Angus Council has vastly underestimated costs involved in building three small affordable homes on a site in Friockheim.
The local authority is now predicting that work on the site of the former Teachers Resource Centre at Eastgate will cost just under £700,000 an increase of £146,000 more than the budget approved by the council’s communities committee in August.
The council initially planned to just build two one-bedroom and one two-bedroom homes on part of the land, which is next to the building which will contain Friockheim Community Hub.
Costs increased when the design changed to support the possible community asset transfer of the resource centre.
This meant the plans were revised to include an access road to the resource centre and additional parking facilities.
An initial budget of £500,000 was increased to £550,000 in August.
However, the communities committee has now increased the budget by a further 26 per cent after the council found it had underestimated the costs involved for much of the work.
The committee approved contractor Andrew Shepherd Construction Ltd to carry out the work at a cost of £532,862.
It is also allowing £79,131 for professional fees, £20,000 for appropriation of the site, £5,000 for feasibility fees, £49,000 for the demolition for existing mobile units and £10,000 for statutory payments and sundry expenses.
This brings the total cost of the project to £695,994.
The Scottish Government will contribute £150,000 in the form of an affordable housing grant but the rest of the tab being picked up by the council’s housing revenue account (HRA).
A report to councillors said there were higher than expected costs with regards to site drainage (£12,000 more than anticipated), boundary walling and street furniture (£19,500), roadway and parking (£13,000), uplift of hard landscaped areas (£5,000), preliminary costs (£15,000) and specialist services including PV panels and house ventilation (£6,000).
There was also a general increase in the costs in the building trade of £11,000 and costs associated with telecom, gas, water and electricity connections were £15,500.
The council’s initial budget didn’t take account at all for the demolition of mobile units, which is now anticipated to cost £49,000.
Ian Cochrane, head of technical and property services, stated in his report: “The HRA Financial Plan (2014-2018) contained a gross allowance of £500,000 for three houses in Eastgate, Friockheim.
“This was subsequently revised to £550,000 in the Housing Capital Monitoring Report 2015/2016. The budget comprised £400,000 from the HRA Capital budget and £150,000 from the Scottish Government’s Innovation and Investment Fund.
“The HRA Financial Plan is currently in the process of being updated to 2015-2019 as part of the 2016/17 budget setting process.
“As part of this update the HRA Financial Plan will be adjusted accordingly to incorporate the estimated total cost for the project of £695,994.”