Early failures by council in Bristol Beacon revamp cost millions, report finds

The cost of refurbishing the iconic Bristol music venue almost tripled from £48million to £132million.

Photo: Matty Edwards

Reports 23rd July, 2024

Adam Postans (Local Democracy Reporter)

A long-awaited Bristol Beacon “lessons learned” report has found the project was potentially doomed as a cash catastrophe from the outset because no one was truly in charge until it was too late.

City council auditors Grant Thornton ordered the probe after blaming the local authority for the refurbishment’s costs almost tripling from £48million to £132million.

Two years ago, the finance watchdogs told the council it “underestimated the complexity and difficulty” of the Victorian concert hall’s revamp, saying it failed to have effective arrangements in place to stop the bill from spiralling.

Now independent consultants Arcadis have published their findings, and they make for damning reading about the early days.

Their report says the council ignored problems flagged by contractors working on the scheme about the state of the building, creating a “them vs us” environment.

It says the risks of costs spiralling were not properly assessed from the beginning and there were no contingencies in place if more money was needed, while the complexity of various funding organisations and other interested parties meant the council lacked flexibility if changes were needed.

The report, which is full of technical jargon and management speak, concluded: “Our findings indicate that the delivery of the Bristol Beacon was impacted by the inherent challenges associated with the complex stakeholder landscape as well as project specific factors, particularly those focused on project set up and initiation.”

Arcadis identified 14 high-level lessons learned to try to ensure similar major projects do not suffer a similar fate.

The consultants said the issues were not fully understood or addressed until the authority established a “project management office” (PMO) in January 2021 – almost three years after the organisation and other funders committed the original £48.8million budget.

Just two months later, once the extent of the Victorian concert hall’s “worst-case scenario” problems were known, these rocketed to £107million, later to become £132million.

One common criticism levelled at the council has been that it should have carried out more detailed investigations of the building before putting so much taxpayer money at risk.

One of Arcadis’s lessons learned said: “Due to the age, architectural design, and building construction of heritage buildings, it is common to come across unforeseen works that introduce an increased risk of scope change.

“Hence more detailed due diligence and investigations should be accommodated within the project programme to minimise the associated risks, acknowledging that further items may be uncovered as works progress due to the nature of the building.”

The report continued: “We understand there was an awareness that the building fabric and structure were in poor condition and risks were raised during the pre-PMO phase that they may be in worse condition than initially assumed.

“Interviewee feedback has noted the extent of surveying was constrained by multiple factors, including maintaining day to day operations, asbestos within the building, and funding constraints. 

“In our view the above may have resulted in redesign and contractual consequences to programme delays and increase in costs.

“However, we note that invasive investigations may not have revealed discovery items such as hollow columns and buried wells, which would only be uncovered during demolition, but they could have focused attention on risk around the poor condition of the building.

“It is recommended that sufficient time be allocated in the project programme to conduct the necessary intrusive works and detailed investigations when working with heritage buildings.”

The report said the project board “was not operating effectively during the early stages of the project” and that senior officers did not have the time or capacity to provide sufficient oversight.

While not mentioning him by name, it said the situation did not improve until Stephen Peacock – who recently left the council as chief executive to become the top officer at the West of England Combined Authority (Weca) – took charge when he joined Bristol City Council as executive director of growth & regeneration in 2019.

The report said: “Multiple stakeholders have stated the project team was inadequately resourced during the planning phase of the project, and roles and responsibilities of the project team were unclear at times.

“This was recognised by Bristol City Council in 2020 and appropriate controls (PMO) and leadership were subsequently implemented.

“Multiple interviewees have noted that the project management capacity especially at pre-PMO implementation stage was insufficient.

“This was exacerbated further by the backlog of contract variations which created an overwhelming administrative burden placed by the contract type.

“It appears the lack of effective engagement by the project sponsor(s) [people in charge] during the early stages of the project led to challenges such as poor communication and the development of an adversarial team culture. 

“There was a systematic improvement in leadership led by the executive director of growth & regeneration (project sponsor) in 2019 which culminated in improved decision making and prompted a reassessment of both management and governance structures.

“In early 2020, the appointment of a seasoned head of capital projects to enhance governance leadership and a project director to oversee project leadership was crucial.

“This move aimed to enhance performance through the establishment of a programme management office, resulting in a proper alignment of the project to accurately represent its scale and complexity.”

The report said there was a “step change” from 2020 that created a “one team” approach but that the situation was very different before.

It said: “Stakeholders felt that their input and contributions were not acknowledged or recognised appropriately across the project lifecycle which led to an ‘us vs them’ mentality.”

A spokesperson for Bristol City Council said: “We’re grateful for the effort Arcadis have put into developing this report and to all those stakeholders who took time to inform this review.

“It’s clear from this report that the refurbishment of the Bristol Beacon was a project of huge scale and complexity, which experienced unpredictability throughout its lifetime.

“The recommendations put forward by the report authors will provide valuable insight for current and future project management across the council’s estate, particularly projects that involve multiple complex financial arrangements and heritage assets that are likely to be in worse condition than first predicted.

“Whilst we welcome the recommendations made to improve current and future project governance, resourcing and delivery, these elements are only part of the full story of the Beacon’s refurbishment.

“What falls outside the scope of this review is the impacts of multiple external factors including the global Covid pandemic and subsequent lockdowns, and social distancing measures.

“The latter days of the project were also impacted by substantial inflation of material and energy costs plus labour shortages in the sector as development restarted following the pandemic.

“These factors were reported on by the authority in January 2023.

“Learnings taken from this report and our experiences of delivering a major capital project in the face of significant external factors are being shared across the authority.”