The cost of a Morrison Construction project to build a Passivhaus grammar school in Paisley is set to grow by more than £10m, the local council has said.
A Renfrewshire Council meeting last week recommended raising the budget for the new Paisley Grammar School and Community Campus (PGSCC) from £75.1m to £85.5m
It heard that the proposed move was down to “volatility and uncertainty in the construction market”, especially labour costs.
The final decision rests with the Scottish Government. PGSCC is included in the Learning Estate Investment Programme (LEIP), which is a joint investment programme between the devolved Scottish Government and local authorities to improve the condition of the schools estate in Scotland.
Galliford Try company Morrison Construction is conducting enabling works for PGSCC under a preconstruction contract awarded in 2022.
Morrison is also due to begin the main construction phase in June, the council said in a revenue and capital budget update.
The project has been split into 57 subcontract work packages, which were tendered through Morrison Construction’s supply chain, it added.
This tendering process revealed “a higher level of cost increase than had been anticipated due to a range of issues, including inflationary materials costs, a limited number of suppliers bidding for work, and difficulty securing skilled labour”, the council stated.
Alastair MacArthur, director of finance and resources at Renfrewshire Council, told the meeting: “Certainly over the past two to three years, there have been significant increases in materials costs which have driven very significant cost pressures across a whole range of capital projects.
“And while those materials costs increases appear to be moderating a bit, it is more on the labour cost side that we are now seeing increased pressure.”
The council said it can afford to borrow more to complete the new school alongside funding from LEIP.
However, it noted a risk that its spending needs “are not financially sustainable if the use of one-off reserves to balance the budget is a recurring feature over the longer term”.
A report to the council last November stated that the new grammar school should be completed by summer 2026.
It will feature sports pitches, outdoor learning facilities and a 300-seat theatre.
Earlier this year, the Scottish Futures Trust (SFT) published a cost review briefing in which it described a preference for Passivhaus accreditation in LEIP projects.
This delivers a premium of 5-25 per cent for main contractors, the SFT said, although some large subcontractors told it they were losing money on projects.
