Tuesday, 15 January 2019

Knowle relocation project: financial profligacy in a time of austerity

It seems that more and more people are questioning the cost-effectiveness, if not profligacy, over the extravagant move of the District Council from Sidmouth to Honiton:
Futures Forum: Knowle relocation project: fantasy 'cost savings over twenty years' are of no interest to people in East Devon

Especially in these difficult financial times:
Futures Forum: District and County Council announce spending plans in a new year of austerity for local government

Here is one estimate of the amount of money being spent on the relocation project:

= £10.5 million (+ new road) for the Honiton HQ + £1.5 million for refurbishment of the Exmouth Town Hall 
= £12 million

= £7.5 m for Knowle from PegasusLife

= £4.5 m to be financed by borrowing

This is when East Devon District Council’s new Honiton HQ will be ‘open for business’ | Honiton, Axminster and Seaton news - Midweek Herald
Futures Forum: Knowle relocation project: ready to move, but at what cost...

And here are other estimates :
Futures Forum: Knowle relocation project: "The true cost of relocation is almost certainly at least £20 million."

Futures Forum: Knowle relocation project: Freedom of Information requests > and questions of money, process and viability

A report was sent to central government last year:
Futures Forum: Knowle relocation project: ready to move, but at what cost...

Here is the opening section:


EDDC has chosen to divert funds it does not have to the building of new headquarters – as indeed have other councils, to their cost. As such, EDDC’s commitment to spending well over £10million can only be described “as a ‘milestone’ for debt – taken on by council tax payers in East Devon. No matter how you spin this project, it is not residents who will benefit. And few if any of the councillors making these decisions will be around in 20 years when the true costs and ‘savings’ are known.”

There has been a huge lack of confidence in these figures throughout the project.14 The campaign group Save Our Sidmouth has opposed the move, believing “that EDDC has not done its sums correctly, has not properly assessed the cost of renovations to part of the existing Knowle buildings and that the risk in building a new office – borrowing up to £4.8 m and paying for the ‘savings’ over a 20 year period – is far too risky in the current economic climate”. 

From the beginning of its relocation project, EDDC claimed it would be ‘cost neutral’ – but after vacillating between the options over several years, the costs have now escalated. And yet these principal reasons for relocation have been proven time and again to be totally spurious, if not hopelessly under-estimated. Borrowing: EDDC is taking out substantial loans to finance this project: at its own admission “the 2016/17 borrowing requirement is made up as follows: £5,990,000 Office Relocation” – although these figures seem to change as and when. 

EDDC continues to promote the notion that its ‘Worksmart’ project “is set to save the Council £6m over the next 20 years”. And yet the figures for staff numbers subsequent to the move continue to be unclear, casting doubt on these “savings” – with EDDC refusing to provide full details of their ‘hot-desking’ arrangements. 

Energy use: 
As for their initial promises of large energy savings, EDDC claim they will save £5.55m over 20 years by moving from Knowle; again, these figures have been proven to be wildly inaccurate and so extremely contentious. Moreover, EDDC has refused to provide detailed energy figures to verify their cost calculations; they will not countenance considering alternative costings, such as remaining at Knowle; and they have ignored their own scrutiny committee’s instruction to allow the commissioning of an independent survey on the state of Knowle. 

Asset value: 
EDDC has just sold Knowle site for £7.5million, a sale which had by no means been guaranteed. They will be spending the same amount to build new headquarters at the Heathpark industrial estate in Honiton – at a site which had been earlier rejected by buyers for £3million. EDDC admit that the value of the new Honiton building is far less than the cost of construction.

Knowle relocation project: a summary of the issues - Vision Group for Sidmouth

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