Extra £3.3m needed for new Leighton Buzzard care home on former police station site due to rising building costs
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The cost of providing a new care home in Leighton Buzzard has gone up by about a third because of the rising costs of building materials, a meeting heard.
An extra £3.3m is needed by Central Bedfordshire Council to appoint a lead contractor for its 'Care home one Leighton Buzzard' project in Hockliffe Road, taking the budget to £13.8m.
As a customer, the local authority has experienced this through the tender returns for the development, according to a report to its July 7 corporate resources overview and scrutiny committee.
Pressures on the construction industry have led to inflationary costs of supplies being passed on to customers, said the report.
The council has a programme to replace the capacity in the seven older persons care homes it inherited from Bedfordshire County Council.
As part of this, the executive agreed the closure of Westlands older persons home in the town and to provide replacement capacity on the former police station site, added the report.
This would be operated by the council’s new care company, Care is Central, and funded by CBC.
Conservative Ampthill councillor Paul Duckett, who chairs the committee, explained: "We're looking at a 30 per cent increase on what the original cost was."
The budget was set at £10.5m, but more finance is needed before the work can go ahead.
Conservative Dunstable Watling councillor Eugene Ghent said: "We've got a buoyant housing market and, since March, the British construction industry has accelerated at its fastest speed for seven years.
"There are issues being reported around timber, mortar, cement, bricks and concrete. The cost of the steel mesh, which is essential for the sinking of concrete, went up by 35 per cent last week.
"Current projects won't be affected because we're sealed in with prices. This Leighton Buzzard one is probably the first to be impacted. We've really no other option than to build it.
"We could stop or pause the scheme, but that could lead to further costs down the line if we started it again."
Liberal Democrat Linslade councillor Peter Snelling said: "I was quite surprised by the extent of the difference between our original estimate and where we are now.
"Even with the explanation around the price increases, I wonder whether we were a little unrealistic in those estimates to be that far of the pace."
Councillor Ghent added: "The original valuation was £9.92m. That was done at the prices when this tender was set out.
"Five returns were received and it was clear from those there had been significant impact on the construction market, as all five were considerably higher than the pre-tender estimate.
"The range of the returns went from £13.3m to £14.7m so they were all in that ballpark.
"The process is a competitive one, reflective of that market, and represents a genuine post-tender cost of building our design now."
Director of resources Charles Warboys said: "A lot of the costs are fixed. It's schemes going out to tender we're seeing that big difference. Time moves on and circumstances change.
"I don't think the original estimates were wildly wrong with the information that was available at the time."
The committee agreed to ask the executive to recommend to full council for £3.3m to be added to the capital programme in the years 2021 to 2023 for the development.