Coventry council racks up £900k overspend on IKEA project and records Guildhall loss

Coventry council overspent on its IKEA project by £900,000 last year, a new report shows. It also made a loss against St Mary's Guildhall of £400,000 despite huge investment in the building.

The council blamed inflation for rising costs and said work on the scheme to turn the IKEA building into a cultural hub is set to finish next year. The authority also said it is working to boost visitor numbers to the guildhall.

Coventry councillors agreed cuts to services of £8.5 million in February, including switching off streetlights overnight, reducing the maximum council tax discount, and raising car parking fees. The scheme to turn the old IKEA building into a collections centre has been in the works for several years.


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Councillors agreed to borrow more money for the project in March due to rising costs. The authority's opposition called for it to put essential services first and not agree more spending on the building's lower floors, but a senior councillor said the scheme aims to pay for itself and there must be a "robust" business case for the floors.

St Mary's Guildhall won Best Family Attraction in the Muddy Stilettos regional awards
St Mary's Guildhall won Best Family Attraction in the Muddy Stilettos regional awards -Credit:Rod-Kirkpatrick

Details of council spending for 2023-24 are revealed in papers for a cabinet meeting on 9 July. It reveals that overall the council overspent on services by £14.2 million with almost half going on adult social care and housing alone.

This was mostly offset by a £12.4 million underspend in other budgets, including a boost of £5 million in dividends from a council-run waste disposal company. The council's final budget has a gap of £1.8 million which councillors will be asked to balance with reserves at meetings next week.

Of the council's overspends last year, business, investment and culture accounted for £1.4 million. The Local Democracy Reporting Service (LDRS) asked the council why it had incurred the extra costs around IKEA and St Mary's Guildhall.

On St Mary's Guildhall, a council spokesperson said: "Following a massive refurbishment and restoration programme, including work to uncover and restore the Medieval Kitchen, the stunning St Mary’s Guildhall reopened in July 2022.

"New interpretation programmes, including a digital tour and interactive activities have been developed to explain the story of the tapestry and enable visitors to clearly see and understand more about the beautiful artwork.

"The transformation was made possible by a £1.4m grant from The National Lottery Heritage Fund, thanks to National Lottery players. and through the Cultural Capital Investment Fund resourced by Coventry City Council, Arts Council England, and the Government’s Getting Building Fund through Coventry and Warwickshire Local Enterprise Partnership - amounting to a further £4.9m.

"No Ordinary Hospitality Management is managing the venue using their specialist expertise to help visitors to enjoy the heritage attraction, and also grow the business including Tales of Tea which provides quality dining.

"But like all new businesses, and against the backdrop of high inflation and the cost-of-living crisis, this will take time.

"However, we are working closely with the team to boost the level of visitor numbers in all aspects of the business and we are confident that this is achievable."

On IKEA, the spokesperson said: "In February 2021 Coventry City Council took the decision to acquire the former IKEA building to enable an exciting and ambitious refurbishment project. This will include the creation of a Collections Centre for nationally significant cultural, arts and historical artefacts, in collaboration with national partners Arts Council England and British Council as well as Culture Coventry Trust and Coventry University.

" Covid slowed the original timescales down and inflation pressures has seen costs rise. And although we have found some interim uses for the building, including a number of film and production company uses, we also took on some additional operating costs last financial year including business rates.

"The building has now been handed over to our contractor who will undertake all of the construction work with completion expected at the end of next year."

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