Plans to build a new social centre in Richmond have gone up by another £1.1 million after the project saw predicted costs increase by £1 million in 2021.

Richmond Council’s finance committee heard on Monday that Brexit, the Ukraine war and Covid had allegedly pushed costs up.

Elleray Hall is set to be relocated to the North Lane car park site in Teddington, while 16 affordable homes will be built on the site of the old centre after the plans were approved in March this year.

Updated plans for the project in February 2021 estimated its cost would be £3.04 million, compared to £2.2 million the previous February.

The finance committee has now approved another £1.1 million needed for the scheme to continue. 

Jon Evans, assistant chief executive for the council, said at Monday’s meeting: “Back in 2021 this committee agreed the budget, a capital budget, to deliver on this programme and at this stage the cost and the budget was an estimate pending the testing of the market more formally at this stage.” 

He said there had been “a degree of cost inflation widely attributed in the industry to both Brexit and of course the more serious recent situation in Ukraine”. 

He added that officers had considered all available options and the extra budget was needed to allow the council to enter into a contract to build the new centre and “safeguard the price we’ve now obtained”. 

He said the “brand-new, modern, flexible and energy-efficient” centre would replace the “old and not fit-for-purpose” Elleray Hall. 

All of the contractor bids received by the council for the project were above estimates, meaning they exceeded the approved budget, according to a report shared with the committee.

The report says: “The February 2021 committee paper outlined the projected costs which made provision for construction inflation however market conditions have since experienced significant increases in excess of industry predictions.

"Manufacturing output remains impacted by Covid and transitioning import arrangements following Brexit whilst the war in Ukraine has further compounded cost escalation with material price increases typically circa 20% with certain materials increasing between 35-50 per cent.”

It adds: “The opportunity for further reductions without a significant change is not feasible and any major changes to reduce the building size would require resubmitting the application to planning, incurring further design costs resulting from a prolonged project delivery programme and would not necessarily achieve any savings as material costs continue to rise.”

Councillor Robin Brown said the authority was “very keen” to see the project get delivered but added that “it’s always a little bit disappointing if the costs increase”.

David Sharp, assistant director of property services, added that “hyper-inflation in the construction industry” is an issue “across all our construction and development programmes at the moment”.

The committee approved the extra capital funding for the project. Construction of the new centre is set to begin later this year, while the old centre is expected to be demolished at the end of 2023.