Factory International: report addresses progress - and budget pressures

  • Monday 3 October 2022

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A report on Factory International, Manchester’s new landmark cultural space, provides a detailed update on the project, including its budget challenges.

The building is nearing completion and after fit out will welcome its first visitors in June next year, forming the centrepiece of the 2023 Manchester International Festival.  

The unique building, designed by world-leading practice Office for Metropolitan Architecture (OMA), is based around large, open, ultra-flexible spaces that can be constantly reconfigured to enable artistic work that can’t be made anywhere else in the world. Its cavernous 21m high warehouse (with a capacity of up to 5,000 people standing) can be divided from its hall (which can house an audience of up to 1,600 seated or 2,000 standing) by a full-height acoustic wall – or opened up into one huge space. Oscar winning director Danny Boyle, speaking at its recent programme launch, said: “It’s impossible to describe it without using the word ‘amazing.’” 

Tate Modern Director Maria Balshaw, at the same event, said: “What’s so amazing about this space is its scale and its flexibility...I don’t know another space like this in the world.”  

Factory International will host everything from major exhibitions and gigs to intimate performances.  It will also play a vital role in contributing to Manchester’s economy and jobs and skills within the region. Even before opening it has acted as a catalyst to the regeneration of the St John’s area of Manchester which has transformed since 2015 from the derelict former ITV Granada site to a thriving mixed-use area, echoed by a corresponding transformation on the opposite side of the River Irwell in Salford. 

Challenges and budget  

However, the report also outlines the extremely challenging wider environment the project is being delivered in, with exceptional levels of inflation, workforce shortages and supply chain disruption exacerbated by the war in Ukraine. These factors continue to significantly impact on the construction and fit-out costs for the building. 

Figures from the Department for Business, Energy and Industrial Strategy (BEIS) show a 26.4% increase in prices for all construction work since June 2021.  

This includes a 58.2% increase in the price of concrete reinforced bars, a 46.3% increase in the cost of fabricated structural steel and a 28.3% increase in the cost of precast concrete products. 

While the existing budget made reasonable allowances for contingencies, it could not have predicted the exceptional circumstances with steep levels of inflation and considerable supply chain challenges that are still being experienced as Factory International approaches its opening in June 2023.  

The ongoing impacts of Covid-19 – with precautionary measures still in place across the construction industry – and challenges associated with the one-off and complex nature of the design have also contributed to budget pressures.  

Value engineering without compromising the vision for the building, tight cost control and efficiency savings have prevented costs from escalating further. 

In order to ensure the completion of Factory International and the successful delivery of its benefits to the city, the Executive and Council will be asked to approve a budget increase of £25.2m. £10m of this will be met from existing contingency funding set aside in the Council’s capital budget for anticipated inflation impacts. The remainder will be met from borrowing.  

This will take the overall budget to build Factory International to £210.8m . More than £105m of this consists of Government and Arts Council England funding for the project which otherwise would not have been available to the city. The Council’s increased contribution would be added to the £55.4m it has already invested with the remainder being met from commercial and philanthropic fundraising, which it is hoped will also help offset the Council’s costs. 

Separately, the Council will also underwrite Manchester International Festival’s increased costs for the fit out of the building which have also been driven up by soaring inflation by up to £7.8m. This is critical to enable the venue to operate. 

There is, however, scope for the Council to recover a significant proportion of these capital costs through a long-term naming rights agreement for Factory International and through further public funding sources. 

Economic and social benefits 

As well as the obvious cultural benefits of a world-class performance space, there are a host of benefits for the city’s economy and its people.  

Analysis suggests that in its first decade Factory International would create or support around 1,500 jobs and have a cumulative economic impact of £1.1bn over a decade. 

The venue is at the heart of the St John’s Creative area and is already acting as a catalyst to job creation and investment there. Together with the Science and Industry Museum it will form a ‘cultural campus’ for Enterprise City, which has the potential to support up to 17,000 jobs along with the 1,000 other jobs already generated in St John’s. St John’s is already generating extra business rates for the city. 

The creative industries are the fastest-growing sector in Manchester, making an annual contribution to the city’s economy of around £1.4bn, and the creation of Factory International will sustain and grow this vital sector even further. Factory International will boost Manchester’s pull as a nationally and internationally important centre for culture and creativity.  

It will act as a major training centre for the next generation of creative talent. For example, Factory Futures will see 10,000 young people reached over the next five years with support to access careers in the creative sector. 

Factory International will attract a predicted 850,000 visitors a year – 200,000 of them from outside Greater Manchester – making a significant contribution to the city’s visitor economy. In Manchester International Festival years this will increase to 1.15m visitors – with 245,000 from outside GM.  


87% of construction spending so far has been with Manchester and Greater Manchester-based companies – representing a £100m investment in the area. 

Cllr Luthfur Rahman, Deputy Leader of Manchester City Council, said:

“Factory International will be an incredible asset for Manchester. Not only will it strengthen the city’s reputation as a nationally and indeed globally important centre for the arts, it will also help stimulate and sustain our fast-growing cultural sector which contributes £1.4bn to our economy every year. It will act as a major training centre for Manchester people pursuing careers in the arts.  

“Factory International will further create and support jobs in the hospitality sector by attracting hundreds of thousands of visitors to the city every year. Sitting in the heart of the St John’s Quarter it has already helped attract investment and job creation here and will continue to do so. 

“It will be inclusive and inspiring – with plenty of free and low cost events and opportunities for Manchester people to get involved – as participants as well as audiences.  

“It’s an audacious project and with that comes challenges, especially when set against a volatile economic backdrop, but the ongoing benefits for many years to come will far outweigh the one-off cost. We must not lose sight of that.”  

The report will be considered by the Council’s Resources and Governance Scrutiny Committee  on 11 October and the Executive will be asked to approve the increased budget when it meets on 19 October. 

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