Costs of new high school tipped to rise by millions
COSTS linked to the construction of a new Paisley Grammar School are already threatening to spiral by millions of pounds, it can be revealed.
The state- of- the- art development, which will be built on land next to the former Chivas administration building on Renfrew Road, will replace the ageing secondary school on Glasgow Road.
Renfrewshire Council hopes the modern facility which will have sports pitches, outdoor learning and social spaces and a 300- seat theatre will be ready to open in the summer of 2026.
But, against a challenging financial backdrop for the local authority, the budget for the major project will now rise from £ 75.1 million to £ 85.5m amid “growing inflationary pressures” in the school construction market.
A report to full council explained this will result in increased borrowing costs of
£ 500,000 per annum £ 300,000 of which is expected to be funded through Scottish Government learning estate investment programme allocation.
Speaking at Thursday’s meeting, Councillor Gillian Graham, Labour group education spokesperson, asked if the market conditions could also impact a newbuild Dargavel Primary School and extension at Park Mains High School.
She said: “I understand that the costs are influenced by inflation, particularly around material and energy costs, and a contingency of 7.5 per cent has been included, but I think that was included in the first budget, so I just want reassurance that the current contingencies are going to be sufficient.
“This also raises concerns around the budget for the new Dargavel Primary and extension to Park Mains. Is the allocated budget of £ 60m going to be enough?
“Have the increased material and energy costs been factored in or are we going to see costs rise there as we have done with Paisley Grammar? It’s a serious concern for us.”
Results of a tender exercise have shown a higher level of cost increase than initially anticipated because of inflationary materials costs, a limited number of suppliers bidding for work and difficulty securing skilled labour.
Alastair MacArthur, the council’s director of finance and resources, said: “As I’ve tried to outline in the report, probably the majority of those costs are coming from increased labour costs.
“Certainly over the past two to three years, there have been significant increases in materials costs which have driven very significant cost pressures across a whole range of capital projects.
“And while those materials costs increases appear to be moderating a bit, it is more on the labour cost side that we are now seeing increased pressure.
“Within the revised budget that we are recommending within this report, there is still an element of contingency within that we would consider to be appropriate given the stage that the Paisley Grammar project is at and our understanding of the current labour market and materials costs that we can anticipate.”
Mr MacArthur also confirmed indicative costs and budgets for the newbuild Dargavel Primary and extended Park Mains High School should be sufficient at this point in time.