Council racks up £900k overspend on IKEA project and records Guildhall loss

[dutchman]

It was part of a £14 million overspend on services



Coventry council overspent on its IKEA project by £900,000 last year, a new report shows. It also made a loss against St Mary's Guildhall of £400,000 despite huge investment in the building.

The council blamed inflation for rising costs and said work on the scheme to turn the IKEA building into a cultural hub is set to finish next year. The authority also said it is working to boost visitor numbers to the guildhall.

Coventry councillors agreed cuts to services of £8.5 million in February, including switching off streetlights overnight, reducing the maximum council tax discount, and raising car parking fees. The scheme to turn the old IKEA building into a collections centre has been in the works for several years.

Councillors agreed to borrow more money for the project in March due to rising costs. The authority's opposition called for it to put essential services first and not agree more spending on the building's lower floors, but a senior councillor said the scheme aims to pay for itself and there must be a "robust" business case for the floors.

Details of council spending for 2023-24 are revealed in papers for a cabinet meeting on 9 July. It reveals that overall the council overspent on services by £14.2 million with almost half going on adult social care and housing alone.

This was mostly offset by a £12.4 million underspend in other budgets, including a boost of £5 million in dividends from a council-run waste disposal company. The council's final budget has a gap of £1.8 million which councillors will be asked to balance with reserves at meetings next week.

Of the council's overspends last year, business, investment and culture accounted for £1.4 million. The Local Democracy Reporting Service (LDRS) asked the council why it had incurred the extra costs around IKEA and St Mary's Guildhall.

On St Mary's Guildhall, a council spokesperson said: "Following a massive refurbishment and restoration programme, including work to uncover and restore the Medieval Kitchen, the stunning St Mary’s Guildhall reopened in July 2022.

"New interpretation programmes, including a digital tour and interactive activities have been developed to explain the story of the tapestry and enable visitors to clearly see and understand more about the beautiful artwork.

"The transformation was made possible by a £1.4m grant from The National Lottery Heritage Fund, thanks to National Lottery players. and through the Cultural Capital Investment Fund resourced by Coventry City Council, Arts Council England, and the Government’s Getting Building Fund through Coventry and Warwickshire Local Enterprise Partnership - amounting to a further £4.9m.

"No Ordinary Hospitality Management is managing the venue using their specialist expertise to help visitors to enjoy the heritage attraction, and also grow the business including Tales of Tea which provides quality dining.

"But like all new businesses, and against the backdrop of high inflation and the cost-of-living crisis, this will take time.

"However, we are working closely with the team to boost the level of visitor numbers in all aspects of the business and we are confident that this is achievable."

On IKEA, the spokesperson said: "In February 2021 Coventry City Council took the decision to acquire the former IKEA building to enable an exciting and ambitious refurbishment project. This will include the creation of a Collections Centre for nationally significant cultural, arts and historical artefacts, in collaboration with national partners Arts Council England and British Council as well as Culture Coventry Trust and Coventry University.

" Covid slowed the original timescales down and inflation pressures has seen costs rise. And although we have found some interim uses for the building, including a number of film and production company uses, we also took on some additional operating costs last financial year including business rates.

"The building has now been handed over to our contractor who will undertake all of the construction work with completion expected at the end of next year."

[dutchman]

The same clowns are now in charge of the nation's finances!

[dutchman]

Work on huge Coventry IKEA project stops after construction firm collapse



Work to turn Coventry's old IKEA into a cultural venue has stalled after the scheme's main contractor collapsed. It comes months after councillors signed off on extra money to cover the scheme's soaring costs.

Coventry Council, which is leading the project, said it was "considering its options". The news was the latest problem to hit ambitions to turn the seven-storey building into a national collections centre and arts space.

Less than three months ago, ISG was announced as the firm that would repurpose the former furniture store. Its bid for the project was reportedly worth £44 million.

But the company's UK operations went into administration on Friday, September 20. Work at the IKEA site stopped due to the "sudden and unexpected news", the council said today, September 24.

"We are in contact with our partners on the project and the council is currently considering its options and next steps," it said in response to questions from the Local Democracy Reporting Service (LDRS). The council confirmed ISG had been paid for the value of works to date which represented less than four per cent of the total contract due to work being at an early stage.

"The extent of any recoverability of additional costs incurred by the city council will be determined by the administration process," it added. News of the company's collapse has cast uncertainty over the fate of the Croft Road building which bought by the city council in 2021.

Leader of the opposition Conservative group Cllr Gary Ridley told the LDRS: "Given the council's decision to borrow additional funds for this project just six months ago, the public, will want reassurances the IKEA project is on course for a smooth delivery.

"I’ve asked for an update to ensure this is the case. I’m also seeking guarantees that taxpayers won’t be required to fund yet another bailout." In a statement, administrators from EY, formerly Ernst & Young, said ISG's UK operations had ceased to trade with immediate effect.

It added: "ISG’s UK business has experienced liquidity constraints in recent months. The Directors explored a number of options to secure the future of the business, including a sale of all or part of the Group and refinancing options.

"Despite significant efforts to secure a sale of the group over many months, a deal could not be completed."

[rebbonk]

Why had our excremental councillors not carried out the most basic of due diligence checks? - These incompetent muppets need holding to account.

If it was their own money would they be offering it up so readily?

[dutchman]

Coventry Ikea project labelled ‘flatpack fantasy’



Plans to transform the landmark former Ikea building in Coventry into a cultural venue have been labelled a “flatpack fantasy”.

Conservative opposition councillors have called for no more public money to be spent on the scheme to transform the site after council-appointed contractors ISG entered administration.

But the Labour leadership insisted it was committed to the Cultural Gateway plan to convert the building into storage for nationally important artworks.

They said the project would eventually pay for itself.

The cost has not been publicly disclosed, but the BBC has seen private reports that predicted capital expenditure for the project would reach £60.1m.

That figure is now expected to rise after ISG collapsed just two months after being appointed by the council.

Councillor Gary Ridley [pictured], leader of the Conservative opposition in Coventry, said ISG’s failure “raises huge questions over due diligence at the council” and it was “looking more and more like a financial black hole each day”.

He added: “It raises huge questions over whether further taxpayers’ funding is needed to salvage this flatpack fantasy.”

The transformation of the former furniture shop into a cultural venue is supposed to be a concrete legacy of the city’s year as 2021 UK City of Culture.

But it has now become the latest in a series of setbacks after the year of celebrations was disrupted by the Covid pandemic and the charity tasked with overseeing the celebrations and legacy projects went bust in 2023.

[rebbonk]

They said the project would eventually pay for itself.

Yeah, of course it will. CCC hasn't exactly got the best of records with business ventures.

[dutchman]

Delays to huge Coventry projects as IKEA building work still "on hold"



Delays are hitting Coventry council projects that are set to bring major changes to the city. These include huge city centre development, a recycling change and its road safety programme.

New council papers reveal the setbacks - as councillors are set to rubber-stamp rescheduling £35 million of funding. The money had been forecast to go on the schemes this year but is being delayed.

Almost half the amount, some £15 million, had been earmarked for City Centre South. "Spend has been pushed back because of delays with the project due to ongoing legal agreements with the developer," officers writing the report say.

The council's bid to turn the old IKEA building into a cultural hub is also affected. The project involving repurposing the seven-storey structure has not made progress since September, when the contractor doing the building work went into administration.

Just over £6 million of council funding is now set to be held back due to the contractor's collapse, officers say. The delay is also because of "the construction project being on hold till a new contractor can be procured," they add.

The council is also not due to bring in a food waste recycling service until August this year, delaying £300k of forecast spending. And local road safety schemes are taking more time than expected.

Officers say this programme, costing £600k, has taken longer to develop due to prioritising School Streets and delays to getting outside support for average speed enforcement programmes. They say works are planned but admit these usually take over a year to complete.

Delays have hit building of a cycleway in Coundon and this is now due to start in early 2025, resulting in £1.9 million being rescheduled. A huge chunk of funding for the council's Woodlands School scheme will also not be spent this year after a delay related to the contract.

All the delays are to council spending on its so-called "capital programme" meaning one-off schemes paid for by grants, borrowing and other funding rather than council tax. The amount of cash being rescheduled this year is three times as much as it was last year.

Officials also warn future projects may need to be reconsidered due to the impact of historic inflation and high borrowing rates. Councillors are expected to sign off the report at a Cabinet meeting next Tuesday, 11 February.

[dutchman]

Deputy Prime Minister Angela Rayner reveals £5m boost for Coventry IKEA building



Troubled plans to transform Coventry's old IKEA into a cultural hub have been given a £5m boost. The project is one of several across the country to receive a slice of over £47 million, the government confirmed today (February 17).

The plans to transform the old IKEA building into a new 'new cultural and visitor' attraction in the city have been given a £5m boost. The project has suffered a number of stumbling blocks including the collapse of the original contractor in September last year.

It meant that the city council was forced to take back control of the building and, in doing so, pick up the costs. Only last week, the council revealed a new firm has been found to take on the job after a "thorough" review of bids.

Now the project has been given the investment boost as part of the government’s Plan for Change – which it says focuses on creating jobs and in some cases building new homes.

In a statement, Deputy Prime Minister Angela Rayner said: "Every corner of the UK has something unique to offer, and our rich creative capital must not be underestimated. Our Plan for Change promises growth for every region and I’ve seen first-hand how these projects are igniting growth in their communities.

"Through investing in these critical cultural projects we can empower both local leaders and people to really tap into their potential and celebrate everything their home town has to offer. This means more tourism, more growth and more money in people’s pockets."

Since 2020, the council has been working with partners including the Arts Council to transform part of the building into a national collections centre.

There are also aims for Coventry University to rent some floorspace and open a public cafe and gallery and for the building's lower floors to be rented out. A new public entrance will be created to the South East corner of the building, which will act as the building’s public reception and foyer.

[dutchman]

New contractors appointed to start work on old Ikea building



Plans for the new City Centre Cultural Gateway at the old Ikea building are back on track with the announcement new contactors have been appointed. The scheme was paused after previous contractors went into administration.

But today (13 March) Coventry City Council has revealed GRAHAM Group will pick up the work, meaning the project is back underway. It is hoped the scheme will see the building become a landmark destination in Coventry, bringing together multiple local, regional and national partners across the creative and cultural sectors.

Arts Council England, the British Council, CV Life and Coventry University, which will occupy two floors of the building, are all said to welcome the news, which will see work starting on the site from Spring 2025 with construction expected to be completed by Summer 2026.

Cllr Naeem Akhtar, Cabinet Member for Housing and Communities at Coventry City Council, said: “We’re delighted that GRAHAM is on board to complete the construction of this significant project.

“Despite unforeseen and challenging circumstances, Coventry City Council has moved swiftly to secure a new contractor to get the project back on track and within the approved budget, meaning no additional money is needed for the construction.

“Not only are we bringing high-profile national partners to the city, there’s also the potential to bring so much more to Coventry. We’ll have the ability to create opportunities for people in this sector and for residents here in our city with what will be an impressive cultural destination.”

Ronan Hughes, GRAHAM Regional Director, said: “We are proud to be appointed as the contractor to deliver this landmark cultural project for Coventry.

“The City Centre Cultural Gateway is an exciting scheme that will transform a former retail space into a world-class hub for arts and culture while providing long-term benefits for the local community, economy, and creative industries.

“We understand the importance of getting this project back on track and our priority is to deliver a new cultural destination that meets the needs of all partners and stakeholders.”

[rebbonk]

I hope the council have carried out proper due diligence! - I won't hold my breath!