Inflation and age of building send costs on Manchester Town Hall revamp up by close to £70m

Lendlease is set to ask Manchester City Council for extra £29m interim funding for its £305m restoration of the city’s grade-I listed town hall because of rising costs on the job. 

A progress update issued by the council revealed hyperinflation in the construction industry, delays caused by the covid pandemic and other “unpredictable factors” had resulted in a £67m hit on the project. 

A previous statement last October warned the problems would likely necessitate additional funding without stating a figure, and the latest update said that the nine months since had revealed “further challenges”. 

“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,” it said. 

Work to the roof of the building, a gothic revival masterpiece designed by Alfred Waterhouse and completed in 1877, revealed extensive corrosion, cracking and splitting to Victorian cast iron drainpipes, which contributed to delays due to the long lead-in times for cast iron. 

The creation of four new lift shafts to improve access have also been complicated by “idiosyncrasies” in the existing infrastructure of the building, with floors, chimney flues and other vertical spaces “improperly aligned or varying in size”, resulting in delays to allow redesign work. 

Further delays have been caused by a backlog in the availability of fire safety testing, made necessary by the introduction of more stringent fire safety standards post-Grenfell. 

According to the council, the project’s contingency budget would have been able to absorb almost all of the extra costs outlined above, if not for the extreme inflation in the construction market. 

The council’s executive has been asked to approve the additional £29m, which would be attained through borrowing, when it meets later this month. 

While the job is now 60% complete, the council has not announced a new completion date, despite admitting the original July 2024 target would need to be pushed back. 

>> From the archives: Alternative designs for Manchester Town Hall, 1868 

It added further discoveries about the condition of the building, which would result in greater work than anticipated, could emerge as work continues to open up the town hall’s roof through the remainder of the year. 

According to the report, if the programme was extended to accommodate all the delays experienced to date, it would add up to two years, but the council said the project team was working to shorten this timeframe. 

Deputy council leader Luthfur Rahman said: “This is the biggest heritage project currently being undertaken in the UK.  

“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.”