Tuesday, 11 April 2017

Knowle relocation project: "there is a greater risk in standing still'

At last week's Cabinet, the political leadership at East Devon considered where to go next with its relocation project:
Futures Forum: Knowle relocation project: Cabinet to consider 'options' as costs spiral even further: part two >>> Weds 5th March

It seems to have been a foregone conclusion as to which option they were going to chose:
Futures Forum: Knowle relocation project: "District Council are being advised to go ahead with their relocation from Sidmouth, despite not having a buyer for their current Knowle HQ"

It's all a question of risk analysis:
Futures Forum: Knowle relocation project: selling, borrowing, speculating

Here is further analysis:

From the WMN:
'Go now' East Devon HQ relocation plan recommended as costs top £10m | Devon Live
East Devon HQ relocation 'is the best option for the council' | Devon Live

From Save Our Sidmouth:

More ineptitude by EDDC Cabinet as the relocation project limps on?

April 6, 2017 by sidmouthsid 2 Comments

Will Paul Diviani’s Cabinet* be shown to have chosen the worst option for taxpayers last night? Their recommendation to Full Council is to move to Honiton, despite having no Knowle sale agreed and with no guarantee of what price the current site will eventually fetch. This situation, and the obligation to now take out a loan, smacks of continued clumsy handling of the ‘ambition’ to relocate. Whether or not Pegasus Life has lost interest, any potential buyer of the Knowle, one of Sidmouth’s prime and prized sites, is set to drive a hard bargain.

As the Sidmouth Herald headlined last week, the figure for the famously declared “cost neutral” Council HQ move, has now topped £10,000,000. And not a brick for the Honiton newbuild has yet been laid ……

Related information at links below:




and on EDDC website:


*Current Cabinet membership, as listed on EDDC website:
Iain Chubb, Conservative
Paul Diviani, Conservative – Leader of the council
Jill Elson, Conservative
Andrew Moulding, Conservative – Deputy leader of the council
Geoff Pook, Independent
Philip Skinner, Conservative
Ian Thomas, Conservative
Phil Twiss, Conservative
Eileen Wragg, Liberal Democrats
Tom Wright, Conservative

Elizabeth Hunt
April 7, 2017 at 9:00 am

Makes my blood boil! When can we get rid of these councillors and this preposterous idea! Certainly, there are no benefits to Sidmouth except to those involved with the building on the land!

Paul F

April 7, 2017 at 12:45 pm

Ineptitude doesn’t come close. As someone with c. 20 years Project Management experience, much of it in the public sector, this is possibly the most shambolic public sector project I have ever come across, without a proper scope document, no formal business case, and no proper governance processes to ensure that changes to scope are managed properly or that the business case continues to hold water or that gateway reviews are conducted properly at major decision points (like the one just passed where a decision to commit to large expenditure was made).

Genuinely shocking ineptitude of the greatest order – or perhaps simply a deliberate decision to appear inept in order to pursue a vanity project which will cost us all a lot of money.

More ineptitude by EDDC Cabinet as the relocation project limps on? | Save Our Sidmouth

From the Herald:

Sale of Knowle set to be ‘uncoupled’ from EDDC’s £10million relocation

PUBLISHED: 06:30 10 April 2017 Stephen Sumner

EDDC's Knowle HQ. Ref shs 7705-15-12SH Picture: Simon Horn

Plans to ‘uncouple’ the district council’s £10million relocation project from the sale of its Knowle HQ have won the backing of cabinet bosses.

Sidmouth representatives slammed the ‘cavalier’ decision to borrow money to fund the move to Honiton and Exmouth – but East Devon District Council’s (EDDC) top officers said there is greater risk in standing still.

Cabinet members were given the options of borrowing cash to ‘go now’, waiting for the outcome of developer PegasusLife’s planning appeal after it offered £7.5million for Knowle, or staying put and modernising the former hotel or its offices, together with a refurbished Exmouth Town Hall.

Speaking at Wednesday’s meeting, Sidmouth councillor Cathy Gardner said: “If you commit to borrowing a large amount of money at taxpayers’ expense, you aren’t in control. You are in more control when you know the outcome of the planning appeal.

“These figures aren’t certain. These are just estimates based on assumptions.”

She questioned if the officers had costed staying at Knowle, selling off part of the site and marketing its Heathpark plot in Honiton to another developer.

Councillor Marianne Rixson, who also represents Sidmouth, said EDDC was taking a ‘cavalier approach’ to spending taxpayers’ money, adding: “Any future developer will know you are desperate and will not match the price offered by PegasusLife.”

EDDC originally promised the relocation would be ‘cost neutral’, it would not borrow money and the project would not progress before Knowle was sold.

But chief executive Mark Williams disagreed, saying the ‘go now’ option ‘derisks planning’, while delaying ‘increases risk’. He added “We have an asset [Knowle] that will appreciate in value.”

Officers said pressing ahead with the relocation to Honiton’s Heathpark and Exmouth Town Hall is the most cost-effective option and could make EDDC £1.4million better off over 20 years.

If it chooses to delay the project so planning permission for Knowle can be secured, it could be £400,000 better off than it is now.

In contrast, members were told if they chose the ‘go minimum’ option – giving up on the new-build Honiton HQ, completing the refurbishment of Exmouth Town Hall and modernising a section of Knowle for £11.3million or £5.9million – they would be £4.5million worse off. There is no capital receipt to fund the modernisation.

Cllr Tom Wright said: “There has been a lot of talk about uncertainty. This building is unfit for purpose. Moving is not a vanity project. It’s to improve what we can do. If we stay here, it’s money down the drain. This building is useless for the 21st Century. This land isn’t going to lose value.”

The ‘go now’ option won the support of cabinet members but is now set to be considered by a joint meeting of the overview, scrutiny and audit and governance committees on April 18.

It will then go before the full council.

Sale of Knowle set to be ‘uncoupled’ from EDDC’s £10million relocation - Breaking news & sport in Sidmouth | Sidmouth Herald

From East Devon Watch:


10 APR 2017


If/when it all goes pear-shaped, WE the council tax payers will not only foot the bill but see services cut – as interest payments on a loan will take precedence over services.

AND what happens when (as seems almost certain) “Greater Exeter” or Devon becomes a unitary authority? There will be no need for vanity project buildings which will be expensive white elephants as a glut of un-needed council properties hit the market.

Basically, EDDC is squandering OUR money. Disgraceful.

AND WHERE ARE THE INTERNAL AND EXTERNAL AUDITORS REPORTS ON THIS HIGH-RISK STRATEGY? Is EDDC ploughing ahead yet again with incomplete legal and financial information?

“Sale of Knowle set to be ‘uncoupled’ from EDDC’s £10million relocation” | East Devon Watch


10 APR 2017

So Mark Williams says that ‘We have an asset that will appreciate in value’.

First of all, it may not, but more importantly, the increasing value of the Knowle as an asset has always been excluded from EDDC’s calculations.

Finally, after seven or eight years, EDDC have recognised that the Knowle is a capital asset that is likely to increase in value.

Even when the figures were manipulated to show the move as ‘cost neutral’, that fa├žade was only maintained because the value of the Knowle (at least £7.5 million) was equated to the value of the new HQ at Honiton (valued by JLL at £2-3 million). Since then, of course, ‘cost neutral’ has gone out of the window.

So we now have the proceeds of sale = £7.5 million – possibly, assuming in these trying times a sale is even possible.

Cost of replacement buildings = £10 million (Honiton) + Exmouth £1.7 million + Manstone £1 million = £12.7 million.

Net loss £5.2 million.

Plus new road at Honiton = £225,000.

Plus admin costs to date = £2 million.

Plus costs of moving = say £3 million. (New equipment, staff compensation, etc.

Plus loss of asset value = £7.5 million – £2.5 million = £5 million.

Total loss is now in this scenario about £15.5 million.

This is all to achieve gains in running costs. However, estimates for Manstone were never included. The cost of running three HQs rather than one will be higher because of increased travelling, and commuting between sites.

Were Option 3 to be pursued, and the modern buildings improved at a cost of £1 million to £1.5 million, then the ‘new’ Knowle would be a very cheaply run building.

The £2 million already spent on admin cannot be recovered, so that is a sunk cost.

So pursuing Option 3 would cost £12 million less, and almost certainly reduce running costs. And leave EDDC with a far nicer building than a cheap and uninspiring shed of offices on an industrial estate at Honiton.

The above assumes that EDDC’s numbers are correct, but we all know that the cost of relocating will rise as the scheme is pursued, and we no longer have the guarantee of Pegasus money coming through. Plus, of course, EDDC may feel the need to employ even more consultants!

So, we will not see any change out of £20 million. And there will be no savings as to running costs compared to Option 3.

All this at a time of local government reorganisation.

Real numbers: not EDDC’s strongest point …

Relocation: the sums just don’t add up | East Devon Watch

And finally:


10 APR 2017

The number of employees at EDDC continues to rise – up by 8 between September and December 2016. As these are full-time equivalent jobs, the cost of those extra 8 staff will likely be around £300,000 per annum.

Mysteriously, the employee statistics, which are normally published monthly, are now three months out of date …

No staff austerity cuts for EDDC – on the contrary! | East Devon Watch

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