Saturday, 16 June 2018

Knowle relocation project: "The true cost of relocation is almost certainly at least £20 million."

The final press release of the week from the District Council has its political leadership 'celebrating' at the site of their soon-to-be HQ on an industrial estate on the outskirts of Honiton:
15 June 2018 - Top hole East Devon! Council celebrates topping out ceremony at new purpose-built modern HQ - East Devon

Most of them probably won't be in power in twenty years time when the 'savings' which were promised will not in fact be realised:
Futures Forum: Knowle relocation project: "Hard to say how much it has cost so far, what the current projected cost is..." (February 2018)
Futures Forum: Knowle relocation project: latest FOI request on costs (November 2017)
Futures Forum: Knowle relocation project 2008: “We’ll be seriously looking at the future of us staying in this building for numerous reasons.” OR: "Given current market values and the likely cost of relocation, it would be a close run thing as to whether a move was viable.” (August 2017 - and 2008)
Futures Forum: Knowle relocation project: Cabinet to consider 'options' as costs spiral even further: part two >>> Weds 5th March (April 2017)
Futures Forum: Knowle relocation project: Cabinet to consider 'options' as costs spiral even further >>> Wednesday 5th March (March 2017)
Futures Forum: Knowle relocation project: What are the costs to date and what are the projected costs? (January 2017)
Futures Forum: Knowle relocation project: Cabinet meets Wednesday 14th December >>> "Members have previously agreed that they want to leave the Knowle site in a manner that is cost effective and does not add to the Council Tax bill of East Devon’s residents." (December 2016)
Futures Forum: Knowle relocation project: on being 'cost neutral' and 'fit for purpose' and asbestos free >>> comparing the Knowle and Exmouth Town Hall sites (December 2016)
Futures Forum: Knowle relocation project: of devolution and rising costs (December 2016)

etc, etc, etc...

In a brilliant analysis from today's East Devon Watch, these figures are picked over and not only found seriously wanting - but reveal how fundamentally skewed the whole 'relocation project' has been: 


16 JUN 2018

“Remaining at Knowle with essential and basic repairs undertaken would have cost the council £ 4.5m over 20 years. In contrast moving to the new HQ in Honiton will provide a cash saving of £ 1.4m over the same period. That’s a difference of £5.9m.’

The above quote is lifted from the EDDC web-site.

So even using their figures, it will take 20 years to recover half the cost of the new building. Only after 40 years will we get our money back.

So if we see a Devon unitary authority in the next 40 years we will lose money.

But, of course, it’s much worse, because the EDDC numbers assume that there will be no ‘essential and basic repairs’ to the new building over those 40 years. Impossible, of course.

Even worse, no-one wanted EDDC to remain in the whole of the Knowle building. Those opposed to the move recommended that EDDC retrench to the modern buildings that were built in the late 1970s and early 1980s. Half the size of the Knowle as it now stands. So, even using EDDC’s figures, half the size would mean half the ‘essential and basic repairs’, so only £2.25 million, and half the ‘cash saving’ of £1.4 million, so a trifling £700,000 over 20 years. Peanuts.

So even using EDDC’s own numbers, the new building cannot produce any savings for 80 years.

Even, even worse, EDDC has borrowed the money to build the new building. The cost of borrowing £11 million, the notional build cost of Blackdown House, is of the order of £400,000 per annum, dwarfing the expected savings.

Even, even, even worse, the costs of the new building do not include the fees charged by various advisers over many years, the cost of the move itself, compensation to staff forced to travel further, new equipment, officer and councillor time, and the cost in terms of disruption. Plus all the costs of disposing of the Knowle.

The true cost of relocation is almost certainly at least £20 million.

Even, even, even, even worse, those EDDC numbers do not take into account the ‘essential and basic’ repairs conducted at their new Exmouth office, which came in at a whopping £1.7 million. Nor the running costs of Exmouth, which will surely be at least £1.4 million over that 20 year period. Almost certainly much more: Exmouth is, of course, an old building from the 1920s, far older than the modern brick buildings at Knowle.

Blackdown House will be a tremendous drain upon the finances of EDDC from the day it opens, and the expected cost savings thereafter will be microscopic compared to the huge borrowing costs.

But the biggest problem of all is that EDDC’s own consultants informed them that the building constructed at a cost of £20 million would only have an open market value on its completion of £3 million. That included the value of the land on which it sits.

So, if Devon goes unitary any time in the next few years, we will have lost £17 million.

The only good news for residents of East Devon is that the whole of Devon will then have to pay the bill and the borrowing costs.

Sums on Knowle relocation not adding up for us, the taxpayers | East Devon Watch

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