Audit reveals new fears for The Public

Business space remains empty at £72 million Black Country arts centre The Public, which could lead to "serious implications" for the future of the building.

Office space on levels one and four of the West Bromwich centre has still not attracted any tenants, more than two years after the centre opened its doors.

And a report from auditors KPMG reveals failure to let the space is considered a risk, with the possibility of investors clawing back millions of pounds pumped into the project.

The council has already been warned that European Regional Development Fund, which gave £8 million to the development, could demand money back unless creative businesses move in.

The arts centre in New Street has successfully leased out all of its 'lily pad' offices but is still seeking tenants for space on two of the floors.

The updated audit report, which will be discussed by members of Sandwell's audit committee on Monday, states that enclosed space on level four is currently being marketed by letting agents.

KPMG has already stated it is vital for the council to secure tenants.

Bosses have also been warned they should also consider the implications of mothballing or decommissioning the centre, consider alternative uses should operating costs of the building become too high and consider the costs of demolishing the building.

An options appraisal with responses to all of KPMG's recommendations is currently being drafted. The council was warned that if the building is not fully used, funding bodies could claw back millions in grants.

Linda Saunders, managing director of the Public, said the risk of investers clawing back funding would only arise if it meant the failure to attract tenants meant the Public no longer had a viable business plan.

"Not being able to let level 4 is important to our financial business case but it wouldn't and shouldn't result in any claw-back on its own. It is not something that would bring the programme to a halt but would obviously have serious implications for us," she added.