Newham's Stock Street Project, aimed at regenerating a heritage building into a community-led cultural and creative hub, is facing increased construction costs due to market pressures. The total council investment in the project is now £1.715 million, comprising £1.015 million from the Levelling Up Fund (LUF) and £700,000 from the United Kingdom Shared Prosperity Fund (UKSPF).
Paul Kitson, Corporate Director of Inclusive Economy & Housing, approved the allocation of £734,000 from the UKSPF to address these rising costs. Of this, £700,000 will be granted to Create London, the project's development partner, to advance Phase 1 construction. The remaining £34,000 will support the council's capital programme delivery, covering project management for the enabling works.
The Stock Street Project involves repurposing a council-owned heritage building at 31 Stock Street, Plaistow, into a mixed-use cultural and creative hub. The council has been supporting this project through the Levelling Up Fund (LUF), with Create London appointed as the development and operating partner.
The decision to allocate additional funding and vary the grant funding agreement with Create London was made on Friday 31st October 2025, according to the Officer Key Decision minutes. The decision was delegated by the cabinet on 6 May 2025.
The additional UKSPF funding will enable key infrastructure works to be brought forward from Phase 2 into Phase 1, ensuring eligible expenditure by March 2026. The £700,000 UKSPF uplift will be used to expand Phase 1 of the Stock Street regeneration programme, funding a package of core structural and infrastructure works identified with the project's cost consultant as achievable within the funding window (October 2025 to March 2026). This is expected to include items such as the installation of stairs and lift, internal partitions and finishes, sanitary fittings, mechanical and electrical systems, fixtures and fittings, roof works, demolitions, and associated preliminaries (e.g. scaffolding).
The project aligns with the council's Building a Fairer Newham objectives and Community Wealth Building strategy by delivering affordable workspace, local jobs, and community benefits. The additional funding aims to strengthen Create London's ability to secure further match funding from national grant bodies.
According to the Public reports pack, tender returns for the construction element of the project were higher than anticipated due to market pressures. Specifically, the ONS Construction Output Price Index indicates that new work prices rose by around 6-8% between Q4 2023/24 and Q2 2025/26. BCIS Tender Price Index data shows tender returns nationally increasing by a similar margin over the same period, particularly for mechanical and electrical components, steel, and concrete. This inflation, alongside design refinements, expanded the funding gap beyond the £0.4 million originally projected, to approximately £0.7 million. Despite the increased costs, the project is considered to represent strong value for money.
The remaining funding requirement, currently estimated at £849,000, will be Create London's responsibility to secure through external fundraising, charitable trusts, lottery applications, and value engineering. Discussions are ongoing with national funders including the National Lottery Community Fund, Historic England and Fidelity, with the expectation that the UKSPF uplift will strengthen the project's fundraising case by reducing delivery risk and the funding gap. To date, the Council together with Create London has already secured £331,000 towards Phase 2 and expects to receive further decisions from national funders by November 2025.
The UKSPF investment aligns with the council's Community Wealth Building strategy, focusing on inclusive growth, supporting local economies, creating opportunity and prosperity, and strengthening civic infrastructure.
Alternatives to accepting the additional funding or delivering Phase 1 without UKSPF integration were considered but rejected, as they would delay progress and increase reliance on unsecured future fundraising.
Should Create London fail to secure the full £661,000 balance for Phase 2, it would not result in breach of the current grant agreement. Instead, a protocol is in place whereby, if funding is not secured at least 2–3 months prior to Phase 1 completion, the Council will assume control of the building. In this scenario, the building, having undergone enabling works, will be compliant with current regulations and can be returned to Property Services for alternative use or disposal.