Final costings for the Woolwich Works show the project ran £14 million overbudget rising from £31.6 million to £45.6 million excluding covid costs.
Both Labour and Conservative councillors had attempted to gain insight into increasing costs during construction but were stonewalled. Greenwich Council’s leader Danny Thorpe even stated it was “fake news” in recent months.
The project was entirely funded by Greenwich Council.
At a scrutiny panel meeting in July this year, the council refused to even give a latest estimate to two Labour councillors, and Conservative councillors asking in a council meeting were rebuffed.
The council’s report tries to gloss over the cost increase by including a large contingency buffer above original projections for the £31 million project, though looking at Greenwich Council’s news stories highlights that the cost was highlighted publicly at £31 million.
Even accounting for a substantial contingency of £11m, the project overspent.
The report also attempts to justify cost increases by cherry picking five projects across the country that cost more.
The report highlights that covid increases are apparently not part of the £14 million overrun:
“When the pandemic hit, the Council implemented a change to the construction contract in line with central government guidance.
This enabled the contractor to claim for costs associated with disruption caused by COVID-19, but only on the basis that they were demonstrable, and no profit attached.
These costs are attributable to COVID-19 government funding and therefore do not create an additional financial pressure on the Capital Programme.”
It also states: “The costs associated with COVID have been funded by government grant therefore do not create a pressure on the capital programme.”
Inflation has added to pressures though accounts for only £3.5 million of the £14 million total increase.
While the centre offers a great deal to the area and is a welcome addition, secrecy during construction follows a concerning pattern as ongoing cost estimates are not released on major capital spending projects.
Openness, democratic scrutiny and accountability are fundamental issues raised by the handling of this project.
In July councillors were not being given even estimates even though the report now states: “completion of the main construction works in B17, 18 & 19 occurring in July 2020 and main works to B40 & 41 completing in late April 2021.”
This isn’t the first time projects have gone over or not fulfilled expectations. The Plumstead Centre’s cost rose by £5 million or 48 per cent.
Work on the Greenwich and Woolwich foot tunnels was never finished as intended, and lifts installed rarely work.
The latest £14 million overrun is a substantial amount for any authority at a time of strained finances.
There’s no doubt the centre has done a fine job of refurbishing buildings and created an excellent centre and new jobs, though questions are raised beyond that.
Why were councillors and the public kept in the dark on costings throughout construction?
Why are Greenwich often unable to keep major projects close to budget even accounting for the pandemic and inflation?
Why did the council leader lash out and state “fake news” to questions of cost increases when the majority of costs were known at the time – though not in public?
Additional costs of the centre include £500,000 to move the Heritage Centre which is now located in an industrial area in Charlton with reduced public access. There is no confirmed future home for the site.