Greenwich Council admits it could have been more frank about £45m Woolwich Works costs

Greenwich Council has conceded it could have been clearer about the possible cost of its Woolwich creative district, two months after it was revealed that the project had gone £14 million over its publicised budget.

The project, which includes the flagship Woolwich Works venue and a home for the immersive theatre company Punchdrunk, was approved in 2017 with a budget of £31.6 million, with a contingency of £11.1 million. In publicity, the council sold the project to residents as costing £31 million.

But the final bill for the project came in at £45.6 million after construction and power supply issues, which required new substations to be built. While the project was delayed due to the pandemic, government grants covered this cost.

Greenwich Council leader Danny Thorpe had previously branded questions about an overspend as “fake news”, then refused to answer questions on why his council had promoted the scheme to residents as costing £31 million.

While both Labour and Conservative councillors had been nervous about the cost of the project, many in the town hall have been understanding of the overrun.

But there remains bad feeling about how the costs were sold to councillors and residents as well as Thorpe’s hostile attitude to scrutiny of the project – which has included implying that opposition leader Nigel Fletcher was opposed to the scheme, when he has been largely been supportive.

A report into the project going to the regeneration, transport and culture scrutiny committee on Thursday said that “with hindsight the contingency was low given a project of this nature, which involves refurbishment of historic and listed buildings”.

On early reports which went to councillors, council officers implied that the risk of a cost overrun was downplayed. “Any early estimate of programme cost, and schedule should be seen as provisional, should clearly recognise limitations and uncertainties, and be used only in an indicative fashion to guide long-term planning until a detailed design supported by tendered pricing is available,” it added. “Future reports should clearly reflect these risks within the body of the document.”

For future projects, the officers recommend “setting out possible ranges of both cost and timeline in reports that are presented in the inceptions stage of a project. This practice is beginning to become more widespread in government and should be considered at the council for future major projects like Woolwich Works.”

The report seeks to answer councillors’ questions about the project, but some data is still being held back.

While the trust that runs the creative district is being assessed against key performance indicators, residents are unable to see the KPIs for themselves as that document is being kept to councillors alone.

And while councillors also raised queries about the council’s leases on the five buildings that form the creative district, the report does not say how much was paid to Berkeley Homes, which owns the Royal Arsenal.

There are no Land Registry records on how much was paid to Berkeley for four of the buildings in 2014 – long before the project was commissioned – although research by in 2018 the Bureau for Investigative Journalism revealed that £9 million was paid for Building 19, which will be taken over by Punchdrunk next year.

The report also does not address why council social media posts and press releases referred to the project as costing £31 million.

Woolwich Works has been well received since it opened in September, and is on track to beat its target of hosting 60 performances before the end of March. It has created 17 full and part-time jobs for borough residents. This weekend it hosts the family dance performance The Little Prince on Saturday as well as a festive opera show on Sunday afternoon.

Punchdrunk will open in Woolwich in March with its Trojan war-themed show The Burnt City, with early performances already sold out.

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