Athletes’ Village to cost £67 million more than expected

Due to be discussed as part of next week’s cabinet meeting, ‘funding pressures’ on the village have seen costs spiral to £91.8 million more than the £496 million originally budgeted.

The ‘overheated local market, construction cost price inflation, the demand for construction workers in Perry Barr and a fixed delivery date’ have all been listed as reasons for the spiralling cost of the village, which will provide 1,400 homes for local people after the Games.

And the capacity of the village for the Games itself has also been downgraded as a result of the cost pressures, with only 97 per cent of the original bed space requirement (6,320 of 6,500) now being met.

The council has announced that it will work to reduce this figure by £25 million, bringing the total to £66.8 million.

They will do this by undertaking legacy retrofit and demolition after the Games, while both plots 2 and 11 of the current project will also be delivered afterwards.

And the cabinet is also proposing to make £46 million worth of savings on the project, including cutting the contingency budget to £15 million, ‘de-scoping’ plot 11 at a saving of £7 million and funding the overspend on the National Express bus depot through the Capital Contingency Fund.

Cabinet papers also recommend that the proposed extra spending cannot be called in for review, citing the pressures of delivering the Games on time.

The news follows months of speculation over the price of the Athletes’ Village, with the council first announcing earlier this year that the project had run over budget.

And Councillor Jon Hunt, leader of the council’s Lib Dem group, says that it is ‘astonishing’ that the proposed £27.1 million demolition of the Perry Barr flyover is still going ahead in such circumstances.

“In the circumstances it is astonishing it is proposed to continue with the costly and disruptive demolition of Perry Barr flyover. It is simply pig-headed and all part and parcel of the growing evidence of mismanagement of this project.

“It is equally astonishing that the papers propose to remove the right of scrutiny call in of these new financial costs.”

Papers from next week’s cabinet also note that over 90 per cent of the land required for the project has now been acquired by the council, while contracts are also in place for 72 per cent of the bed spaces being provided for the Games.

And leader of the council Ian Ward, who helped bring the Games to Birmingham, believes the importance of the Perry Barr scheme "can not be overstated".

“The redevelopment of Perry Barr and the surrounding area is one of the council’s most important projects,” he said.

“It will lead to major benefits for existing and future residents, enabling Perry Barr to become one of the most vibrant, dynamic and well-connected parts of Birmingham.

“The importance of this scheme cannot be underestimated. It is a catalyst for many improvements in Perry Barr, which would have been delivered at a much slower pace or not at all if it were not for the investment the Commonwealth Games is levering into Birmingham.

“As with all major projects, we will continue to robustly monitor progress and work collaboratively with our delivery partners to enable a successful Commonwealth Games and the meaningful legacy these plans and the hundreds of millions of pounds that are being invested into the city will deliver.”