WARRINGTON Borough Council has been forced to increase the approved budget for the long-running refurbishment of the Pyramid Arts Centre after the project was hit by 178 changes – with the main contractor launching a legal payment claim.
The council has also acknowledged that invoices were paid above the level originally authorised by its Cabinet, with its own report warning that those payments “may be considered to be unlawful.”
The full scale of the additional cost is being kept confidential.
An urgent decision by the council’s Leader, Hans Mundry, was taken after Gallaway Construction Limited, the main contractor, issued a Notice of Adjudication over payment for work carried out on the project.
The matter was subsequently reported to Cabinet on September 9.
The council says it needed to increase the approved budget so that it could meet its contractual obligations and negotiate with the contractor while seeking to avoid an adverse adjudication finding.
The council’s public report does not disclose either the increased project budget or the amount being claimed by the contractor.
Those figures are contained in an exempt appendix, with the council citing confidentiality relating to financial and business affairs and legal advice.
The original building contract was awarded to Gallaway Construction in August 2024 for £3,037,131.
When Cabinet approved the appointment the previous month, it allowed the contract price to vary by up to 10% and also approved a revised contingency for the project.
Culture Warrington describes the overall Pyramid redevelopment as a £4.9m project funded through Warrington’s Town Deal.
The council’s report states that the project was 100% funded by the Town Fund.
The council’s own information confirms that the Pyramid closed to the public in September 2024 and that Gallaway Construction has now completed its work and left the site.
178 changes to the project
The council says it was always aware that refurbishing the historic building would be challenging because of its age and listed-building requirements.
But the project subsequently encountered a series of problems.
These included:
A fire risk assessment identifying significant issues throughout the building.
Historic repairs, including dry rot, which had to be addressed.
Changes to the design after work began.
Supply-chain delays affecting materials.
An “unexpected number of instructions” issued to the contractor.
Claims for extensions of time.
Additional work to enable Culture Warrington to install a lighting rig in the Exhibition Hall.
In total, 178 instructions or changes were made to the original design and scope.
The council says the project was delivered under a traditional JCT building contract, under which “all risks resulting from any changes sat with the Council.”
That contractual arrangement is now particularly significant given the subsequent dispute over payments.
The dispute escalated on August 21 when Gallaway Construction issued its Notice of Adjudication.
The council had until 5 pm on September 1 to respond.
That tight deadline was given as the reason why the matter could not wait for a normal Cabinet meeting.
The council says the urgent decision was necessary to ensure there was sufficient approved budget to pay sums properly due and to negotiate with the contractor.
The Leader of the Opposition, Cllr Mark Browne, and Scrutiny Committee chair Cllr Wendy Johnson were informed, along with the Government’s Ministerial Envoys overseeing the council.
Perhaps the most significant element of the report concerns money which had already been paid.
The council states that it “has incurred spend, and paid invoices, in excess of the original executive authority.”
It goes on to say that paying invoices above the level authorised by Cabinet “may be considered to be unlawful.”
The report says this could require a Section 5A report to Cabinet.
Such a report is used where the council’s Monitoring Officer considers that unlawful expenditure may have occurred or may occur.
However, the wording of the report itself appears to leave the position subject to further investigation.
While one section says a Section 5A report is required, another says the issue will be considered once an Internal Audit investigation has been completed.
That audit is due to examine the council’s major contracts and projects, including whether appropriate contract management and cost-control arrangements are in place.
Its findings are expected to come back to councillors in November.
Pyramid work completed – but reopening date still unclear
Despite the financial and contractual dispute, the physical construction work has now been completed.
Culture Warrington announced on August 27 that the main contractor had left the site and the keys had been handed back.
Culture Warrington is now carrying out its own fit-out work before the venue can reopen.
The council says additional work was also supported by funding from the UK Shared Prosperity Fund, including structural work in the Exhibition Hall to enable a full lighting and sound rig to be installed.
The Pyramid is one of the key elements of Warrington’s Town Deal investment in the town centre and Cultural Quarter. The council says the project is intended to create a more accessible, modern and flexible venue for arts and cultural activity.
The additional financial pressure comes at a difficult time for Warrington Borough Council.
The authority is already dealing with a major financial crisis and its latest published budget information puts the gap between 2026/27 and 2029/30 at £178.9m.
The council says the financial problems have been driven by inadequate budgeting, the impact of its commercial portfolio and risks associated with six years of unaudited accounts. It says around £40m of savings need to be made during 2026/27 and that it has applied for Exceptional Financial Support from Government.
Against that background, the decision to increase the approved budget of a major capital project – while the precise amount remains confidential – is likely to attract further scrutiny.
The council will also face questions over how expenditure was allowed to exceed the authority originally granted by Cabinet and whether its contract-management procedures were sufficiently robust.
A Warrington Borough Council spokesperson said: “The council received a Notice of Adjudication for payment of contracted works for the Pyramid. The council continues to receive legal advice on its position and potential next steps, while also taking steps to address the other documented contractual issues.
“Notwithstanding this current issue, the project has been successfully handed over to Culture Warrington who are working hard on final works in preparation for the Pyramid’s reopening.”
The council has not publicly disclosed the revised project budget or the value of the contractor’s claim.
Those figures, together with the findings of the Internal Audit review and any decision regarding a Section 5A report, are likely to be central to the next stage of scrutiny.
Contractors have now left the site
