Plans to turn Octagon Theatre in Yeovil into Somerset’s ‘Flagship Arts Venue’ could be in jeopardy after a Somerset Council report found rising costs are making the redevelopment “unaffordable”.
The works were slated to cost £29m when approved by the council in February, but the report says costs have “dramatically increased” due to rising interest rates.
A statement from Somerset Council explained: “The business case for the Octagon redevelopment was initially approved on the premise of borrowing £16.318m which would be repaid, plus interest, by users of the venue through tickets sales and the ticket levy.
“Since then, interest rates have risen four-fold, from 1.5% when the business case was approved to around 5.6% last month – dramatically increasing the costs of the project, even if construction costs stay the same.”
The report suggests the current scheme could be scrapped in favour of an “entirely different” cheaper renovation costing £9m.
However, this would mean a £10m grant from DCMS and Arts Council England, which has been slated specifically for the originally approved project, would be pulled.
The report comes as Somerset Council reviews all its capital projects, as it is predicted to overspend by £26.1m this financial year.
Octagon Theatre was shut to the public in April. While no visible work has yet begun, and a contractor is yet to be appointed, the council has already spent £1.77m on a range of preparatory works.
Somerset Council's Executive is expected to review the planned project at a meeting on Wednesday (4 October).
Meanwhile, Yeovil Town Council will hold a meeting the day prior to “ensure the future of the Octagon Theatre project”.