Manchester Town Hall refurb to overrun by £67m and two years

The cost of the refurbishment of Manchester City Council Town Hall has soared by £67m and the project faces a two-year delay.

The massive ‘Our Town Hall’ renovation of the Grade I-listed Victorian building was due to finish in July 2024, at a cost of £328m.

But an update by the council has revealed the impact of hyperinflation and delays on the project.

A previous update in October 2022 revealed that the combined impacts of ongoing factors, including hyperinflation in the construction industry, the knock-on costs of delays from the COVID-19 period and other emerging factors were likely to mean that extra funding was required to complete the project and that its original completion date of July 2024 would need to be revised

Since then, the council said further issues have occurred. Work to the roof area has revealed that the Victorian cast iron drainpipes and gutters are extensively corroded, cracked or split. None of these problems were visible before access was made available. Cast iron is currently a rare commodity with long lead-in times for deliveries which have contributed to delays.

Also, more stringent post-Grenfell fire safety standards mean that the fire performance of all materials being used, and the combinations they are being used in, has to be certified in laboratory tests or by the judgement of an independent fire engineer. A backlog in the availability of such testing across the construction industry has also contributed to further delays.

Overall, it is estimated that hyperinflation and various delays have had a £67m impact on the project.

The council said its project team has worked hard to mitigate all pressures and risks and if it were not for the very high inflation costs it is likely that the project’s contingency budget would have been able to absorb almost all the extra costs.

But now, the council’s executive, which meets on July 26, will be asked to approve an extra £29m in interim funding to complete a key part of the construction phase, which will be funded through borrowing.

However, more could be needed, the council warned.

While the ‘construction’ phase of the project is now 60% complete, there will be extensive delays.

The authority said that, by the end of this year, ongoing work to open up the Town Hall roof – with the possibility of further discoveries being made about the condition of the building which could mean more extensive work than originally anticipated is required – will give much better certainty about final costs and timescales.

A request for whatever further additional funding is needed to complete the project will then be made in January 2024. This would also be funded through borrowing.

The project’s end date will also be confirmed in January 2024.

The report revealed that, were the programme to be extended to accommodate all of the delays experienced to date, it would potentially add up to two years to the end date, but the project team is working intensively to shorten this timescale and finish the project as early as possible.

Until this programme is agreed the final costs of the project can’t be confirmed.

Deputy Council Leader, Cllr Luthfur Rahman, said: “This is the biggest heritage project currently being undertaken in the UK. It is benefitting Manchester people now, through job creation and spending with city businesses and it will continue to benefit them for generations to come by safeguarding and improving access to this wonderful building and its artefacts, as well as delivering a transformed and enlarged Albert Square as a world class events space.

“There has been considerable national interest in what we are achieving here, including from the team working on the similarly challenging restoration of the Houses of Parliament.

“The length and complexity of the project is such that it has been buffeted by some unprecedented challenges, the cost impacts of which are magnified because of the sheer scale involved.

“Nobody is pretending this has been easy, but the end result will be something truly special, a source of pride and a remarkable asset for Manchester.”