Questions have been raised over whether Huddersfield’s £210 million Cultural Heart project could be scaled back as construction costs spiral, interest rates rise and inflation threatens to hit double figures.
Tory deputy leader John Taylor warned Kirklees Council’s Labour-run Cabinet that their ambitious plans to transform the town centre may no longer be affordable.
Clr Taylor said he had been told that construction firms were now only guaranteeing quotes for three weeks as building costs continued to rise.
He asked whether the council planned to borrow more money or scale back their plans in the face of rising costs.
Clr Taylor said: “My worry is we set a budget and we baked within that budget a contingency that we know already is inadequate.
“You can only do three things with a project. You can either increase the money you spend on it, increase the time it takes to deliver it or change the scope of it.
“I am worried if the answer turns out to be ‘we’ll borrow more money’ we are already talking about borrowing significant sums of money when interest rates are rising.”
He told Cabinet members: “We can’t say: ‘Well we are waiting for the consultants to have a look and come back with some views.’ You, as an administration, need to be making some decisions.
“Either the project will end up being paused a bit like Bradford was – and we had a hole in the middle of Bradford for a number of years – or you end up descoping so much that what is delivered doesn’t match your ambitions, and is a very pale version of it.
“We can’t kick the can down the road. This is urgent and it needs addressing.”
Consultants are currently working up plans to re-develop the Piazza area of the town centre. There will be a new 2,200-capacity music and events venue and multi-storey car park on the site of the demolished Market Hall car park; the current library and art gallery will become the new Huddersfield Museum; and the existing Queensgate Market will house the library and a food court. Much of the Piazza area will become an urban park.
Clr Peter McBride, Cabinet member for regeneration, said the council was sticking with Plan A for the moment and added: “There’s no intention to change the scope of activity.
“One accepts there will have to be adjustments but that’s why we employ experts, both on the technical side and the financial side.
“Although inflation is built into the estimates, one might presume because of this extraordinary increase currently that that might have to be looked at again.
“But we are operating on the basis of what we know. We will be informed adequately at each stage, come what may.
“I cannot give an immediate answer what they (the consultants) might conclude. I think they will be reserving their position for the moment and they will come forward with proposals that might reflect the strange situation, strange in the sense that it’s not been known for 30 years.”
Clr Paul Davies, Cabinet member for corporate, said: “We absolutely are looking at all our budgets and all our programmes and projects. We are not going to be pushed into making quick and rash decisions.
“What you don’t do is rush into big decisions that could backfire. We are not kicking any cans anywhere. There will be the appropriate decisions made.”
Council leader Shabir Pandor said the council had to look at everything and all the services it provided.
He said the situation was “quite unique” having come out of a pandemic into rising inflation – which he said could hit double figures by the end of summer – to the war in Ukraine.
“I am hoping we have reached the peak,” he said. “If something else comes along, God help us.”
Clr Pandor said the council’s borrowing remained quite low compared with other local authorities and if there was an increase in interest rates he would be “quite relaxed.”
He said the situation would be evaluated along the way and decisions would be made at the right time.