A Warrington Borough councillor has called for a formal investigation into the management of the Pyramid Arts Centre redevelopment amid a £500,000 payment dispute with the project’s former contractor.
Independent Cllr Graham Gowland, who represents Lymm South, has written to Warrington Borough Council’s senior statutory officers raising concerns about financial controls, contract variations and the potential cost to taxpayers.
His intervention comes as Gallaway Construction Limited faces a reported High Court winding-up petition hearing today, Wednesday, October 14, following an 18-month commercial dispute over payments for work associated with the Grade II-listed town centre arts venue.
The council has confirmed that its internal audit service is examining the matter and that the Monitoring Officer is considering whether a formal report under Section 5A of the Local Government and Housing Act 1989 is required.
However, the authority maintains that the redevelopment has been handed over to Culture Warrington, which is carrying out final works ahead of the Pyramid’s reopening.
In his submission to the council, Cllr Gowland has requested an investigation into whether appropriate financial authorisations were in place for changes made during the redevelopment.
He claims that 178 design instructions or variations were issued after work began without the necessary financial sign-offs or formal delegation approvals.
He wants the council’s Monitoring Officer, Section 151 Officer and Head of Internal Audit to examine whether the authority entered into financial commitments outside its constitutional spending limits.
He has also called for the council to consider referring the circumstances to Cheshire Constabulary’s Economic Crime Unit to establish whether there are grounds for a criminal investigation.
No criminal wrongdoing has been established, and any decision on a police referral or subsequent investigation would be a matter for the relevant authorities.
Cllr Gowland has additionally raised concerns about compliance with construction payment legislation, including whether the required Pay Less Notices were served during the contractual dispute.
Such notices can be important in determining the amount payable under a construction contract. Their legal effect in this case, however, would depend on the contract, the relevant payment applications and the circumstances surrounding the dispute.
Warning over potential costs
Cllr Gowland estimates that the council’s potential financial exposure could reach between £1.33m and £2.13m if the dispute escalates, although the figures have not been independently verified.
His estimate includes the disputed £500,000 balance, around £80,000 in potential late-payment interest and between £150,000 and £300,000 in anticipated legal and insolvency-related costs.
He has also included a possible £500,000 to £1m or more in costs associated with a hypothetical escalation of government intervention in the running of the council.
That final element is a projection rather than a confirmed liability. No decision to replace the council’s existing oversight arrangements with statutory commissioners has been announced in the information provided.
Calling for urgent action to resolve the dispute, Cllr Gowland said: “Issuing nearly 180 unbudgeted variation instructions without proper constitutional sign-off isn’t just poor management—it raises fundamental legal questions.”
He added that forcing a local business to absorb disputed costs could have serious commercial consequences and warned of the potential financial implications for local taxpayers if the matter proceeded to insolvency proceedings.
Cllr Gowland is urging the council to pursue an emergency standstill agreement or interim settlement before the scheduled court hearing in an attempt to limit further costs and protect local supply chains.
Council confirms internal audit
A Warrington Borough Council spokesperson said: “The council received a Notice of Adjudication for payment of contracted works for the Pyramid.
“The matter was considered at the previous Cabinet meeting on 9 September, is being examined by the council’s internal audit service, and the Monitoring Officer is also giving due consideration to providing a report under section 5A (2) of the Local Government and Housing Act 1989.
“Should a Section 5A report be required, this will be brought to a meeting of Cabinet.
“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’s statement confirms that the payment dispute is being examined, but does not set out the amount it considers outstanding, its response to the allegations concerning the 178 variations or whether it intends to make a police referral.
The Pyramid, in Palmyra Square South, is a prominent town centre cultural venue and its redevelopment has been intended to secure its future as a community arts and performance space.
The dispute with Gallaway Construction now raises questions about the final cost of the project and how the contractual issues will be resolved.
The council’s confirmation that Culture Warrington has taken handover of the building means preparations for reopening are continuing while the financial dispute is examined.
The outcome of the internal audit, any decision by the Monitoring Officer and developments in the contractual and court proceedings are likely to be central to establishing the extent of any financial exposure and whether further action is warranted.
Contractors have now left the site
