The future of the new £52m Ayr Leisure Centre will be decided next week.
Council leader Martin Dowey, had made the scrapping of the town centre facility, which is £7m overbudget, and refurbishment of the Citadel, one of the central pledges ahead of the local elections held in May.
However, rather than simply seek approval to shelf the development, councillors will be given three options when the full council meets on Thursday, October 13.
A report to the council reveals that the cost of the centre has spiralled from an estimated £36m in 2021 to £51m in August.
Another £1m has been added to the costs in just over a month.
However, the budget cap for the development is currently £45m.
The budget for the project has increased several times. An initial figure of £35.5m became £41m when the council set the formal budget.
Last October, it was revealed that inflation would result in a further increase of £4m.
A further £1m increase followed, citing the financial impact of the pandemic.
On August 30, the new administration was told that the costs had rocketed to £51m.
And the latest report indicates that the costs have risen by £1m in just over a month. With high inflation expected to continue for some time, the £52m would likely see further increases.
The report states that, with the project now £7m over budget, a decision on the future of the centre is required. The council has spent around £1.68m on the project.
The options to be laid out to councillors are:
- Redesign the new centre to reduce costs
- Seek additional funding to meet the £7m shortfall
- Scrap the project altogether
The redesign would involve significant changes to the approved plan. This would require amendments to the existing planning approval or, in a ‘worst case scenario’, an entirely new planning application.
The report points out that in the time needed to carry out this work could see any savings negated by the continued inflationary costs.
It adds: “This option would also result in a potential compromise of the spaces in the new leisure centre, e.g. a reduction in the size of the pool hall, or removal of certain facilities, such as the fitness suite or multi-use studios.”
This would also mean that the facility would not be consistent with the plan that went out to public consultation.
The second option would seek to have the existing budget increased, at the expense of other capital projects lined up over the next few years, either through delay or cancellation.
The costs could also be offset by levelling0up funds, should the council’s bid be approved by the UK government.
The final option, which would fulfil the pledge by the Conservative administration, would be to ‘reject’ the submission by HubSW, which is delivering the contract.
The rules state that, if the submission does not meet the affordability cap set by the council, it can be legally rejected.
The council would then be required to work with HubSW to address the reasons for the failure. A revised submission could then be resubmitted by HubSW within 30 business days.
If it is not resubmitted or continues to fail to meet the affordability cap, the project can be rejected entirely, with no obligations on either the council or HubSW.
The report states that it is ‘highly unlikely’ a resubmission would meet the affordability cap.
While £584k of the work already carried out is only relevant to the leisure centre, the £380k spent on surveys relating to the Arran Mall and Hourstons could still be made use of for alternative purposes.
The council has also paid out £713k on a non-returnable deposit for the Arran Mall, in-house staffing costs and consent fees.
The report also raises a legal issue related to a storage unit on the land being purchased by the council.
It reveals that the seller is not able to ensure that the storage unit is empty. The council is therefore seeking insurance that, should there be a claim to the tenancy of the unit, allow it to claim back the costs of the entire leisure centre development.
However, the report warns that the legal issues mean that, even with a payout, there was no guarantee that the council would have to clear part of the leisure development and reinstate the storage unit.
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