Yeovil Octagon Theatre £30m redevelopment put on hold

A £30m scheme to redevelop one of Somerset's biggest theatres has been put on hold.

The council said this was due to interest rates rising four-fold, from 1.5% when the business case was approved to around 5.6% last month.

It said this would dramatically increase the costs of the project, even if construction costs stay the same.

The original business case included £10m of funding from Arts Council England, based on the theatre's main auditorium expanding from 622 to 900 seats.

The plan was based on the council borrowing £16.3m from the Public Works Loan Board at 1.5%.

Councillors were told current interest rates of 5.6% would take annual interest repayments from £245,000 to more than £1m a year, for the first few years.

The council said local government finances were under pressure nationally and last month's budget papers showed a projected £26.1m overspend for the current financial year.

This has led to a review of all spending, including capital projects, to ensure core services for those most in need are protected.

Federica Smith-Roberts, lead member for communities, housing and culture, said: "Work has progressed well to date but these are factors outside our control which will massively impact on costs, and we need to carefully consider the way forward.

"We absolutely understand the public interest in this, we're committed to keeping our residents informed every step of the way and it is important that we are open about the options available to us".

A list of new options will be presented to councillors in the coming months.