The City of York Council has confirmed it is terminating a £9 million contract to revamp the historic Guildhall.

The local authority said due to spiralling costs on the two-stage design and build deal, it is pulling out of the deal with Interserve and will instead consider its options before inviting new bids for the project.

Neil Ferris, the council's Director of Economy and Place, explained: "I can confirm we have terminated our contract with Interserve to develop the Guildhall.   We set-up the contract following government procurement rules and as such, included a contractual break point after the first stage of the contract. 

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"We recognised from the start that given the site complexity and risks around the foundation structure, there was always the chance that estimate would be higher than anticipated. We structured the procurement in this way to protect York residents from potentially spiralling costs."

Continuing, Mr Ferris said the council remains committed to the development and is "excited about the potential it offers local businesses, communities and visitors".

"Our next steps are to review options to reduce costs, such as revising the scale, scope or access arrangements to the site and we will invite members to confirm their preferred option in May," he said.

"In the meantime, to reduce delays, we will progress less disruptive works, such as fitting new utilities."

(LM/MH)