Arun District Council’s planning committee recently gave the green light for an additional £3 million to be allocated to the Alexandra Theatre regeneration project. This funding will see the council borrowing extra money to manage the rising costs associated with the initiative.
Originally, the project was set with a budget of £15.78 million, which was primarily financed by a £12.1 million grant from the central government’s levelling up fund and a £3 million contribution from the council itself. However, the planning committee’s decision to approve the additional £3 million now means that approximately £1 million of these funds will be designated for extra project costs, while the remaining £2 million will serve as contingency funding in response to the current instability in the construction sector.
Interestingly, the £2 million contingency will be kept under the direct control of the council instead of being incorporated into the construction contract. This move is intended to provide what council officials describe as “an added layer of budgetary control.”
The money for this additional funding is expected to come from borrowing, which could result in the council facing annual financing costs of around £175,000 on top of the £3 million borrowed. A report highlighted that failing to approve this funding would jeopardize the entire project, potentially leaving the council with the burden of repaying the levelling up fund grant and any related fees.
Council Leader Martin Lury expressed his concerns to the Local Democracy Reporting Service, stating that being in this position is “not an ideal situation” and that he feels “frustrated” by the unforeseen increase in costs.
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