Guildhall project cost set to leap to £17 million

When you are in a hole stop digging  – or at least dig where the foundations need to be repaired

York Guildhall

It appears, from a report being considered by the Councils Executive on 8th May, that the cost overrun on the Guildhall development project could have been as much as £6 million. That was what caused officials to pull the plug on a contract with Interserve to redevelop the Guildhall complex.

Taxpayers had already been asked to underwrite an estimated cost of over £12 million for the Council’s plan to establish a “business centre” in the building.

There was no way even the most optimistic estimates of income would have covered the extra £300,000 pa interest costs on the borrowing.

Incredibly Councillors are now being asked to tender the work again with minor changes. Amongst these are a plan to move all building materials through St Helens Square during the 18 months construction period (rather than via the river frontage).

Roof terraces and extensions would be abandoned

Despite these changes, the estimated total cost of the project is now estimated to be an additional “£4-5 million”

“Business case” March 2017

That will be a direct charge on taxpayers as there is no scope for additional income from rents in what will be a smaller than originally planned building.

Significantly, officials provide no update on the business case for the “business centre” which is now clearly nonviable.

It was highly marginal under the old plans (see right) and was therefore labelled as “highly risky” with no private sector partner prepared to become involved

The Councillors are not even being offered the obvious option which would be to put the site on the open market and allow experienced entrepreneurs to suggest viable uses..

The Council has admitted that it has already spent £1.5 million on the project.

If the Council does seek new tenders for the business centre project, they face a major delay – probably until after the next local elections (due in May 2019).

If Labour were to be successful in that poll, they would be left picking up the pieces of a project which started to go wrong during their last tenure in office. They had from 2011 to decide what to do with the Guildhall complex but dithered for four years before passing the buck on to the incoming administration in 2015.

The listed buildings continue to deteriorate.The report say,s “work has identified additional repair and maintenance work particularly relating to the structural weaknesses in the tower and the estimates have risen from £2.5m in the 2017 report to between £3-5 million

With the annual maintenance bill continuing to grow, taxpayers will wonder just how they can now extract themselves from what has developed into a major financial black hole

If the market had been properly tested four years ago this crisis might have been averted.

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