Questions raised over rising costs of key city centre redevelopment

Richard Youle, local democracy reporter

Swansea Council has refused to comment on claims that the cost of a key city centre project has soared by around £10 million.

The Local Democracy Reporting Service has been told that it could cost just over £25 million to convert the former BHS and Miss Selfridge stores on Oxford Street, into a new central library, archives store and community hub.

The council’s cabinet recently decided to add the scheme to its suite of regeneration projects but took the decision behind closed doors.

A cross-party scrutiny panel had discussed a lengthy report about the project a couple of days before cabinet, but this report and discussion were also in private.

Public bodies can and do prevent public discussion of topics on commercial and other grounds, one of the arguments being that contractors which bid for a project would be in an advantageous position if a figure was already out there.

But opposition leader, Cllr Chris Holley, said he felt council-led regeneration projects in Swansea shouldn’t go ahead from now on without the public being made aware of their cost beforehand.

“I find it difficult to understand – can’t we say here’s the sum of money it’s going to cost to do this or that project?” said Cllr Holley. “The public have a right to know.”

Inflationary pressures

Inflationary pressures have weighed down on the economy, including construction, and this is affecting the central library and community hub scheme.

Last August a group of councillors were told by a senior council officer that the project cost had risen to just over £15 million. This was partly explained by the fact that the council had acquired the Miss Selfridge unit as well as the BHS building. The officer also said the units weren’t watertight. “It will be a fantastic scheme but it won’t be a flamboyant, expensive scheme,” he said.

Asked to comment on the claim that the project cost was now exceeding £25 million, a council spokesman said: “We cannot comment on confidential information that has been leaked contrary to the council constitution.”

The council said the new library, archives and hub would be open in the next 18 months and that progress behind the scenes has included improved interior design with more natural light, a proposal for the building to be open seven days a week, and advanced talks with three potential tenants. Charging points for e-bikes and rooftop solar panels are also being explored.

Council leader Rob Stewart said: “We want people to enjoy their city centre – and this will help in a significant way. Being close to bus stops, car parks and cycle facilities, it’ll make a whole range of crucial services increasingly accessible.”

Business, he said, would benefit from increased city centre footfall.

The Swansea Labour leader added: “Costs have risen since the project was conceived a few years ago, reflecting both inflation and the fact that we want the building to be as welcoming and secure for all those using it.

“We’ve been able to carefully use other council funds – mostly related to estates – to largely offset the rise in costs. The project still represents excellent value for money, the site bringing back to use a large building at the heart of our resurgent city centre.”

Liberal Democrat leader, Cllr Holley, insisted that people should be given more information, including updates if costs rose considerably. He said that when he was council leader prior to 2012, he had stated publicly that the revamp of the old LC building would cost around £25 million before contractors began work.

Asked if publicising a figure could put the council at a commercial disadvantage, he said: “There should be a method by which we do it, full stop.”

Indicative costs

In response to his comments, Cllr Stewart said: “Cllr Holley should know full well that you only have indicative costs at the start of a project, and you only know the full costs once you have been through a procurement and have appointed contractors with agreed final costs. This is how public procurement works for all major scheme including new schools.

“If you were to adopt the approach that you only started a project if you absolutely knew the final cost, you would never start a project.”

Council-led projects under way or planned in Swansea include the refurbishment of the Palace Theatre, an overhaul of Castle Square, the construction of a high-tech office building on The Kingsway, and the restoration of buildings at the former Hafod-Morfa Copperworks.

The authority has borrowed a lot of money, though at low rates, to fund the schemes and has also received some grant funding.

A development company, Llanelli-based Kartay Holdings, which has made many investments in Swansea, said this week that it had been “hugely impressed” by the council’s commitment to the regeneration of the city.