Cost of redeveloping a Flintshire secondary school rises due to high building material prices

The cost of redeveloping a secondary school in Flintshire has risen because of the soaring price of building materials.

Flintshire Council wants to create a combined primary and secondary school campus to accommodate about 1,300 pupils at the Argoed High School site in Mynydd Isa, near Mold.

An estimated cost of £31m was previously attached to the project, which would see existing buildings demolished to make way for Ysgol Mynydd Isa primary school to relocate to the Argoed site.

A planning application to host both schools under the same roof with some shared facilities was approved in January this year.

However, a new report has shown the proposed facility, known as the Mynydd Isa Campus, is facing a potential increase in costs due to supply chain issues.

The development is due to be funded through the Welsh Government’s Mutual Investment Model (MIM), which sees private firms contracted to build and maintain public assets.

The council will also be required to pay an annual charge similar to a rent payment for a period of 25 years before the building falls back into public ownership.

Due to the difficulties the construction sector is facing, that sum has risen by around £336,000 per year, meaning the local authority could have to pay as much as £1m towards the scheme annually.

In a report, Flintshire’s chief education officer Claire Homard said: “Over the past 24 to 30 months, various global issues have been impacting prices in the construction market.

“The key causes are Brexit, Covid 19 pandemic and now the war in Ukraine.

“The impact on the construction sector is that construction companies are unable to fulfil contracts on time, gaps are emerging between already signed prices and the real cost of materials and contractors are beginning to refuse to sign contracts with fixed prices.

“Analysis of the market by industry professionals is suggesting that nothing is likely to improve in terms of prices dropping or even levelling out in the foreseeable future.

“Consequently, to ensure that this project can be delivered financial close needs to be reached as soon as possible.”

An earlier report originally estimated the council would need to pay a service charge of £681,000 for the 2026-27 financial year.

Members of the council’s ruling Labour cabinet are being asked to approve the delivery of the project agreement to keep costs as low as possible.

Officials previously dismissed comparisons between MIM and controversial private finance initiative (PFI) deals, which were abolished by the UK Government in 2018 for failing to deliver value for money.

The Welsh Government developed MIM as an alternative with plans to pump £500m of investment into school buildings in Wales.

And Ms Homard said it was hoped the final annual service charge could be lower than anticipated.

She said: “The full business case to WG seeks agreement from WG to cap the council’s annual service charge contribution to a maximum value of £1m per annum.

“However, it is anticipated that the project figure will be lower than the maximum capped figure as the project moves towards financial close anticipated in July/August 2022.

“Should the project figure be confirmed as lower, this would reduce the annual service charge figure accordingly to the benefit of both WG and the council.”

If the recommendations are approved, construction of the new buildings is expected to start in August.

The campus would then open in September 2024, with the existing Argoed buildings to be demolished at a later date.

The report warns the council would be charged a fee of £2.7m if it decides not to pursue the scheme.

The proposals will be discussed by cabinet members at a meeting being held tomorrow (Tuesday, July 12).

Liam Randall – Local Democracy Reporter (more here).