City of Wolverhampton Council has won a legal challenge that disputed increased building costs for the Civic Halls refurbishment project.

In order ensure best value for money and to protect public funds, the council challenged contractor Willmott Dixon over some claims for additional time and costs known as ‘compensation events.’ Adjudicators have ruled in favour of the council on two disputed issues after receiving expert advice that the sums were not payable under the terms of the contract.

This was the first round of a series of compensation event challenges. A report on the adjudication will be taken to today’s (Mon) Audit and Risk Committee meeting.

Chair of the committee Councillor Craig Collingswood said: “This clearly demonstrates the council’s ongoing commitment to ensuring the best value for money and protecting the public purse. It is great that the completion of the refurbishment will take place within the agreed current budget.”

The Audit and Risk Committee report includes details of two disputed compensation events. Firstly, Willmott Dixon claimed to have experienced delays of 73 weeks compared to 45 weeks recognised by the council. The adjudicator ruled that delays of 45 and a half weeks should be recognised.

Secondly, Willmott Dixon was seeking a 100% uplift on ‘working area overhead’ costs however the adjudicator ruled there should be a 0% uplift. The rulings can be appealed by the contractor to the High Court. The council has stated it would robustly defend its position if an appeal was lodged.

Earlier this year, auditors Grant Thornton found there to be no risk of ‘significant weakness’ in the council’s management of the project and recognised the strong governance arrangements in place.

Grant Thornton’s annual report also recommend that the council monitor the position with Willmott Dixon and encouraged it to report back on the recovery of any payments.

The venue will reopen as The Halls Wolverhampton and have been handed over to world renowned operators AEG Presents. Once open, it is expected to attract 300,000 visitors a year to the city and bring £10 million annually to the local economy.