The Only Way
© Copyright 2011
Fact: Barnsley Council have purchased a millstone, Gateway Plaza, and paid £20M for it although this will exceed £25M if agency/consulltancy fees, stamp duty and fitting out are included. There is some doubt that it's worth more than £13M in the currently depressed business property environment. (Only the office space provides benefit and commercial buyers would not pay good money for 'no benefit assets'.) Irrespective of whether it is worth the money are the Council in touch with the real world? It amounts to gross insensitivity when massive job cuts are being inflicted on the work-force (reported to be 700 with a proportion of them enforced redundancies).
Is it affordable in the current economic climate? Labour have claimed it will save money from 2012 onwards but only £0.2M a year. It has been noted that an increased borrowing of £18.5M was included in the Treasury Management figures provided for the Cabinet Meeting of 23 March 2011. At 3% (today's commercial rates), interest will be going on for £0.55M per year. Presumably the difference between £25M and £18.5M has been footed from reserves. The loss of income on £7.5M at 2% interest will be £0.15M. This amounts to £0.7M per year and makes the savings look like a figment of imagination.
The savings are of course a complete fallacy anyway; because the current locations of Berneslai House is owned by the Council with only maintenance costs; Springfield House and Wellington House could probably be be obtained for £6 per square foot on long term lease in todays market, given half decent negotiating.This compares with the effective price paid of £15 per square foot for 15 years on Gateway Plaza. An absolutely top of the market price purchased at the bottom of the market in todays depressed economic climate.
Fact: Barnsley Council have hived off their Property Management Division to set-up a new company with Norfolk Property Services. Sharing any profits equally it charges the council £1M per year for its work. What constitutes profits has not been defined which does not build immense confidence.
They have also now been given the job of facilities management (looking after council buildings).. Whether this will apply to the refurbished Town Hall when it eventually becomes available is not yet clear because half of it will be an independently run museum.
What is going on! The same staff are being used to do the same job but we are now paying Norfolk Property Services to do it instead of paying direct. Are they adding a management fee? Does it cost more? The implication is that either Barnsley Council is incapable of running the buildings service effectively itself (if so it has been operating inefficiently for 70-80 years) or this is yet another back-room agenda that is not being made clear. It would be interesting to know what are the director's emoluments of Norfolk Property Services because some of the directors are councillors. The Freedom of Information Act does not enable us to obtain information from private companies.