A revised full business case (RFBC) for the Perry Barr Regeneration Scheme is due to be discussed at the Birmingham City Council’s next Cabinet meeting on Tuesday (March 17).

The original budget for the project had a £492.6 million ($639.6 million/€588.2 million) price tag.

The report claimed cost pressures have emerged as a result of the "overheated local market, through construction cost price inflation, the demand for construction workers in the Perry Barr area and a fixed delivery date".

Increased housing construction costs are reported to be responsible for £48.4 million ($59.7 million/€53.9 million), while replacing the bus depot and relocation of the Job Centre, which will cost £13.8 million ($17 million/€15.3 million) and £1.9 million ($2.3 million/€2.1 million) respectively.

An increased contingency and further financing costs were also highlighted as causing the overall rise.

The revised RFBC revealed it aims to reduce these extra costs by £25 million ($31 million/€28 million).

Birmingham City Council say the RFBC was drawn up following detailed consideration of nine potential options.

The revised plan is claimed to include significant mitigation strategies, with the Council promising it will commit £35.7 million ($44 million/€39.7 million) of funding to the project through the RFBC.

The funding will consist of £15.7 million ($19.3 million/€17.5 million) from existing capital contingencies and £20 million ($25 million/€22 million) from windfall capital receipts.

Birmingham City Council says it proposes that options are explored with partners to identify suitable funding solutions that increase the level of contingency for the project to a level suitable for the size and complexity of the scheme.

The preferred option will also see the number of beds cut by 184, which the Council claim will be managed at Games time through effective scheduling of sporting activities.

It is claimed this option will help to ensure the commitments for Games-time accommodation are met, as well as maximising benefits of the scheme for the people of Birmingham as a housing legacy project.

The project is expected to deliver a total of 1,400 homes for citizens, as the first phase of a long-term scheme to build 5,000 new homes in north-west Birmingham.

The project is due to be handed over to the Birmingham 2022 Organising Committee by March 31 in the year of the Games, which are due to take place between July 27 and August 7. 

"The redevelopment of Perry Barr and the surrounding area is one of the council’s most important projects," Ian Ward, the Leader of Birmingham City Council, said. 

"It will lead to major benefits for existing and future residents, enabling Perry Barr to become one of the most vibrant, dynamic and well-connected parts of Birmingham.

"Through this revised full business case we clearly demonstrate the substantial progress made on reducing financial pressures, whilst honouring our commitments to the Commonwealth Games, the best possible athlete experience and to the people of Birmingham, in terms of the Games having no detriment to the taxpayers of the city."

Calls have been made of the Birmingham City Council to drop plans to demolish the Perry Barr Flyover.

West Midlands Mayor Andy Street is among those to have backed plans to drop the proposal, with claims that money saved could instead by put towards the Athletes' Village.

The Birmingham City Council insist the RFBC "reiterates the reasons why the planned A34 highways improvements are of critical importance pre-Games".

They claim the report shows that the existing local highways infrastructure would be unable to accommodate the improved public transport facilities required to support the wider regeneration of Perry Barr, leading to a reduction in the environmental credentials of the scheme.

Retention of the Flyover, it is claimed, would lead to a failure to deliver over 200 new homes earmarked for post-Games development.

"The importance of this scheme cannot be underestimated," Ward added.

"It is a catalyst for many improvements in Perry Barr, which would have been delivered at a much slower pace or not at all if it were not for the investment the Commonwealth Games is levering into Birmingham.”

"As with all major projects, we will continue to robustly monitor progress and work collaboratively with our delivery partners to enable a successful Commonwealth Games and the meaningful legacy these plans and the hundreds of millions of pounds that are being invested into the city will deliver."