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.