construction. He said: "This is the biggest heritage project currently under way in the UK and will provide a remarkable legacy for Manchester – improving public access to this remarkable building and its artefacts and safeguarding it for future generations."
The town hall has been closed since 2018, but the restoration work did not get under way until July 2020 having been delayed by three months due to Covid. During those two years, 'intrusive' surveys of the building were completed as the project team was able to get up close to previously inaccessible areas.
The seven-year programme, which is being funded by Manchester council and overseen by management contractor Lendlease, is around halfway done now. However, 'discoveries' along the way, together with the rising cost of materials, have led to increased pressure on the budget which was initially set at £325m.
This includes twice as much stone required to restore and replace the 14 million bricks of Spinkwell sandstone which were used to build the town hall. This is due to the worse-than-expected condition of the stonework which makes up the façade and the 34 chimneys which have now been restored.
Strict conservation rules require a specific type of stone to be used, but the Cumbrian quarry which has supplied these materials so far has now run dry. The council is now in talks about reopening a quarry in Bradford which could supply the rest of the stone required, but this would take 15 weeks to extract.
Delays have also been caused by a backlog in the fire safety certification process in the aftermath of the Notre Dame and Grenfell Tower tragedies. Bespoke solutions are being designed by the project team to meet modern standards without undermining the heritage of the 150-year-old building.
Most of the spending on the project so far has been with Manchester-based businesses and 45 pc of the workforce employed is local, exceeding targets. Some 237 new jobs have been created through the programme, as well as 123 apprenticeships, mostly for Manchester residents, and 110 work placements.
Around 90 pc of the work has already been procured, but computer modelling shows that if all of the potential risks occur, the worst case scenario would be a £17m overspend which would be around 5 pc more than had been budgeted. No further funding is being requested at this stage and some of the potential increases could be met by using the contingency funding already set aside.
The project team has also identified almost £4m worth of savings so far. Labour councillor Rabnawaz Akbar, who is the executive member for finance at Manchester council, said: "The project team have kept a tight grip on everything, but in a period of exceptionally high inflation and considerable market volatility, it's important that we're clear-sighted on the budget pressures and the work which is being done to minimise them."
The completion date for construction work is currently set for June 2024, but is under review, with warnings of potential delays spanning several months. The building will reopen to the public once construction work and internal fit out is completed with the opening date set to be announced later this year.
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