With all the building work now complete at the Festival Hall, the Parish Council have confirmed that the total costs of the project exceeded the budget by hundreds of thousands of pounds.
At the Parish Council meeting on Monday, 13th November, Councillor Geoff Hall provided a summary of the Medical Centre project, which exceeded the budget by £370,000.
Speaking about the scale of the project, Cllr Hall said "I believe that most Parish Councils of the size and resources of Alderley Edge's would take the view that a project of this size and complexity would be beyond their scope. Nine volunteer, part time Councillors, together with a part time Clerk, is a very small group to draw on for what has been (and continues to be) a very costly and complex project.
"Let me put this in context: Prior to embarking on this project the largest single expenditure made by the PC was £30,000 for Christmas Lights. This project was 100 times larger, requiring expenditure of £3 million."
He also stressed that when the AlderleyEdgeFIRST group was elected in May 2015 they were given very little information about the Medical Centre and Festival Hall project and the only document they had was the Conservative Party leaflet issued just before the May election.
Cllr Hall said "We did not inherit a single document from our predecessors showing how they planned to complete this project, no detailed costings, no assessment of the risks, no analysis of how they would resource what was a major project. I have been involved in many projects during my career, from petrochemical plants to IT implementations and software development. I have never witnessed a project so poorly documented and planned."
The final cost of the Medical Centre over the period May 2015 to October 2017 was£2,369,243, compared with a figure of £2,000,000, which was promised by the outgoing Conservative Parish Council to be the maximum cost in their election leaflet above. This is a difference of £369,243 or 18.5%.
Cllr Hall said "Whilst cost overruns on such projects are not uncommon, what is unusual about this scheme is that the additional costs could have been predicted by the previous Conservative Parish Council.
"The extra costs did not arise because of any unexpected problems, nor because we changed the specification. Nor did we make any changes to the agreements already on the table in May 2015.
"The differences arose because key costs on the Medical Centre had been overlooked by the previous Parish Council and because of a failure to plan the Medical Centre Second Floor. In addition, the implications of the costs on the Council's cash flow were not properly understood and addressed by those responsible."
He added "I would not wish to proceed without giving our predecessors credit for their original initiative. Without that we would not now have a state of the art Medical Centre in our village. The previous Parish Council deserve credit for this, but not – as the report clearly demonstrates - for the way in which they executed the project."
Referring to Conservative party election leaflet from early May 2015, which states that the Medical Centre was guaranteed to cost no more than £2,000,000, and the Building Contract, which states that the agreed cost is £2,162,165, he commented "Those responsible on the previous Parish Council did not plan, document nor understand the practical and financial implications of the project they started."
Councillor Hall also highlighted other costs that he said had not been budgeted for, including professional fees to cover leases for the pharmacy and second floor tenants, project management fees payable to Arcus - who they had appointed to manage the build on behalf of the Parish Council - along with letting agent and management services fees for the pharmacy and second floor tenants.
He then explained that security costs had been missed, saying "The NHS required that the new Medical Centre should meet national building security standards. These are laid down in a process called Secured by Design, which is administered by the Police. This called for a 2.1m (7ft) wire mesh fence around three sides of the site, with security gates. The previous Parish Council did not accept this, but rather than renegotiate it, they simply removed all provision for it from the budget – exposing the PC to non-compliance with its Lease agreement with the NHS.
"We dealt with this issue by renegotiating with the NHS and the Police to remove the 7ft fence completely from 2 sides of the site and to reduce the height on the third side to 1.8m (6ft). This significantly reduced the costs."
The new Parish Council also had to add funding for lighting, ceilings, toilets and washrooms to bring the second floor of the Medical Centre into a lettable condition as the contract only provided for the second floor to be left as an unfinished shell.
In total these extra costs added a further £207,078 to the £162,165 missed from the original build contract, making a total project cost of £2,369,243, compared with a promised cost of £2,000,000.
A breakdown of the costs is shown in the attachment report.
Cllr Hall concluded by saying "The content of this report is consistent with what we reported in June 2015, shortly after we took office. However, the key question in all of this still remains unanswered: how could it be that we were told by the former Conservative Parish Council in May 2015 that the Medical Centre would cost no more than £2m, when the building contract, which they had already seen and approved, shows a figure almost £200,000 higher?"
In December Councillor Geoff Hall will report on the Festival Hall and in January 2018 he will draw conclusions relating to the whole project and its impact on the Parish Council's finances.