Greenwich reveal Woolwich Works project ran £14 million over budget
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.
Secrecy
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.
Worth it?
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.
These issues must be picked up on by opposition parties at next local elections. These are weapons in their armoury not to be ignored. Both the lack of openness and clarity on huge cost overruns, deliberate lies akin to Trump (fake news you say Danny Thorpe?, what next, a storming of council buildings should you lose the next election???), and the cost to local taxpayers above budgeted costs. £14M spread across an assumed approx of 250,000 adult residents is £56/person or £112 per couple. Thats purely the overrun! That cannot be washed over, the vast majority of these payers will never cross the doors of the building paid for by them. It’s a scandal but one of many, Labour have to have had their day here, and it will still take a combined attack on their historical majority by Lib Dem and Green in cooperation, otherwise Labour will stay whatever they muck up. If you’re reading this from these 2 parties, start talking to each other. A coalition of parties could work well in Greenwich, it works so well at the national level in Germany.
Wut?
Don’t worry, ‘Scholz will sort it’.
Funds better spent elsewhere, it’s a shame the money wasn’t spent on converting Riverside house to apartments for those on the ever growing housing waiting list.
I think Woolwich works needed to happen or else the units would stay empty until they fall into disrepair. That said the lack of transparency and refusal to disclose the overruns should be investigated by the department of communities and local government. It is shambolic that a publicly funded project is not being scrutinised by the local authority moreover that same authority is hiding the issues. Heads should roll over this.
Perhaps a mention in Parliament might rouse Greenwich council. 🤔