{"id":499377,"date":"2024-05-17T11:16:39","date_gmt":"2024-05-17T10:16:39","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=499377"},"modified":"2024-05-17T11:16:39","modified_gmt":"2024-05-17T10:16:39","slug":"market-volatility-and-uncertainty-hikes-scottish-school-cost","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/buildings\/market-volatility-and-uncertainty-hikes-scottish-school-cost-17-05-2024\/","title":{"rendered":"Market ‘volatility and uncertainty’ hikes Scottish school cost"},"content":{"rendered":"

The cost of a Morrison Construction project to build a Passivhaus grammar school in Paisley is set to grow by more than \u00a310m, the local council has said.<\/p>\n

A Renfrewshire Council meeting last week recommended raising the budget for the new Paisley Grammar School and Community Campus (PGSCC)<\/a> from \u00a375.1m to \u00a385.5m<\/p>\n

It heard that the proposed move was down to \u201cvolatility and uncertainty in the construction market\u201d, especially labour costs.<\/p>\n

The final decision rests with the Scottish Government. PGSCC is included in the Learning Estate Investment Programme (LEIP), which is a joint investment programme between the devolved Scottish Government and local authorities to improve the condition of the schools estate in Scotland.<\/p>\n

Galliford Try<\/a> company Morrison Construction is conducting enabling works for PGSCC under a preconstruction contract awarded in 2022.<\/p>\n

Morrison is also due to begin the main construction phase in June, the council said in a revenue and capital budget update.<\/p>\n

The project has been split into 57 subcontract work packages, which were tendered through Morrison Construction\u2019s supply chain, it added.<\/p>\n

This tendering process revealed \u201ca higher level of cost increase than had been anticipated due to a range of issues, including inflationary materials costs, a limited number of suppliers bidding for work, and difficulty securing skilled labour\u201d, the council stated.<\/p>\n

Alastair MacArthur, director of finance and resources at Renfrewshire Council, told the meeting: \u201cCertainly over the past two to three years, there have been significant increases in materials costs which have driven very significant cost pressures across a whole range of capital projects.<\/p>\n

\u201cAnd while those materials costs increases appear to be moderating a bit, it is more on the labour cost side that we are now seeing increased pressure.\u201d<\/p>\n

The council said it can afford to borrow more to complete the new school alongside funding from LEIP.<\/p>\n

However, it noted a risk that its spending needs \u201care not financially sustainable if the use of one-off reserves to balance the budget is a recurring feature over the longer term\u201d.<\/p>\n

A report to the council last November stated that the new grammar school should be completed by summer 2026.<\/p>\n

It will feature sports pitches, outdoor learning facilities and a 300-seat theatre.<\/p>\n

Earlier this year, the Scottish Futures Trust (SFT) published a cost review briefing in which it described a preference for Passivhaus accreditation in LEIP projects.<\/p>\n

This delivers a premium of 5-25 per cent for main contractors, the SFT said, although some large subcontractors told it they were losing money on projects.<\/p>\n","protected":false},"excerpt":{"rendered":"

The cost of a Morrison Construction project to build a Passivhaus grammar school in Paisley is set to grow by more than \u00a310m, the local council has said. A Renfrewshire Council meeting last week recommended raising the budget for the new Paisley Grammar School and Community Campus (PGSCC) from \u00a375.1m to \u00a385.5m It heard that …<\/p>\n","protected":false},"author":135716,"featured_media":499392,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false},"categories":[547,533],"tags":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n