inland revenue

The cost of the new Inland Revenue building in Nottingham has soared by 60% because of changes in design and specification and the loss of mechanical and electrical contractor Kentz.

Originally expected to cost œ50 million, the Inland Revenue this week admitted the price was now œ80 million. And contractors on the job believe that figure is rising.

The news will be a major embarrassment to the Government at a time when public spending is such a sensitive issue.

The building has been dogged by controversy ever since 1991 when it was abandoned as a design and build scheme originally to be carried out by Alfred McAlpine.

This change in heart - which resulted in an architectural competition and a management contract for Laing Management - is blamed for the present difficulties.

Firms working on the scheme have told Contract Journal of a series of alterations to the design by the client which have often required work to be carried out twice on site.

One contractor said: 'Most of the contractors I know on the site are overspent and over time. There have been problems with the floors of the building being replaced and redone, because the design keeps changing and they change their mind about what they want. Even the piles had to be pulled up after they changed the design originally.'

An Inland Revenue spokeswoman said: 'In real terms we have not exceeded the original œ50 million budget. But this figure does not include contingencies, allowances for delay and interest. We certainly did not allow for the demise of the electrical contractor.'

Despite the cost increases the Inland Revenue claims the scheme is on time and staff will be moving in next spring.

As Laing Management's new chairman Peter Gregory settles into his role he finds the company under the spotlight on several contracts including this, the MI6 building and the British Library. The company said the cost overrun was a matter for the Inland Revenue to address.

l British Library probe see p 2