Major restoration work to return Birmingham’s Grand Hotel to its former glory is set to be expanded.

Hortons’ Estate, which originally built the hotel in 1875 and is carrying out the work, is to invest a further £1 million in the restoration of the facade of the landmark hotel.

It means the company’s investment in the facade will hit £3.5 million in total – even though it accepts it will not see a return from the work.

The growth of the project will mean an extension to the scaffolding which already hides the 360ft-long building along Colmore Row. Now a further 100ft of scaffolding will go up to repair more of the historic facade along Church Street and around the back into Barwick Street. The wider work is expected to be completed by summer next year and comes ahead of plans for a bigger £30 million scheme to transform the building into a luxury hotel with 152 rooms and eight new suites.

Meanwhile, new display boards are going up around the hotel revealing snippets of its history.

Chief executive Tony Green accepted that the facade work on the Grade II*-listed building would not generate a return.

He said: “It is absolutely not commercial – this is £3.5 million that we are never going to get back.

“The Horton family built this building and the Horton family still own Hortons’ Estate. Clearly in that sense it is afforded different privileges that other buildings would not be.

“The Horton family want to see this building brought back to life. Although it has to make a commercial return, it is over a much longer period and with much lower thresholds that other people would do.”

The Grand was originally six buildings – one of which was knocked down to construct the new Barclays building.

It went on to play a major part in the city’s business and social scene, with King George VI, Winston Churchill, Neville Chamberlain, Charlie Chaplin, James Cagney and Joe Louis all paying visits.

It was recently made Grade II*-listed – which puts it in an exclusive group with less than eight per cent of the city’s listed buildings.

The original plans to repair the facade focused solely on the building first constructed by Thomas Plevins in 1875, but the new work takes in an attached building.

However, Mr Green said it made sense to ensure the exterior of the buildings remained consistent throughout, and the new scaffolding is expected to be erected in the next month.

He said: “The repairs that have been done over the years had meant that the buildings down Church Street had increasingly started to look like the Plevins building. Even though the work will be different, the outside of the buildings will look the same, so we realised that it would going to look odd if we didn’t do the work now.”

He added: “Maybe we should have realised before we started, but the appearance of this extra work is the same as the building we are working on and we were going to end up with a dividing line where it didn’t look the same.

“If we left it until the main contract took place then it would never look the same, because the work would have been done at a different time, so it became clear we had to do it now.”

The firm has submitted plans to Birmingham City Council and will also seek a permit for scaffolding.

Plans for the new hotel, which were drawn up by architect Berman Guedes Stretton, include restoring its listed facade and grand staircase, renovating its famous Grosvenor Suite and moving its main entrance on to Church Street.

However, progress has been slow and Mr Green said Hortons’ was still working to ensure a commercially-sound resolution can be found.

He said: “The situation is we understand the terms in which international hotel companies will take this hotel on. We haven’t agreed the terms, but we understand them.

“The problem is the cost of achieving the product they want to sell, and other things like there not being enough lifts. We need to keep working away to make sure the commercial return justifies the work.”