Town Hall refurb cost ‘could overrun’

Upgrading Manchester’s grade one-listed town hall could cost an extra £17m due to economic volatility and the rising cost of building materials, the council said.

The Our Town Hall project is 50% complete and scheduled to finish in 2024. While “excellent progress” has been made since work began on site in July 2020, the project faces multiple risks that could negatively impact both the construction timeframe and the budget, Manchester City Council warned in a report to be examined by the Resources and Governance Scrutiny Committee on 11 October.

“The volatile economic climate – especially as it is affecting the construction industry where inflation is particularly severe – allied with the impacts of ‘discoveries’ as work progresses, mean the budget for this highly complex project is under significant pressure,” the report said.

“Sophisticated computer modelling shows that if 100% of the potential risks occur, the realistic worst-case scenario would be a £17m overspend – equivalent to around 5% of the overall budget.”

The £320m council-led project includes the full restoration of parts of the Alfred Waterhouse-designed building including the Great Hall, together with refurbishment and reparation of the building’s external fabric, windows, and roof.

Accessibility improvements are also planned, together with the creation of a visitor centre within the town hall and external public realm works. The town hall was built in 1868. Planning consent for the refurbishment was awarded in January 2020.

Manchester City Council noted in its report that overall materials prices across the construction industry went up by 44.1% between July 2020 and June 2022, and the sector faced acute labour shortages, too.

In addition, the “unique nature” of the Our Town Hall project has meant that challenges additional to those identified in pre-construction surveys are being discovered as the project team accesses and uncovers different parts of the fabric of the building.

“In some cases, this means more extensive work is required than originally anticipated,” the city council said, pointing to crumbling stonework, guttering and pipes, and other unforeseen issues.

For now, “no further funding is being requested at this stage and the project team are working tirelessly to mitigate against challenges and reduce any potential amount”, Manchester City Council said in its report.

Almost £4m of savings have been identified within the project, and any potential budget increase could be partly met through contingency funding for inflation impacts set aside in the council’s capital budget, it added.

“Risks are being constantly assessed and addressed, but with only around half of the construction phase complete there is still a long way to go.”

Lendlease is the main contractor, and the project team also includes Purcell as architect, Mace as project manager, Ramboll as structural engineer, Planit IE as landscape architect, Arup as building services engineer, and Faithful + Gould as quantity surveyor.

Manchester’s executive member for finance, Cllr Rabnawaz Akbar, 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.”

Deputy leader Cllr Luthfur Rahman added: “This is the biggest heritage project currently underway 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. It will also help many Mancunians into careers in construction.”