Councillors to consider latest stage of £131m cultural building The Factory

A report outlining progress on The Factory, which will be one of the largest purpose-built cultural buildings in the world and deliver a £1.1bn boost to Manchester’s economy over a decade, will be considered by councillors this month.

As well as commissioning and presenting the world’s most exciting artists – building on the success of Manchester International Festival and attracting up to 850,000 visitors a year – The Factory will bring 1,500 new jobs to the city over a decade and help the next generation of creative talent to flourish in Manchester, offering a programme of backstage training and skills for people living across Manchester.

The Factory is already acting as the anchor for the wider St John’s creative neighbourhood, which will accommodate up to 6,000 jobs.

Its catalyst effect includes the recent announcement by Booking.com that they are investing £100m in Enterprise City over the next 10 years, creating hundreds of new jobs.

A building like no other, The Factory’s uniquely versatile structure – designed by world-leading architects Office for Metropolitan Architecture (OMA), founded by Rem Koolhas – will provide space for leading artists to make work of unprecedented ambition and scale.

Open year-round, it will be capable of hosting everything from epic concerts to intimate performances and immersive experiences – including dance, theatre, music, opera, visual arts, popular culture and innovative contemporary work, including the latest digital technologies.

Manchester City Council is leading the development of The Factory as part of its long-term economic strategy to bring jobs, skills and other opportunities for people in the city in which culture plays a pivotal role.

MIF will manage it and create the artistic programme for the world-class cultural destination.

The council’s resources and governance scrutiny committee, which meets on November 8, and its executive, which meets on November 14, will be asked to note progress so far and to recommend to full council, which meets on November 28, to approve an increase in the project’s capital budget.

A revised planning application was approved in July this year and the various land deals required to secure the site where The Factory will be built concluded in August.

Demolition and other site preparation works are taking place to enable main construction works to start in early 2019.

The new building will have a key role in the 2021 Manchester International Festival.

The majority of funding for The Factory is coming from national sources, with £78.05m Treasury investment agreed and a further £7m Lottery funding from the Arts Council going for approval in January 2019, which would take central funding to £85.05m.

This investment is only coming to the city because of The Factory. A further £5m will be generated through fundraising.

The Factory has also already secured £9m a year of revenue (running costs) funding from Treasury for at least three years, managed by Arts Council England.

This new funding recognises the important national role The Factory will play.

It is proposed that Manchester City Council’s contribution to the project’s capital budget is increased by £18.97m to £40.57m out of a revised overall project budget of £130.62m – making the city’s contribution still less than a third of the overall cost.

The increase would be funded entirely through receipts from sales of council-owned land, which has significantly increased in value during the extended design period.

The one-off cost will not impact on any other council budgets and land will still only be sold where its future use contributes to the city’s overall strategies.

The Factory is a unique building with no direct precedents. This uniqueness, and its sheer ambition, involves a complex design and delivery process.

Learning from the experience of major cultural construction schemes elsewhere, where significant overspends have been identified midway through construction, The Factory team has carried out a robust review of all elements of the building to ensure that any potential issues are identified and tackled now – at the design stage – rather than further down the line when any changes would be more costly.

This approach has led to the early identification of increased costs, but ensured a higher degree of certainty around the budget and overall programme.

Among the reasons for the cost increase is higher rates of construction inflation – currently around three per cent a year – as a result of the sheer amount of development underway in the city. This accounts for £5.5m of the increase.

The revised budget allows £5.8m for contingencies.

Sir Richard Leese, leader of Manchester City Council, said: “There is nothing like The Factory anywhere in Europe, let alone the UK, and its game-changing impact for Manchester and the North of England cannot be overstated.

“That’s why it has been able to attract so much central government funding and is such an exciting prospect.

“Compromising on The Factory’s quality and ambition would have undermined its uniqueness, its purpose and the benefits it will bring.

“Culture already plays a crucial role in the economy and wider life of the city and The Factory will be a major new destination which will take this to a whole new level.

“It’s a bold and ambitious undertaking and such projects do not come without complex challenges which we have tackled head on now so we can be confident going forwards.”

He added: “But The Factory will also bring unprecedented opportunities. The very fact of its presence at the heart of the new St John’s creative neighbourhood has already helped attract hundreds of new jobs there, and is anchoring further investment.

“The Factory will bring a £1.1bn boost to the city’s economy in its first decade alone and around 1,500 jobs, a leading training centre for young people wanting to pursue careers in all aspects of the creative arts and links with local artists.

“And on top of all this it will be a showcase for some of the most stunning art on the planet.”

John McGrath, chief executive and artistic director, Manchester International Festival, said: “The Factory is going to have a major impact on the lives of people living across Manchester and will transform the cultural scene in the UK.

“The Factory will provide space on an epic scale for artists to make extraordinary work and be a global meeting place, where everyone is invited to take part.

“It will play a key role in the life of the city’s residents, through the jobs it creates and its pioneering programme of skills, training and engagement, benefiting local people and the next generation of creative talent.

“It will also strengthen Manchester’s global reputation as a world-class centre for culture, creativity and digital innovation and as a major destination for national and international visitors.”