Accountant estimates the Bristol Beacon refurbishment cost £183m, £50m more than first thought

The Bristol Beacon refurbishment actually cost taxpayers £183m, a councillor has claimed. 

The Bristol Beacon, an historic music hall, went through a five-year renovation ending in November 2023 when it reopened to visitors. 

Originally it was thought the total cost came to £132m - almost three times the original £48m budget. 

At the time of reopening, the chief Executive of Bristol Beacon said the building was "in a worse state than anybody could have imagined” when the project began.

With the £132m figure total, it was believed £84.5m was paid for by the owners - Bristol City Council. 

To fund that, the authority is having to take out a series of loans over the next 50 years, with annual repayments of £2.2m a year. 

However, Cllr Jonathan Hucker (Conservative, Stockwood), an accountant, says the report by finance officers was “misleading” because it was based on securing loans with 1.5% interest rates.

Cllr Hucker said this was “fantasy economics” because interest rates on loans are far higher.

Cllr Hucker said the realistic best-case scenario was that the overall interest would actually be 4.1%, which over 50 years would bring the final total to £183million.

Bristol City Council disputes his figures and says the venue has been a "huge success" since reopening in November 2023.

A series of email exchanges seen by the Local Democracy Reporting Service shows that even council finance officers accept that the 1.5% figure presented to cabinet two years ago was wrong.

Bristol City Council’s head of strategic finance Richard Young told Cllr Hucker that more factors should and now be taken into consideration to properly assess how much major projects cost in terms of loan repayments.

Mr Young accepted in an email to the Cllr Hucker that longer-term borrowing could level out at 3.25% interest during the term of the loans, which would amount to £157million.

Cllr Hucker pointed out the 50-year loan rate from the Public Works Loan Board (PWLB), which councils borrow money from, was currently more than 5%.

Cllr Hucker said even the total bill he expected of £183million was “optimistic”.

He said: “Calculating the cost of finance for such a project is not an exact science because it depends on when you fix in the market.

“A paper presented to the cabinet meeting which approved increasing the spend on the Colston Hall (now Bristol Beacon) refurbishment to £132million assumed the project would be financed by a 50-year loan from the PWLB at a rate of 1.5%. 

“This is fantasy economics. It is simply not possible to obtain 50-year money at anything like 1.5%. The cost would be much higher than that.

“The council has now suggested that it would be more appropriate to assume a rate of 3.25%.

“This would result in additional payments of £47million over 50 years. A lot of money.

“However, I think the eventual outcome will actually be much higher than that.

“I believe that the taxpayers of Bristol have been misled over the cost of financing this project, and the information presented to the cabinet was seriously flawed.

In response, Council leader Cllr Tony Dyer (Green, Southville) said: “The past year has been one of huge success for the Bristol Beacon.

“The strength of the Beacon’s success directly impacts our city’s finances, with arrangements in place to ensure that the venue delivers overall positive social and economic benefits to the wider city.

“This past year has shown how valuable the Beacon’s offer is to us all and I look forward to celebrating many more anniversaries with the team in future.”

The council said that since it started paying for the refurbishment in 2016, it had borrowed £345million to fund all of its major capital projects, not just the Beacon. It said it’s done this mostly by using its own cash at an average interest rate of 1.25%.

During that time, it borrowed £49.2million externally long-term at an average interest rate of 1.93% and then a further £50million on a one-year deal with 5.43% interest.

It said it did not take out loans to fund specific schemes, so there was not an individual one just for the Beacon. 

The council said the venue’s revamp, along with all of its big projects, were paid for by a combination of using its own money and external borrowing. 

It said interest rates were forecast to fall from the current 4.75% to 3.5% over the next couple of years, so repayments on borrowing would be lower.

Bristol Music Trust, which runs the venue on behalf of the council, declined to comment.

Credit: Local Democracy Reporting Service / Adam Postans