The cost of the Bristol Beacon revamp has spiralled yet again by another £25 million and now stands at an eye-watering £132 million – almost three times the original amount.
City council taxpayers will have to sink even more cash into the money-pit refurbishment of the Victorian concert hall at a time when the authority has announced widespread cuts to services including social care, libraries, parks and the council tax reduction scheme for the poorest families.
Mayor Marvin Rees’s cabinet is set to approve the increased bill that will come from additional borrowing to be paid back at £2.3 million annually over the next 50 years, which means the local authority will have that much less every single year for the next half century.
Members are also expected to cut all funding to Bristol Music Trust (BMT) which runs the city centre venue on behalf of the council.
The latest hike follows a massive increase in the total cost less than two years ago, from £52 million to £107 million, which the Labour cabinet approved with the backing of cross-party scrutiny councillors.
Bristol City Council has already written off £69 million on the project – a figure expected to rise to £93 million because of payments due to main contractor Willmott Dixon – and the building, formerly the Colston Hall, is valued at zero in the authority’s accounts.
But papers to next week’s cabinet meeting reveal that the alternatives would be even more expensive and cause the reopening to be delayed by years “due to unprecedented volatility and uncertainty in the construction sector”.
Of the three options considered, ploughing on with the scheme with the aim of welcoming audiences again this autumn will cost £131.9 million.
But pausing the revamp and restarting in 12 months would increase that to £165 million, while stopping the work altogether and making the building safe would need more than £200 million.
So officers are recommending that cabinet takes the “least risk, least cost option” and completes the project at a total cost almost three times the original budget of £48 million.
A report optimistically called “Bristol Beacon – update on inflation, opening date and new funding decision”, to the meeting on Tuesday, January 24, said: “The impact of inflation and external influences on the budget has been significant and the complex and flawed fabric of the building has continued to cause problems negatively effecting [sic] time and cost.
“As the freehold owner of the building Bristol City Council agreed to be the accountable body for the overall project with ultimate responsibility to underwrite costs of development and ultimate funder of last resort including funding risk and construction risk.
“The building sits on a constrained site and has suffered from a lack of maintenance and modernisation with no major refurbishment for 60 years.”
It said that despite the pandemic, many of the findings remained valid from a 2017 study that predicted the refurbished venue would generate between £324.6 million and £412 million over 20 years to the economy, including £253.7 million to Bristol.
Last August the council insisted the building’s worth went “well beyond the bricks and mortar” and that the financial and cultural benefit would “ultimately dwarf” the repair costs.
But two months earlier, external auditors Grant Thornton criticised the authority for having “underestimated the complexity and difficulty” of the scheme and that its “failure” to have effective arrangements in place caused the bill to spiral from £52 million to £107 million – even before the latest huge increase.
Next week’s cabinet report, which is littered with typos, said finance experts Ernst & Young had carried out a value-for-money assessment to determine if it remained a “solid investment” for the council.
It found that the “entertainment and theatre sector has not yet returned to pre-pandemic economic outputs, with technological developments having the potential to impact demand in the longer term” and that “current economic climate challenges represent a risk to the project and the income potential from the running of the asset”.
Ernst & Young added: “Given the competition across the sector, particularly with the opening of YTL [Arena] in 2024, BMT will need to develop a unique selling point to differentiate it’s [sic] offering.”
The cabinet report said that while completing the project represented the best deal for the council, “risk still remains in terms of both milestone achievement and price risk”.
It said: “Given the level of investment in the asset that the Council has made it is imperative that a good value return is obtained moving forward, both in terms of social, economic and financial, although noting that the latter is unlikely to result in a solely financially beneficial return.”
The report said the council’s contribution to the refurbishment rose from an initial £10 million – about a fifth of the original £48million – before rising to £59 million (55%) of the £107 million in March 2021 and now a proposed £83.9 million, totalling 63% of the overall costs.
Other funders include the Arts Council England, Heritage Lottery Fund and the West of England Combined Authority.
The report said the council had given BMT £10 million of funding since the trust began operating the venue on a peppercorn rent to the authority in 2011 but that the lease would be renegotiated.