Minster Exchange in Cheltenham town centre is over budget by £2.5m and has been delayed by over a year.

The project was originally due to cost £5.2m - with a grant of £3.1m secured by GFirst LEP from the Government's Build Back Better fund and the remaining £2.1m from Cheltenham Borough Council.

Now the total cost of the project is set to come in at around £7.7m.

The project was initially due to complete in summer 2022, but now the council say it will be either spring or summer 2023.

The council has just agreed £2.5m extra funding for the project to get it back on track.

The 20,000 square foot Minster Exchange is being designed and delivered by Workshop Cheltenham Ltd (WSC Ltd), which used a number of subcontractors for the project. It is set to transform the grounds of St Mary's Minster, offering innovative workspace in the form of modular construction for the cyber tech, digital and creative sectors, a Growth Hub to support business development and an event space and cafe.

But WSC Ltd reported the scheme has experienced delays, resulting in the big shortfall of cash. It said the delays relate to national supply chain issues from Covid and Brexit, national inflationary pressures, construction challenges and project delivery issues.

The council believes the additional funding will ensure value for the taxpayer, while supporting a company at the centre of the local cyber industry. It said the project remains financially viable, with a 25-year return on investment, a common rate of return in the construction industry.

Bruce Gregory, managing director of WSC Ltd, said: "As the developer of the MX, and as a growing business in Cheltenham, this has been a challenging project, due to significant inflation, construction challenges and other issues. We've worked hard to mitigate many financial challenges and other pressures impacting on the project.

"The significance of the scheme in terms of the positive impact on Cheltenham High Street and wider economic benefits is such that the council has agreed to provide support to ensure the project can be futureproofed and delivered.

"We know only too well the importance of the MX scheme in terms of its positive impact on Cheltenham High Street, and the town's burgeoning cyber and technology community and so we are grateful to CBC for their intervention and their financial support to ensure this project will achieve the benefits for Cheltenham."

Cllr Rowena Hay, leader of Cheltenham Borough Council, said: "We had a rare opportunity to secure over £3m for a shovel-ready project through the Build Back Better scheme and as such, at the time, we had to take a risk-based approach to secure the funding. We had to work within a very tight timescale for what we believed was, and still is, an innovative scheme to directly support businesses and our wider cyber ambitions.''

The additional funding for MX is part of an investment package from the council announced today (December 13) to support the continued success of the town centre.

Punchline said: "We take our hat off to the council for making a grab for the £3 million Government funding at the time. Hindsight is a wonderful thing. This was a difficult project, perhaps made more difficult by using modular construction."