CITY leaders are carrying out an internal inquiry to discover where blame lies for a multi-million pound regeneration overspend.
The spiraling cost of rebuilding the Waygood Art Gallery in Newcastle’s High Bridge is now set to pass £10m after officers at the council handed control of the project to arts bosses. City treasurers will now have to borrow cash to ensure the building work continues.
Questions have been asked over the handling of one of the city centre’s most important regeneration schemes after a £2.7m overspend emerged.
At least part of this is directly the fault of “fragmented project management”, according to the council’s own officers. They also said the effectiveness of Waygood as “a partner, senior user and fundraiser has been inconsistent”.
Mishandling the project led to expensive delays, with the European Commission eventually withdrawing £500,000 from the gallery after bosses failed to follow funding timetables.
The council inquiry will look to see what went wrong and who handed the taxpayer a bill for at least £1.9m, with the remainder paid for by an Arts Council contribution of £800,000.
At an executive meeting this week opposition Labour group leader Nick Forbes warned that with interest added on, the final debt to the council will be much higher, and might take decades to repay. The debt could be avoided if the city decides to cut its losses and sell the flagship gallery once work is finished.
Last night Mr Forbes said: “Not a penny more should be spent on this until we know for sure what went wrong and who is to blame and action taken against those who are responsible.
“We have raised this issue before and yet it appears despite warnings the council has marched into this. I can think of 101 better uses for this money, from improved schools to more community safety staff. And we are not even getting the full picture because the borrowing cost will be significantly higher than reported here.”
Peter Allen, the council executive member for resources, said at the meeting that one question everyone would want answering is “how did we get ourselves into this mess?”.
He added: “You always come up against problems when you start messing around with old buildings like this. What we want to know is are there any lessons we can learn if we handle a project like this again.” Mr Allen appeared to suggest arts bosses who led on the project, including creative director Helen Smith, will have their role in the overspend reviewed as part of the inquiry.
“I think there are concerns about the ongoing governance arrangements and I know there is a review taking place.
“Certainly we would want to look at the current situation and funding. At the end of the day we will need another report to look at the governance issues and to makes sure we do not have future calls on our limited finances because of issues within that organisation.”
Deputy council leader David Faulkner claimed the responsibility for the delays was shared among the two parties, but added the Labour had to accept some blame after they started the project in 2002 and did not ensure the right management procedures were in place.
“Although the council is clearly the accountable body and has responsibility for this, in reality you have an independently governed and managed institution. We put a lot of pressure on (people such as) Helen Smith who were not appointed to do that and were asked roll up their sleeves and get stuck up and involved in things,” he said.
“It has been said already that in the case of this project we should have got much closer than we did but we were respecting the independent nature of this organisation.”
Click the links below for previous stories on the Waygood Art Gallery
Nick Brown accuses council chiefs over Waygood Gallery overspend
£1m more needed for troubled Waygood art gallery
Taxpayers will pay for gallery failures