City drops Guildhall overhaul contract

POLITICS: The leader of a Yorkshire council has claimed the authority has been a “victim of circumstance” after it pulled out of a multi-million pound contract to renovate its former headquarters.

The major overhaul planned for the Guildhall in the centre of York has ground to a halt due to rising costs.

THE LEADER of a Yorkshire council has claimed the authority has been a “victim of circumstance” after it pulled out of a multi-million pound contract to renovate its former headquarters.

The major overhaul planned for the Guildhall in the centre of York – which includes serviced offices, riverside access, a cafe and restaurant – has ground to a halt due to rising costs.

York Council gave the £9m deal to Interserve in August, but has ended the contract because detailed costs turned out to be “significantly” higher than planned.

In a statement, council director Neil Ferris confirmed the Interserve deal had been terminated.

He said that under the Government’s procurement rules, the contract had to have a “break point” after its first stage – when Interserve would give a detailed build specification and target cost.

“We recognised from the start that given the site complexity and risks around the foundation structure, there was always the chance that estimate would be higher than anticipated,” Mr Ferris said. “We structured the procurement in this way to protect York residents from potentially spiralling costs.”

He added: “We remain committed to the Guildhall development and are excited about the potential it offers local businesses, communities and visitors.

“Our next steps are to review options to reduce costs, such as revising the scale, scope or access arrangements to the site and we will invite members to confirm their preferred option in May.

“In the meantime, to reduce delays, we will progress less disruptive works, such as fitting new utilities.”

Council leader Ian Gillies said the council had been a “victim of circumstance” as costs had grown. He said the ambition for the project remained, but the council would be looking carefully at plans before making another construction deal.

“We will go back to the market, but we will be looking at what we want and what is achievable,” Coun Gillies said.

However, he said that the project was not quite “back to square one” as a significant amount of work has already been done in the first stage of the contract, and that would not be wasted.

Coun Gillies added: “I can’t say there will be no abortive costs, but they will not be significant.”

The Guildhall was vacated by York Council when it moved to its new headquarters situated at West Offices, which were the city’s original railway station and station hotel.

While council meetings have still been held in the Guildhall, the £44m relocation was completed in March 2013 - nearly five years after original plans for the relocation were aborted.

A vision to centralise the council’s operations was unveiled in 2008, but the initial plans to build a base on the Hungate development in the city centre had to be abandoned.

English Heritage raised concerns over the original plans due to the impact the development would have had on the surrounding area.

The decision to centralise the council’s operations was taken in the hope of saving millions of pounds in rents which the authority had been paying with civic services spread across 17 premises in the city.

We remain committed to the Guildhall development. Council director Neil Ferris.