Lendlease’s £325m restoration of Manchester Town Hall is facing a significant £17m overspend.
Work on the Grade I-listed building, which is halfway through the construction phase, is facing shortages of steel, plaster, stone and timber, in addition to uncertainty around energy costs and a “flight” of specialist labour.
In a progress update, which will be reviewed by the Resources and Governance Scrutiny Committee early next week, Manchester City Council admitted that even though the project was currently on budget, “the risk envelope has increased”.
It said that computer modelling had predicted a £17m overspend in the event of 100 per cent of the potential risks being realised.
The council added the project, to which Lendlease was appointed in 2020, had been in “mitigation mode” for the past 18 months during the Covid-19 pandemic.
Work on the heritage project encountered unforeseen issues, the council added, such as crumbling stonework, guttering and pipes, as well as falcons nesting in the clock tower.
Local paper the Manchester Evening News specified that the additional work meant “twice as much” stone was required.
Conservation rules bound the project to a specific type of sandstone. However, the quarry in Cumbria that had been supplying it ran dry. The council is reportedly in talks to reopen a quarry in Bradford, but extraction could take 15 weeks.
This, along with design and procurement challenges, has pushed the construction delivery date from May to June 2024. Following that, internal fit-out will be carried out before it is reopened to the public.
Councillor Rabnawaz Akbar, executive member for finance, 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.”
Lendlease has been approached for comment.