Inflation: Portsmouth City Council expects big projects to cost '20 to 25 per cent more' because of rising prices

Portsmouth City Council cabinet member for housing Darren Sanders said the council had ‘baked in’ potential increased costs at the start of the year but warned there was pressure on upcoming schemes.

Earlier this month he said they were threatening the £120m scheme to redevelop the land around Horatia and Leamington House in Somers Town.

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Speaking then, he said: ‘Events of the last two weeks, if left unresolved, have a real chance to affect my assessment of this project,’ he said at Tuesday's full council meeting. ‘These circumstances affect all councils. They affect all development projects, indeed any project in our city and our country.’

At his decision-making meeting on Thursday (October 27), councillors were told future contracts were being ‘monitored’ but that it was increasingly difficult to find companies willing to take on projects.

Meredydd Hughes, the council's assistant director building services, said the council was reviewing its procurement strategy as a result.

‘Contractors have become choosy in terms of the projects they tender for and have become more risk averse,' he said. 'We are looking at working closer with them and offering longer-term contracts.’

Cllr Sanders described the situation as ‘doom, gloom and a dark tunnel’ and said councils needed more government support.

‘We have to be sensible - and we have been,’ he said. ‘We have been able to deliver as many projects as we can but it has become more difficult recently with the cost of everything going up as much as it has.’