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Gloomy financial outlook for ‘jewel in the crown’ council owned crematorium
Escalating costs for a crematorium in the Cambridgeshire countryside on the site of a former outdoor centre may force its backers, East Cambridgeshire District Council, to scale back its ambitious £9m scheme. The alternative may be the need to find millions more to complete it, which the council sees as a jewel in its crown.
The council’s finance and assets committee were offered a gloomy forecast of the rising costs during a debate on Thursday but opposition councillors trying to force the debate to go to full council were thwarted.
Those that spoke during the meeting felt hampered by not being able to discuss some of those rising costs that remained hidden within confidential appendices only available to the 11 committee members.
The plans cover the 32-acre site of the former Mepal Outdoor Centre which was targeted repeatedly by vandals when it closed and finally destroyed in an arson attack four years ago.
The council opted to fund the crematorium with £9.06million of Community Infrastructure Levy (CIL) funding but even that figure looks to be way short of the mark.
Isabel Edgar, director operations, told the assets committee that the internal team overseeing the project were considering a range of options “to either mitigate costs or reduce the overall build cost”.
No decision has yet been taken but she said these options included reducing the scope of the project, phasing building works, finding additional grant funding for green infrastructure elements, value engineering (cost cutting) or “identifying additional council funding sources”.
Lib Dem councillors Lorna Dupre and Alison Whelan fought, unsuccessfully, for all council members to be brought into the loop at this stage. Their motion to get a debate at full council on October 17 was split on party lines, with five votes in favour and six against.
Council leader Anna Bailey felt it was “almost impossible to have a meaningful debate without going into exempt session” but Cllr Dupre insisted and persisted.
Aerial view from 2020 of the fire ravaged Mepal centre
Ms Edgar opened the debate by explaining the “overarching project timeline” in getting the crematorium built.
She said construction must start by late October of 2025 “otherwise our planning permission will expire” and she estimated completion of the crematorium – these days referred by the council as a bereavement centre – by July 2026.
Key to this is finding the company to build it. And tenders have not yet gone out.
“The cost plan is based on the design and technical inputs we have had this July and it’s important to note that this is still only a financial model as the design and build has not yet been opened up to a competitive market,” she said.
“The implication of the draft cost plan is that it has identified a cost pressure above the amount originally approved by council.”
She said these are broadly in the following areas:
1: As expected there’s been an uplift due to inflationary increases
2: There’s been a small increase in build costs following input from the technical design team and reflective of some benchmarking that has been done.
3: Professional fees have been updated to take the project to the final stage
4: And the project team has updated its risk contingency as well
The details, she said, “obviously in exempt papers as they remain commercially sensitive ahead of going out to market for design and build”.
She expected a new cost plan soon “and this will outline in detail where the cost pressures are derived from.
Early visuals of the new crematorium at Mepal that will cost East Cambridgeshire District Council at least £9m
“It will also provide a strategy for where costs could be managed, risks mitigated and options around phasing or changing the scope of the project to bring it back in line with the approved budget.
“And it will also advise on the preferred route to tender to ensure that the work is packaged up in such a way to allow flexibility for the council and ensure we get a competitive cost back from the market”
Ms Edgar said tenders will go live in February 2025 and they will complete in May.
“This is a really important stage of the project and will provide the council with a real cost profile that has been competitively tendered and a plan to deliver the community infrastructure while managing costs and mitigating risks.
“It should be noted that ahead of appointing a preferred contractor if the project scope or costs are different to that agreed by council in February of this year then I will need further approvals to progress the project.”
Cllr Dupre said the committee was being asked to “simply note an update on a project where there are increases in costs which are potentially quite significant.
“And it is my belief that it’s not appropriate simply to sit here and note while further work is being undertaken and presumably further costs being incurred without this coming back to full council for consideration in view of the new information that we now have”.
Design by Benchmarks Architects showing the projected £9m crematorium at Mepal, Cambridgeshire.
She urged the committee to take a report to full council “in view of the size of that gap” which she reminded councillors she was prohibited from revealing but said had “substantial implications” for the overall project.
Council leader Anna Bailey said she recognised infrastructure costs across all areas were increasing.
“Obviously we want to get good value for money that’s what matters here,” she said.
“And we need to make sure that it’s affordable for the council and that it doesn’t wreck what was a very positive revenue model. Those are the important factors, and we can’t make any decisions on any of that until we know what the cost is.
“So, we have to go out to tender to get an understanding of the actual cost of this project so that is what council’s agreed to do; there’s no change to that and that is what we need to carry on and get on with doing so I won’t be supporting this amendment”.
Cllr John Trapp said the original design offered a “wonderful building and a wonderful location”.
But he felt that reducing any part of it will “reduce what we actually intended to have – a wonderful building which was going to have a unique selling point”.
Design by Benchmarks Architects showing the projected £9m crematorium at Mepal, Cambridgeshire.
He said: “I think will be sad because of the whole idea the whole concept was one big project all in its entirety.”
Cllr Trapp was critical of the term value engineering which he said simply “means cheaper” and he feared the council might have to reduce facilities in other parts of the district if they picked up a higher tab for Mepal.
He said withdrawing parts of the scheme “would be actually quite disastrous so I would look at think about thinking about looking at the project again”
Cllr Charlotte Cane MP said: “It’s really important that we achieve value for money for this council.
“We are spending a lot of money on professional advisors for this scheme who we presume we think are competent and experienced and they have given us advice that the costs are going to increase.
“Build costs seem to be increasing daily so we can be fairly certain that that advice on the increased costs is indeed correct and may yet get worse especially as we’ve heard that we’re asking the contractor to work within a very tight time scale which in my experience always leads to a premium on the price.”
She added: “We are paying these people day by day as they develop this project so it seems to me that now is exactly the time to go back to full council and say these are the issues that you need to be aware of do you think it’s value for money for the district council to keep pursuing this project in the light of the warning of the overspend or the need to significantly change the project.”
She agreed that changes may bring the crematorium costs back in line with budget, but it needed to return to full council for debate if it is not what was agreed.
Design by Benchmarks Architects showing the projected £9m crematorium at Mepal, Cambridgeshire.
“Full council approved a state-of-the-art facility for our residents and if we have to do reduce the scope and have addition grant phasing for it, for heaven’s sake phasing nearly always adds to the cost and I can’t imagine wanting a peaceful experience of burying or visiting the grave of a relative and having building works going on around me,” she said.
Cllr Cane wanted full council to know cost implications “and decide whether at this stage it wants to continue spending local rate payers money on a project which is very different from the one that for council approved “.
Cllr Mark Goldsack said that once all the information about costs are known then would be the time to consider taking it to full council.
Cllr Anna Bailey
“We need to go to tender, and we need to get those figures back then bring the whole payer back to full council to review,” he said.
“The commitment to such a big project means we’re going to get bumps on the journey and let’s not lose sight of the fact here that the costs involved are unknown so the sooner we can move to a point of knowing, the sooner we’ve reality to deal with.”
Cllr Whelan reminded the committee she works in finance and in the construction industry.
“I see what’s going on a daily basis and I see the problems that we’ve got, and I see the contraction of the industry, which is coming you know, significantly because of the change in cost profiles of a lot of projects,” she said.
“We are seeing more and more major developers failing.
“We have to be aware of all of that. What it fundamentally comes down to is that costs within the construction industry are going to be significantly higher and they are continuously rising.
Cllr Lorna Dupre
“The rates of increase are still in double figures in the construction industry and there is no sign of that changing at this time “
It wasn’t a case of whether the council should pull the plug on Mepal “but far more about the need to make sure that every single member of the council is fully informed”.
She added: “To not send this to full council for that debate to be had at that level would be remarkably surprising and would suggest that we simply don’t want everybody to be involved in that discussion.”
