Council reveals £900k overspend on Ikea project

An artist's impression was released of how the planned Coventry City Centre Cultural Gateway could look on the site

A council has revealed a £900,000 overspend on a project to convert an old Ikea store.

Coventry City Council confirmed the transformation of the site on Croft Road into a cultural hub was hit by rising costs last year.

The report, due to go before the authority’s cabinet on Tuesday, also revealed the council made a £400,000 loss on a renovation of St Mary’s Guildhall.

The authority said the projects were affected by rising costs and the impact of the Covid pandemic.

A council spokesperson said the Ikea building was taken on to “enable an exciting and ambitious refurbishment project” called The City Centre Cultural Gateway.

The site, which has been vacant since the store closed in 2020, will host a collections centre once work is finished.

Construction is due to begin in August and is estimated to be finished by the end of 2025.

“Covid slowed the original timescales down and inflation pressures have seen costs rise,” the council spokesperson said.

“Although we have found some interim uses for the building including a number of film and production company uses, we also took on some additional operating costs last financial year including business rates.”

'This will take time'

Of the St Mary’s Guildhall costs, the spokesperson said the site reopened in July 2022 following the refurbishment.

“Like all new businesses and against the backdrop of high inflation and the cost-of-living crisis, this will take time,” they added.

“However, we are working closely with the team to boost the level of visitor numbers in all aspects of the business and we are confident that this is achievable.”

According to the council report, overall the authority overspent on services by £14.2m with social care and housing accounting for almost half of the figure.

This was mostly offset by £12.4m savings made across other budgets and a £5m dividend from a council-run waste disposal company.

Councillors will be asked to plug the remaining £1.8m hole with reserves during meetings in the next few days.

The publication of the report came after the authority agreed to £8.5m worth of cuts to services including switching off street lights overnight, reducing council tax discount and increasing car parking fees.

The council was recently criticised over the Ikea project by charity Coventry Rape and Sexual Abuse Centre after its £200,000 contract was not renewed by the authority.

This news was gathered by the Local Democracy Reporting Service which covers councils and other public service organisations.