The economic crisis has hampered plans by Cambridgeshire County Council to complete assigning the lease of a major part of Shire Hall, Cambridge, its former headquarters.
The council had promised savings of up to £39m over 30 years when the decision was made in 2018 to leave Shire Hall and move to new purpose built offices at Alconbury.
But despite agreeing in 2021 to lease a major chunk of Shire Hall to property developers Brookgate – the company behind the CB1 station development – for it to be converted to a 255-room apart-hotel, talks appear to have stalled.
It has become an expensive ‘elephant in the room’ for county councillors who have been surprised by the financial quandary the lease is creating.
Confidential briefings have been provided to all group leaders of the county council and the public and press is being excluded from a new paper on the issue that was discussed by the strategy and resources committee on Thursday January 26.
Council leader Lucy Nethsingha told me that the move from Shire Hall was not something that would have happened under a Labour/Lib Dem/Ind coalition.
“And the decision about the future of Shire Hall would not have been made in way it was made and certainly the plans for Shire Hall are not the ones we would have chosen,” she said.
Cllr Nethsingha said that having built the new headquarters, “it is too late to change that now; we have to work with it but we are certainly facing some tricky positions around those decisions that were made then”.
She said she was still hopeful an agreed scheme for Shire Hall will come to fruition.
“But given the financial situation an awful lot of deals are up in the air -it remains a bit of a nightmare having to handle that as uncertain as it is.”
She said no deal had yet been signed.
The county council’s finance and procurement director Tom Kelly confirmed no lease had been signed off.
“The proposition was never to sell the freehold; some of challenges are inflation, and around borrowing costs presented in a number of particular places and is at a sensitive stage now” he said.
However, in a financial report prepared for councillors before Christmas, Mr Kelly noted that a “+£0.470m pressure is forecast in facilities management.
“This is due to the continued cost of running the old Shire Hall site. Most of the expenditure is for business rates and progress is being made to reduce this.”
The December meeting of the strategy and resources committee noted that the council had vacated the whole of the Shire Hall site.
The committee was told the project for apart-hotel complex had been “confronted by construction price inflation and challenges with yield rates”.
Mr Kelly offered to provide members “with a private briefing in the next few weeks as the project was at a sensitive stage”. That briefing occurred on January 13.
Liability for the old Shire Hall site would remain with the council until the end of the financial year, the committee was told.
“It was then queried what progress had been made to reduce the continued costs of running the old site,” records published minutes from that meeting.
“Officers were working with Cambridge City Council to investigate the possibility of an exemption or reduction in business rates for an empty property.
“It was noted that no assumption had been made for increased costs in the next financial year at this stage.”
Opposition leader Steve Count raised the Shire Hall issue during the open session of the strategy and resources committee today.
Making clear his discontent over what he was told and when about old Shire Hall sale is @stevecount at today’s @CambsCC strategy meeting. Full story via @CambsNewsOnline pic.twitter.com/vaOvsDPJ16
— John Elworthy (@johnelworthy) January 26, 2023
He said when he was briefed on the state of Shire Hall, the amount of money being spent on rates and upkeep pending completion of a lease was “unexpected and the implications of that had not been highlighted previously”.
He spoke of a “cloak and dagger” answer given to him when he pushed for a more detailed response.
In 2021 the council gave consent to officers to enter into formal contractual arrangements with Brookgate “thereby resulting in the disposal of the original Shire Hall building on a long lease for hotel use”.
It also provided for the redevelopment of the Octagon and Old Police House buildings as modern office accommodation.
