The costs of Manchester’s purpose-built cultural building The Factory has risen by nearly £19m, the city council has said today.

The Council’s Resources and Governance Scrutiny Committee,which meets on 8 November and its Executive,which meets on 14 November, will be asked to note progress so far and to recommend to full Council to approve an increase in the project’s capital budget at the end of this month.

The project which was meant to host next year’s International Festival and which was announced by the then Chancellor George Osborne, has been delayed.

A revised planning application was approved in July this year and the various land deals required to secure the site where The Factory will be built concluded in August.

Demolition and other site preparation works are taking place to enable main construction works to start in early 2019. The new building will now have a key role in the 2021 Manchester International Festival.

The majority of funding for The Factory is coming from national sources, with £78.05m Treasury investment agreed and a further £7m Lottery funding from the Arts Council going for approval in January 2019 which would take central funding to £85.05m. This investment is only coming to the city because of The Factory. A further £5m will be generated through fundraising.

It is proposed that Manchester City Council’s contribution to the project’s capital budget is increased by £18.97m to £40.57m out of a revised overall project budget of £130.62m – making the city’s contribution still less than a third of the overall cost.

The increase would be funded entirely through receipts from sales of council-owned land, which has significantly increased in value during the extended design period. The one-off cost will not impact on any other council budgets and land will still only be sold where its future use contributes to the city’s overall strategies say the council.

A recent review of the project identified a number of additional costs, including increased rates of inflation as well as the technical complexity of achieving the required acoustic standards for the building itself.The revised budget also allows £5.8m for contingencies.

Sir Richard Leese, Leader of Manchester City Council, said: “There is nothing like The Factory anywhere in Europe, let alone the UK and its game-changing impact for Manchester and the North of England cannot be overstated. That’s why it has been able to attract so much central government funding and is such an exciting prospect.

“Compromising on The Factory’s quality and ambition would have undermined its uniqueness, its purpose and the benefits it will bring.

“Culture already plays a crucial role in the economy and wider life of the city and The Factory will be a major new destination which will take this to a whole new level.

“It’s a bold and ambitious undertaking and such projects do not come without complex challenges which we have tackled head on now so we can be confident going forwards.

“But The Factory will also bring unprecedented opportunities. The very fact of its presence at the heart of the new St John’s creative neighbourhood has already helped attract hundreds of new jobs there and is anchoring further investment.

“The Factory will bring a £1.1 billion boost to the city’s economy in its first decade alone and around 1,500 jobs, a leading training centre for young people wanting to pursue careers in all aspects of the creative arts and links with local artists. And on top of all this it will be a showcase for some of the most stunning art on the planet.”

John McGrath, CEO and artistic director, Manchester International Festival, said: “The Factory is going to have a major impact on the lives of people living across Manchester and will transform the cultural scene in the UK.

“The Factory will provide space on an epic scale for artists to make extraordinary work and be a global meeting place, where everyone is invited to take part. It will play a key role in the life of the city’s residents, through the jobs it creates and its pioneering programme of skills, training and engagement, benefiting local people and the next generation of creative talent. It will also strengthen Manchester’s global reputation as a world-class centre for culture, creativity and digital innovation and as a major destination for national and international visitors.”


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