The latest update report on the Our Town Hall project spells out the challenges it is continuing to face and the impacts these will have on its timescale and budget.
Good progress has been made since the last update to the Council’s Resources and Governance Scrutiny in October last year, with the ‘construction’ phase of the project to repair, restore and bring the Grade I-listed Victorian gem up to modern safety and accessibility standards now 60% complete.
The project continues to perform strongly against its objective to deliver economic and social value for Manchester, with the maximum positive impact for residents and businesses and a genuine legacy in construction skills. More than 57% of its spending is with Manchester businesses (against a baseline target of 40%) and 47% of those working on the project live in the city (against a baseline target of 30%.) Some 254 jobs have been created in the project team and 147 apprenticeships (including 54 higher level apprenticeships.)
Budget and timescales
In the previous October 2022 update it was warned 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 additional funding was required to complete the project and that its original completion date of July 2024 would need to be revised.
The nine months since then have seen existing pressures continue and further challenges discovered. Although extensive survey work was carried out in advance, there are some issues which can only emerge once the project team reach previously inaccessible areas in the fabric of the building.
For example, 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.
Physical interventions to create four new lift shafts to improve access in the building and to install new pipes, ducts and wiring have been complicated by the idiosyncracies of the building. Floors, chimney flues and other vertical spaces used to accommodate infrastructure are improperly aligned or varying in size, which has caused delays to allow redesign work to take place.
More stringent post-Grenfell fire safety standards also 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 in the construction industry – which saw material prices increase by 44% across the sector between July 2020 and June 2021 alone – and delays caused by the Covid pandemic and other unpredictable factors have had a £67m impact on the project. The project team have 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.
The Council’s Executive, which meets on 26 July 2023, will be asked to approve an extra £29m interim funding to complete a key part of the construction phase. This will be funded through borrowing and will not impact on service budgets.
Next steps
By the end of this year ongoing work to open up the Town Hall roof – with the scope for further discoveries being made about the condition of the building which may mean more extensive work than originally anticipated is required – will be far enough advanced to 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 discloses 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 cannot 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.”
