Work on the Woolwich creative district project has gone £14 million over its publicised budget, Greenwich councillors will be told at a meeting next week.
A Labour councillor, David Gardner, told the same scrutiny panel in July that he had heard rumours that the final bill could be between £42 million and £50 million.
However, council leader Danny Thorpe – whose portfolio also includes the council’s communications policy – had previously refused to discuss rumours of an overspend. He branded the issue “fake news” when Conservative councillors raised costs at a council meeting the following week.
The creative district, using historic military buildings inside the former Royal Arsenal that are up to 300 years old, includes both Woolwich Works, which opened last month, and a new home for the immersive theatre company Punchdrunk, which is due to open in March.
Woolwich Works uses the former home of the Greenwich Heritage Centre, which is now based in a warehouse unit in Charlton with no clear plan for its return. Punchdrunk will be based in buildings opposite, which includes the former home of the Firepower museum.
As well as delays caused by the pandemic, “multiple structural issues” with the buildings – some of which had barely been maintained since the Ministry of Defence left in 1994 – were discovered.
An ancient tunnel was found under one of Punchdrunk’s buildings, while cracks were found in all five buildings.
Three new electrical substations had to be built after it was found that the power network in Woolwich would not be able to cope with the new venues.
Late changes to the buildings included a recording studio in Woolwich Works and work “to accommodate Punchdrunk requirements” in its new home.
Despite the wide difference between the original budget and the final bill, council officers are comfortable with the increase – revising its original budget and contingency to £44 million to include inflation, then putting the extra £1.6 million down to “unforeseen costs” which can be met from “corporate contingency” funds.
While some councillors had misgivings about spending such a large sum on the project, Woolwich Works has been well received since it opened to the public on 23 September.
Many will be understanding of the overspend – especially considering the project had a generous contingency to soak up much of it – but Thorpe’s dismissal of questions about the cost as “fake news”, a phrase used by Donald Trump when he disliked being scrutinised, has created bad feeling among both Labour and Conservative councillors.
Nigel Fletcher, the leader of the council’s opposition Conservatives, told 853: “After months of asking, we’ve finally been given the figures we asked for, and I think we can now see why the council was so reluctant to produce them.
“Despite them consistently telling people the budget for this project was £31 million, we’re now told it was £43 million all along, yet has still overspent by nearly £3 million. It seems the council has failed on both transparency and financial management.
“This is an important regeneration project for the borough, and it’s right that these historic buildings have been given a new lease of life, to create jobs and start contributing to the local economy.
“But it’s also right that we keep a close eye on how these huge sums have been spent, and seek answers on how local taxpayers will see a return on this investment.”
Questions are also likely to be asked about why council officers chose to compare the Woolwich creative district – a project to renovate five historic buildings across a large area – with four other arts projects on smaller sites in an attempt to prove value for money by square metre in their report to councillors.
The projects include the 2004 renovation of the Roundhouse in Camden – a high-profile venue on a cramped site – as well as three entirely new buildings: the Rambert dance school on the South Bank, which opened in 2013, the Cast theatre in Doncaster, which opened in the same year, and the rebuilt Everyman Theatre in Liverpool, completed in 2014.
Woolwich Works is now meant to stand on its own two feet with no ongoing funding from the council, while the town hall will claim a portion of Punchdrunk’s turnover as rent.
James Heaton, the chief executive of Woolwich Works, told 853 recently that he wanted to take “a Robin Hood approach” of ploughing money earned from corporate events at the venue back into the community.
Meanwhile, Punchdrunk announced its plans in The Guardian last month. Its Trojan war-themed show, The Burnt City – backed by the car company Porsche – will host 600 theatregoers at a time, who will be given free rein to walk around dystopian sci fi-themed ancient worlds. It opens for previews on March 22, and is already sold out until the following month.
The Woolwich creative district will be discussed at the regeneration scrutiny panel on Wednesday.
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