The rising costs of the Woking Victoria Square development

The cost of Woking’s Victoria Square development has soared to more than 50% above what was anticipated when building work began in 2017.

Woking Borough Council (WBC) authorised borrowing of £700 million for its flagship town centre regeneration project on Thursday (February 11).

The council is now not projected to break even until 2062 – that is 11 years later than originally expected – but it said the project remained viable.

Cllr Ann-Marie Barker said: “The cost of this project has only gone one way; like the towers themselves that way is up towards the sky.”

Cllr Graham Chrystie said: “The final total we’re being asked to approve tonight is £700m. That’s a tremendous increase on the original estimated cost and all the way down the line costs have gone up like Topsy.

“One of the reasons for this is quite simply that if you take on the risk yourself, then you can be bitten quite badly and it seems in this case, this is what’s happened.”

“I don’t know who else we thought was going to be taking the risk,” said deputy leader Cllr Simon Ashall.

The loan is being paid back over 55 years and a £302m impact to WBC’s net cash flow is expected over the loan period.

Victoria Square was planned to be open this April but this has now been pushed back to October.

About a third of the spiralling costs are attributed to Covid. There have also been several significant scheme design changes, and there is the additional interest from borrowing more, lower rental income than first forecast and delayed income from the car park element, with increased labour costs due to Brexit also playing a very limited part.

The actual impact was £555m but a reduced interest rate helped to bring it down.

Cllr Graham Cundy said: “We are where we are and we’ve got to go forward, there’s no point in being pessimistic.

“The standard of the construction seems to be really quite excellent.”

When the project was first proposed in 2012, the council thought it would cost £150m, with WBC paying half and Surrey County Council match funding it, but that did not happen. When construction began in 2017 the bill had risen to £460m. By the time the final roof beam was installed in 2019, it had spiralled to £540 million.

“We shouldn’t lose sight of what we’ve got,” said Cllr Ian Johnson, who said he welcomed the jobs it would create. “When the cranes are down and when people can get in there and see what we’ve got, they’ll be absolutely gobsmacked, and I’m looking forward to that.”

Cllr Saj Hussain said Woking was the envy of other boroughs and councillors should be proud.

Victoria Square will bring 429 apartments in two 34 and 32-storey towers, and a 189-room Hilton hotel, plus commercial space and a multi-storey car park.

Cllr Chrystie worried about a decline in retail, and whether a change in the financial market after Brexit would affect the number of people wanting to commute to London from Woking.

Cllr John Bond said: “Online sales are increasing, Debenhams will close, other shops will close, and we’ll have to find some alternative, that won’t be easy either.”

“Well, isn’t hindsight politics a wonderful thing?” said Cllr Ashall.

“This is about place-shaping. It’s about the town centre that becomes somewhere where you don’t just go to shop, where you go to be entertained, where you go to dine and where people actually live, and where you go in the evening and see people out who live nearby.

“It will bring something that the town centre hasn’t really had in its modern history, and that is a sense of community.”

“Risk hasn’t increased,” added Cllr David Bittleston. “So many people are so excited about coming to Woking, they can see the future in it.

“It’s really important that we as councillors sell our town and it’s disappointing when people keep on harping on about the things that don’t exist.”

Some units have been pre-let, to Marks and Spencer, Italia Conti performing arts training, Gail’s Bakery, Sketchers, and Sports Bowl tenpin bowling relocating from Big Apple. Toys R Us were also expected, until they stopped trading.

The marketers Nash Bond said there was still interest from sole traders and smaller independent groups.

Council leader Ayesha Azad said: “Our Covid recovery is predicated on the completion of this project.

“The changing cost is due to the fact that we will not compromise on the quality of this project; this is our flagship project and a lot of our recovery rests on this.”

Cllr Deborah Hughes said: “I continue to have disquiet about the huge increase in costs, but feel that we have actually now gone beyond the point of no return with this and we do need to get it completed.”

The chief executive and director of finance said in their report it was not possible for the council to commit to town centre works other than Victoria Square, “until the future is clearer”.