Cost of Aviva Studios passes £240m 

Another £22.2m will be tacked onto the budget this week, which means that the final cost of the 143,000 sq ft Manchester arts venue is comfortably more than double the initial estimate for the project. 

Once Aviva Studios is handed over, an estimated £241m will have been spent building it, with £93.3m of that coming directly from Manchester City Council. 

The majority – £106m – of the remaining £154m has come from various national pots: £78.1m Treasury funding, £7m Arts Lottery, and £21m via the Kickstart Capital Cultural Recovery Fund administered by Arts Council England.   

The remaining £39.3m came from external fundraising.  

Just an estimate 

Cllr Luthfer Rahman, deputy leader of Manchester City Council, was keen to stress that the £22.2m added to the budget this week is an estimate.

“The final sum required – including a detailed explanation for it and how it will be funded – will be brought to a forthcoming meeting of the council’s executive once it has been confirmed,” he said. 

“As with any major construction project, the costs will not be finalised until after completion when the final accounts are agreed. In the meantime, an estimated figure has been included in a routine budget monitoring report about our building and infrastructure projects in the interests of transparency.” 

The cost of the scheme rose from £210m to £218.7m in July when Manchester City Council signed off £8.7m of borrowing for the building. 

At the time, the city council announced there would be another, larger, cost increase in September, which is the one announced today. 

Defence and mitigation 

The city council has consistently defended the project and its spiralling budget, claiming the economic and cultural benefits of the venue will far outweigh the cost of construction.  

In addition, in June, the city council announced a naming rights deal for the venue with Aviva that could bring in between £25m and £30m over the course of the sponsorship agreement. 

Over the existing 30-year lease with Factory International, the authority expects to accrue £80m across various naming rights and sponsorship deals, which could cover the cost of its investment in the scheme. 

This figure would fall just short of covering the city council’s investment. 

It is estimated that Factory International could generate up to £1.1bn for Manchester’s economy over 10 years and attract up to 850,000 visitors a year. 

The venue’s soft launch earlier this year saw an estimated 250,000 people visit for Manchester International Festival. It will open officially in October. 

“[Aviva Studios] is a world-class addition to Manchester, which will add to the city’s cultural buzz, attract visitors and help create and support jobs,” said Cllr Rahman.

Five cost rises 

The city council’s final – estimated – £20m contribution is the fifth time the budget for the scheme has risen. 

The budget for Factory International was set at £110m when plans for the scheme were approved in 2017. This rose to £130m the following year and to £186m in 2020 due to the impact of Covid-19.  

Following the budget increase in 2020, the city council’s former leader Sir Richard Leese said the authority could not afford to contribute any more to the project.    

An additional £25m was pumped into the project last October, taking the budget to £210m.  

Designed by Office for Metropolitan Architecture, founded by Dutch architect Rem Koolhaas, Aviva Studios is being built by contractor Laing O’Rourke.