Manchester's new flagship arts centre will cost almost double what was budgeted for before work started with the total spend set to top £200m. The Factory International project will require an additional £25.2m to meet rising construction costs, according to a report published today (October 3).
The arts centre which is being built on the former Granada TV Studios site is anticipated to attract up to 1.15m visitors a year when it opens in June 2023. The unique building at the heart of the St John's regeneration area will be the permanent home of Manchester International Festival with events planned all year round, contributing an estimated £1.1bn to the economy over a decade.
However, the project which was initially due to be completed by 2019, has been heavily delayed and suffered further set backs due to the pandemic. Now, unprecedented levels of inflation, workforce shortages and the ever-increasing cost of materials have been exacerbated by the war in Ukraine.
READ MORE: Town hall's £325m restoration at risk of running over budget due to rising costs
Most of the funding for this project comes from the government and Arts Council England, but the council has had to increase its own contribution. Manchester council has already committed £55.4m towards the major project, and is now considering borrowing cash as part of its plan to finance it further.
Of the £25.2m required, £10m will be funded from the council's capital budget, with the remaining £15.2m to be borrowed and underwritten by the town hall. The local authority will also underwrite Manchester International Festival’s increased costs for the fit out of the building which is 'critical for the venue to operate', but has inevitably been driven by up to £7.8m due to soaring inflation.
It is hoped that the council will recover a 'significant proportion' of the capital costs through the naming rights for the arts centre and further public funding. Deputy council leader Luthfur Rahman said: "Factory International will be an incredible asset for Manchester.
"Not only will it strengthen the city’s reputation as a nationally and indeed globally important centre for the arts, it will also help stimulate and sustain our fast-growing cultural sector which contributes £1.4bn to our economy every year. It will act as a major training centre for Manchester people pursuing careers in the arts.
"Factory International will further create and support jobs in the hospitality sector by attracting hundreds of thousands of visitors to the city every year. Sitting in the heart of the St John’s Quarter it has already helped attract investment and job creation here and will continue to do so.
"It will be inclusive and inspiring – with plenty of free and low cost events and opportunities for Manchester people to get involved – as participants as well as audiences. It’s an audacious project and with that comes challenges, especially when set against a volatile economic backdrop, but the ongoing benefits for many years to come will far outweigh the one-off cost. We must not lose sight of that."
The report will be considered by a scrutiny committee on October 11 and the executive will be asked to approve the increased budget when it meets next. The resources and governance and scrutiny committee will also discuss the restoration of Manchester Town Hall which is at risk of exceeding its £325m budget by around 5 pc, although no additional funding has been requested yet.
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