Cost of Manchester’s Factory up by £25.2m
The budget for the 143,000 sq ft arts and culture venue has risen to £210.8m due to increasing construction costs.
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.
Now, less than a year before the venue is due to open, Manchester City Council has said it needs another £25.2m to complete the project.
A total of £10m of this will be met through pre-approved contingency provisions. The remainder will be met through borrowing.
This will increase the amount the city council has spent on the scheme from £55.4m to £80.6m, an investment the authority said will be worth it in the long run.
“[Factory] is an audacious project and with that comes challenges, especially when set against a volatile economic backdrop,” said Cllr Luthfur Rahman, deputy leader of Manchester City Council.
“But the ongoing benefits for many years to come will far outweigh the one-off cost. We must not lose sight of that.”
In a statement, the city council said the existing budget “made reasonable allowances for contingencies” but that the extent of inflation and “considerable supply chain challenges” could not have been predicted.
Credit: Pawel Paniczko
Figures from the Department for Business, Energy and Industrial Strategy show a 26.4% increase in prices for all construction work since June 2021.
Following a £45m 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.
However, at a meeting next week, Manchester’s scrutiny committee is recommended to approve the additional borrowing.
In addition to increasing its spend on the construction phase, the city council will also underwrite Manchester International Festival’s increased costs for the fit-out of the building, which have also been driven up to £7.8m.
MIF will operate the building, to be used as the home of the biennial arts festival.
Manchester City Council may seek to recoup the £80.6m it has invested in the project – which has benefitted from £105m from the government – by securing a naming rights deal for the venue.
“Factory International will be an incredible asset for Manchester,” Rahman said. “Not only will it strengthen the city’s reputation as a nationally and indeed globally important centre for the arts, it will also help stimulate and sustain our fast-growing cultural sector which contributes £1.4bn to our economy every year.”
Read more about Factory International, where the project is up to and the plans for its opening.
£1475 per sqft. Wow! Hope it is worth it……….
By Rebel Wilson
So 91% over the original budget
By Lord of the Dance
2 points… £1,468 per sq ft is outrageous. Point 2 – the lefty council don’t believe it when developers try to explain inflationary pressures on viability, yet have experienced pretty much a 100% budget increase on a building which will hardly be used.
Total waste of council money which could have been used much better elsewhere.
By John W
” Audacious ” has a number of meanings, but in this case I think shameless would be more appropriate, to come in at £100m over budget is scandalous, but it will all be packaged up as a “triumph for the North”.
No doubt the original Manchester costings were submitted knowing a central government bail-out would arrive eventually.
By Anonymous
Who is the developer, contractor and project manager??!!
By Staggering
Nothing says cultural hub like the phrase ‘naming rights’
By Roger Bacon
It’s already mentioned below but £1478 per ft is some going
By TJL
I find it amazing that a city with so many venues snagged so much public funding for …another venue. What is different about this that could not be delivered from other city venues? Can someone enlighten me?
By Sceptic
Ive had and seen first hand other arts/creative orgs lose funding/opportunities because of how much Factory/MIF suck up resource wise in the city, it’s been a constantly drain for years and now even more money is being thrown at it with no one fielding any responsibility. Sure it will host some great exhibitions but at a large cost and not sure the people of Manchester have got value for money here.
By CityCentre
I’m just here for the “whaaaaat how much??” / “do they know there’s a cost of living crisis??” comments.
By Swiss Manc
I still can’t get over this. If the Council have £200m spare maybe they should be considering the entire regen of Piccadilly approach and gardens. The whole area is an embarrassment to the city and the vast majority of visitors have to experience it and have an entrance and exit association of Manchester city centre as a rough city.
By John W
There’s a need to be a public enquiry into the overexpenditure of the factory and also needs looking at the finances of the refurbishment of the town hall as well
Manchester City Council is in such a state with its finances.
By V
Ridiculous amount of spend, functionally it does look pretty interesting but in the flesh outside it looks a bit of pig
By DriveLid
Who has been in charge of this Liz Truss?
By Anonymous
In the above CGI, which is quite promising, they seem to have omitted the two huge student accommodation blocks that will loom over the building and completely dominate the setting.
By Allied Studentdom
It looks horrendous
By Anonymous
Remember The Lowry Centre and the massive £65m lottery grant that got from central government, now 20 years later we another mega arts complex.
By Anonymous
Great scheme worth every penny, I can’t wait for it to open.
By Anonymous
Total eye soar and no surprise on costs given the current climate and inflationary pressures.. with 12 months to completion the final costs will probably nearer £250m…
By Therealist
So much moaning. So many people reading and desperate to moan at anything and everything.
By Anonymous
Manchester is still playing catch up to the amount of central government grants gifted to the various institutions at Liverpool’s Pier Head down the years – I think we’ve still got a long way to go!!
By Anonymous
It always makes me laugh when people who have contributed nothing but empty headed thoughts on twitter or on boards like this think they have the slightest idea how major projects like this work. This will be amazing addition once completed. Thankfully the above people have absolutely zero say on what is built and where and never will.
By Anonymous
This sounds like a disaster
By Anonymous
Costs across the country are rocketing so it was inevitable that this would come in over budget. The design, in my view, is brilliant and the project will be a great success for decades to come.
By Monty
Who on earth did the due diligence on setting this contract up in the first place? It’s inconcievable that costs would double unless it was let on Stage 1/2 design without any cost control measures put in place. Shocking.
By QS
I think QS has made a very significant point on the form of procurement used by the Council. The Council’s report references Management Contracting as the form of procurement used – this needs a robust client side team to handle that approach and the Council’s team has clearly failed in its duty to the UK tax payer and the local Council Tax payer who have funded this scheme.
By Anonymous
White elephant
By Dan
Fantastic and will undoubtedly will be a great success with a lot planned for it already.
By Don
Ignore the cost, growing world class cities need many world class venues. This will join the growing number in the city and be a great success.
By Anonymous
Art and culture isn’t a nice to have, it’s an essential part of civilisation and City’s need more of it. It clearly doesn’t come cheap but I wouldn’t want to live in a city that doesn’t value it and invest in it. Manchester has world class universities, world class culture and is a place where people demand to be . Onwards and upwards
By Vulture
Firstly, the council were not responsible for almost two lost years due to COVID, that caught a lot of us, maybe all of us out. And hey, its Manchester, one of the UK’s most important, most vibrant, entertaining, up and coming cities! If you want progress, investment, ultimate stability, you’re going to have to stick your head above the parapet. Just hope it doesn’t end up being a brownfield site in 30 years’ time, we all need to make sure we support it when it’s up and running.
By mike beswick