Knowle relocation project: buildings about to bite the dust

How 'green' is the District Council's new build  HQ in Honiton?
Futures Forum: Green buildings in East Devon

Not as green as the old build HQ in Sidmouth:
Futures Forum: "A truly green alternative to EDDC's proposal"
Futures Forum: Knowle relocation project: saving energy costs - and challenging the justification to move

How much in danger is the new HQ?
Futures Forum: Knowle relocation project: how vulnerable is Honiton HQ builder? >>> Interserve goes into administration

Not much, according to the District Council: 

Interserve collapse 'will have no impact' on new council HQ

Interserve Construction Ltd were the contractor that East Devon District Council had used to build their new HQ in Honiton

East Devon District Council say the collapse of Interserve should not impact on their new Blackdown House HQ.

Interserve - one of the UK's largest providers of public services – went into administration last week after shareholders rejected a rescue deal for the company, which has 45,000 UK staff, and 68,000 globally. Interserve Construction Ltd were the contractor that East Devon District Council had used to build their new HQ in Honiton, which opened last month, but they have not ‘gone under’.

A council spokesman said that as a result, their contractors remain on site to work through the list of remedial works that need to be carried out on the £8.7m new building.

An East Devon District Council spokesman added: “We have kept a close eye on Interserve’s fortunes and we were sorry to hear that Interserve PLC has gone into administration. However, Interserve Construction Ltd did not go under and therefore the contractor can continue.

“East Devon took possession of its new headquarters Blackdown House in January 2019 and the building is operating well and at capacity since staff moved over fully in February. As with most new buildings it is generally the case that there is a list of remedial works to carry out and Interserve’s contractors are on site and working through the list. The council is monitoring these works closely, but for the moment we are on track with Interserve to finish off the list and meanwhile our new HQ is working well and fully open for business.”

The new Honiton Blackdown House HQ replaced the council’s former HQ at The Knowle in Sidmouth, while one third of the council staff are to be based at Exmouth town hall.

Shareholders of Interserve Plc on Friday voted 59.38 per cent against a rescue plan to address their mounting debt pile. The plan would have seen their stake reduced to just five per cent with lenders being handed the lion's share of the business.

However following the plan being rejected, Interserve said that in the absence of any viable alternative rescue plan it would formally apply to the High Court to go into administration. Administrators EY have been appointed under a so-called pre-pack administration, an insolvency procedure in which a company arranges to move its assets to a another owner before administrators are officially appointed.

Interserve collapse 'will have no impact' on new council HQ - Devon Live

Next week should see the Knowle given over to PegasusLife - who will then begin demolition:
East Devon officially opens new council HQ as they hope to hand over Knowle to developers by end of March
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Knowle relocation project: how vulnerable is Honiton HQ builder? >>> Interserve goes into administration

Last week we were being warned that Interserve was about to go bust:
Futures Forum: Knowle relocation project: how vulnerable is Honiton HQ builder? >>> "Interserve is likely to go into administration"

It just has:
Interserve shareholders vote against rescue deal | Reuters
Timeline: Interserve's path to administration | News | Construction News

However, it's still going to carry on - for the moment:

The company and the Cabinet Office, which oversees state suppliers, said there would be no disruption to the public services that Interserve manages and job losses were not expected in the short term and the pension scheme was protected.

Interserve’s chief executive, Debbie White, said: “Interserve is fundamentally a strong business and with a competitive financial platform in place we see significant opportunities as a best-in-class partner to the public and private sector.”

But the failure of another outsourcing firm, little more than a year after Carillion’s collapse, sparked fresh calls by trade unions and Labour’s business select committee chair Rachel Reeves for public services to be taken back in-house.

Interserve goes into administration after rescue deal rejected | Business | The Guardian

Now its competitors are looking to pick up some of the pieces:

Interserve’s uncertainty continued over the weekend as rivals expressed an interest in buying the most profitable part of its business.

It is understood fellow outsourcer Mitie contacted Interserve’s administrator EY over the weekend, as well as a consortium of banks and hedge funds which now own the firm, about buying its support services arm.

Another source said rival Serco was also considering a bid. Chief executive Rupert Soames is understood to be “watchful and interested” in the support services business in the interests of maintaining public services.

It is unclear how the Cabinet Office, which manages the outsourcing of public services, would view a rival taking over the business.

Rival outsourcers could buy out Interserve (IRV) support services business as Mitie (MTO) makes inquiries | City A.M.

The question for East Devon is what guarantees the builder of the new HQ in Honiton gave - as posed by the East Devon Watch blog:
Better hope new EDDC HQ is in good nick … | East Devon Watch
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Knowle relocation project: how vulnerable is Honiton HQ builder? >>> "Interserve is likely to go into administration"

We might never know how much the new District Council HQ cost:
Futures Forum: Knowle relocation project: District Council rejects motion "for the ongoing costs to be published to show confidence that this project will breakeven"

There are all sorts of unofficial figures out there:
Futures Forum: Knowle relocation project: or, how a new HQ costing £8.7m is valued at £3.5m
Futures Forum: Knowle relocation project >>> >>> a spanking new HQ for £5.6 million... or for £10.6 million?

We do know that the builders of the new HQ are facing considerable difficulties:
Futures Forum: Knowle relocation project: how vulnerable is Honiton HQ builder? >>> and how 'financially stable'?

And it seems that they are reaching the end of the road - and as suggested by the East Devon Watch blog, this might pose problems for the District Council should anything further need doing to their new HQ: 

BETTER HOPE NEW EEDC HQ IS IN GOOD NICK …

10 MAR 2019

… as its builder is on the ropes and 45,000+ people could lose jobs. Unless we, the taxpayers, pick up the bill – again.

Better hope new EEDC HQ is in good nick … | East Devon Watch

Here's the full report from the BBC: 

Government outsourcing firm Interserve faces administration

Simon Jack

Business editor

10 March 2019

Interserve is likely to go into administration on Friday.

Directors of the company, that employs 45,000 people in the UK, have told the BBC the firm has "a mountain to climb" to prevent it collapsing under the weight of its nearly £650m in debt.

A plan to swap the majority of that debt for new shares requires the support of more than 50% of the shareholders and the company's biggest shareholder - US hedge fund Coltrane which owns 27% - is currently dead set against the plan. Since many small shareholders don't vote - even in a crisis like this - the support of Coltrane is seen as crucial in getting the deal through. The board's plan would see current shareholders awarded 5% of the company - with the rest going to the creditors.

It is tempting to see Interserve as the next Carillion. An-overly indebted private provider of public services going to the wall after years of suicide bidding to win government contracts at the same time as paying out big salaries and dividends. While there are similarities, there are important differences.

Piece-meal sale?

If the company collapses on Friday - this is what will happen.

Accountants EY will be appointed administrators, they will then sell the company for a nominal amount to the current lenders (a mixture of banks and bond holders) who will own 100% of the new company.

The board then expects those lenders to sell the business units off piece-meal. The board does not expect any interruption to the company's underlying contracts or any immediate job losses.

The real impact will be on the debate over the appropriateness of using big private sector contractors to carry out essential public service work.

Game of chicken?

The government has been monitoring the Interserve situation closely and while it has felt unable to award a company close to collapse much new work, the Cabinet Office and the Department for Business Energy and Industrial Strategy are comfortable services won't be interrupted.

In fact, Interserve - minus its crippling debts - will arguably be in one of the strongest financial positions of any outsourcer.

There may yet be a last-minute deal to save the company. It is after all a curious game of chicken. If Coltrane insists on blocking the deal - it will get zero rather than the teaspoon of value its being offered under the board's plan.

The biggest loser - apart from the shareholders - will be the reputation of an outsourcing business model that will doubtless once again become a political football.

Government outsourcing firm Interserve faces administration - BBC News
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Knowle relocation project: or, how a new HQ costing £8.7m is valued at £3.5m

The District Council has helpfully said it will keep everyone up to date about the costs of the move from Knowle - plus the ongoing costs of the new HQ in Honiton: 

We will be bringing a report to Cabinet to inform members of the final costs of the relocation project. This report will remind members of the regular reporting that will take place as a result of our normal procedures and members can then debate what extra reporting requirements may be appropriate.

Futures Forum: District Council rejects considering motions > full council meeting Wednesday 27th February

However, that was instead of giving the sort of answer which would have given a more full picture of the costs:
Futures Forum: Knowle relocation project: District Council rejects motion "for the ongoing costs to be published to show confidence that this project will breakeven"

And those costs are very much open to debate - still:
Futures Forum: Knowle relocation project: challenging the official line that "staying in Sidmouth was not an option"
Futures Forum: Knowle relocation project: financial profligacy in a time of austerity
Futures Forum: Knowle relocation project: fantasy 'cost savings over twenty years' are of no interest to people in East Devon

Here's a summary:
Futures Forum: Knowle relocation project: a summary of the issues

And a summary of the summary:
Futures Forum: Knowle relocation project: ready to move, but at what cost...

A photo-op with the official opening of the spanking new HQ in Honiton made much of the planting of a 'time capsule' - although the BBC added a few helpful figures as a reminder of the cost of the project: 

Old East Devon council HQ to be handed over to developers

12:28

Daniel Clark
Local Democracy Reporting Service


East Devon District Council hopes to be able to hand over its former Knowle headquarters in Sidmouth to developers by the end of March.

Its new Heathpark headquarters in Honiton opened for business on 11 February but was officially opened in a ceremony last Wednesday.

Children and teachers from two Honiton schools attended and lowered two time capsules into the ground containing a selection of objects chosen by the children - including local newspapers and magazines - to show today's fashions, future predictions, and information about rural village life in East Devon.

The new headquarters cost the council £8.7m, while an additional £1.5m was spent on upgrading Exmouth Town Hall - where one third of the council staff are to be based.

The Knowle has been sold to developers Pegasus Life for £7.5m, which has been granted planning permission to convert the building into a 113-apartment assisted-living community for older people.

Richard Cohen, the deputy chief executive of East Devon District Council, said: "We hope to be out by the end of March, subject to the clearance process we are under taking at the moment."

BBC Devon & Cornwall Live: Breaking news and local stories - BBC News

The East Devon Watch blog notes: 

EDDC HQ MOVE COST NEUTRAL? DON’T MAKE OWL LAUGH!

4 MAR 2019

It has been estimated by a local property developer that the new HQ has a market value of no more than £3.5 million.

EDDC HQ move cost neutral? Don’t make Owl laugh! | East Devon Watch
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Knowle relocation project: How do you get to the District Council's new HQ in Honiton for any evening meetings from Exmouth, Axminster, Seaton or Colyton?

The new District Council HQ is on the edge of Honiton's industrial estate:
5 February 2019 - East Devon District Council taking up residence at its new Honiton HQ - East Devon

Which might be better than where it was originally planned for:
Futures Forum: Knowle relocation project: "East Devon District Council has ditched its plan to move to Skypark near to Exeter airport from its current headquarters in Knowle in Sidmouth."

The problem with Honiton is that it is actually not at all 'central' to the District:

It has been pointed out more than once, that it's about what serves the population of the District best:

“Centrality” was one of the original reasons for relocating to Honiton, even though Honiton is further from the average East Devon resident than Sidmouth.
R J Thurlow, Chair, Save our Sidmouth
Knowle relocation “far too risky in the current economic climate” . | Save Our Sidmouth

"SIR – When promoting the move from Sidmouth to Honiton, East Devon District Council (EDDC) argues that Sidmouth is inconvenient for many people in East Devon while Honiton is much more central. Let me explode that myth...
The District’s populations are clustered around the coast. I looked at the numbers of people living in each East Devon ward and calculated the distance and travel time from each ward to Sidmouth or Honiton (using a TomTom SatNav to give shortest route and time for that route).
On average, an East Devon resident might travel 9 miles to Sidmouth or 11.1 miles to Honiton. So an EDDC move to Honiton would add 19% to the typical journey. The time taken for travel averages 26.5 minutes to Sidmouth or 29.6 minutes to Honiton – a 10% increase if EDDC moves."
Robin Fuller, Sidmouth
Home - Sidmouth Herald
Exploding some myths re. Knowle relocation. | Save Our Sidmouth
Futures Forum: Knowle relocation project: comparing the Sidmouth and Honiton/Exmouth options

Futures Forum: Knowle relocation project: and the politics of maps ..... "What I have found most difficult to understand is why EDDC ever decided to base itself in Sidmouth where over 50 per cent of the area covered by a 20 mile diameter is in the English Channel."

Moving as far away as possible from the hoi poloi is possibly the point:

One has to wonder why the leadership at East Devon seems so desperate to leave Sidmouth.
Is it because of the constant thorn in their side - represented by the 'serial critics' of the Sid Vale?
The Leader of the District Council certainly seems irked by the volume coming from objectors:
Futures Forum: Knowle relocation project: the letters of objection

Futures Forum: "Who will rid me of this turbulent Sidmouth?!" ... or ... moving your capital and " running away from the issues"

And so it is, as reported today in the East Devon Watch blog:

TREK TO NEW EDDC HQ IN THE EVENING IF YOU WANT TO BE A COUNCILLOR …

28 FEB 2019

Just one small point. If you don’t have a car and no buses are running in the early or late evening (as happens now) how do you get to Blackout House (sic) for this meeting (or any other meeting for that matter) from Exmouth, Axminster, Seaton, Colyton or any outlying villages? Only Cranbrook and Sidmouth are served by late (after 5 pm) direct buses, and a train journey would be horrendously expensive.

Trek to new EDDC HQ in the evening if you want to be a councillor … | East Devon Watch
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District Council's £20m investment fund: "Property investment brings with it the potential for significant risk if things go wrong."

Councils across the land are playing the property market:
Futures Forum: The public service gamble: Councils borrowing billions to play the property market

Including East Devon:
Futures Forum: District Council local housing company >>> "the ‘huge risk’ in speculating on the property market"

As the East Devon Watch blog notes, on the one hand, the District Council is proposing risking 'investing' millions in property - just having 'invested' millions in a new HQ: 

OH NOOOOOO…..”£20M INVESTMENT FUND TO BE SET UP SO EAST DEVON CAN BUY PROPERTY AND RAISE CASH TO BALANCE BUDGET”

Owl says: THAT COST-NEUTRAL MOVE TO HONITON SEEMS TO HAVE COST AN AWFUL LOT!

Owl can see it now …. and it isn’t nice …

Oh noooooo…..”£20m investment fund to be set up so East Devon can buy property and raise cash to balance budget” | East Devon Watch

Here's the full piece from Devon Live - and note the video at the top of the piece showcasing the £10m new-build: 

£20m investment fund to be set up so East Devon can buy property and raise cash to balance budget

The ‘low risk’ strategy, which would see some of the investments made within East Devon, is one of the ways in which the council is preparing to plug the expected £2m funding gap in its 2020/21 budget.

Daniel Clark Local Democracy Reporter
17:40, 8 FEB 2019

CLICK TO PLAY
LOOK AROUND EAST DEVON DISTRICT COUNCIL'S NEW HQ

East Devon District Council is set to join the growing number of councils who are investing in property to help balance its budget.

The cabinet have recommended to full council that up to £20m be allocated to an investment fund, either from existing resources or funding from the Public Works Loan Board.

The money would then be drawn down and invested as and when required and would be expected to give the council a net return of £450,000 a year.

The ‘low risk’ strategy, which would see some of the investments made within East Devon, is one of the ways in which the council is preparing to plug the expected £2m funding gap in its 2020/21 budget.

The new East Devon District Council offices in Honiton

Any decision on investment of more than £5m would have to be made by the council, but delegated authority to the Deputy Chief Executive in consultation with Leader, Portfolio Holder for Asset Management, Portfolio Holder for Finance and Portfolio Holder for Economy would be given for anything less than that.

Tim Child, Senior Manager – Property & Estates, told the cabinet on Wednesday night that the Commercial Investment Framework was a strategy to help deliver income that would be gleaned from land and property and that the overview committee had supported the principle of it.

He added: “This is a method tried and tested by other authorities. Some have done this and others are trialling it. The model we are set to go with reflects the low risk appetite for East Devon and some of the investments will be within East Devon.”

Chief Executive Mark Williams added: “As the new council prepares for the 2020/21 budget and the £2m funding gap and a 13 per cent reduction in our budget, we will have to do something and a lot of engagement with the public around it. As part of that engagement, I dare say public will say what are you doing to protect the services, and one of those things is to engage in low risk activity to try and generate some income by investing in property.”

Cllr Philip Skinner, portfolio holder for the economy, said that he was very supportive of the idea and was the kind of work the council needed to do. He said: “I look at Torbay, and they are known as a basket case, but they have put together a fantastic financial team and have made some phenomenal investments up and down the country.

“They are doing a really good job, and want to make investments in our patch, so we need to make sure we get there first, as there is a speed that you need to move at in the commercial world as good deals don’t last long as other people recognise that there are good deals.

“We need to make these investments to ensure we can find a way to cover the funding gap we will be facing. We need to wake up and smell the coffee on this. I am very supportive of this and this is the kind of work we need to be doing.”

Among the investments Torbay Council has made includes purchasing a bakery in Bodmin from Proper Cornish Ltd for £3m, with a council spokesperson saying that investment in properties from Cornwall to Kent will raise an estimated £2.8m and that they need to generate more income to fund local services due to budget cuts.

Cllr Mike Allen added: “This strategy is very important. The amounts are small compared to other authorities who are borrowing up to £100m, but this is a prudent way of filling the black hole gap we have in the revenue income.”

Leader of the council, Cllr Ian Thomas, added that the council was taking a very professional approach to an area that they historically haven’t covered very well.

Concerns though about the strategy were raised by Cllr Roger Giles, who said that he would have thought that people generally would want the council to borrow money to provide services for residents and to borrow to provide additional housing for the less well-off residents.

He said that property investment brings with it the potential for significant risk if things go wrong and there were concerns about the public perception of making these investments, particularly if they are outside of East Devon.

Full council will make a final decision on whether to approve the Commercial Investment Framework at its meeting on February 27, where it will also finalise the budget for the 2019/20 financial year.

East Devon District Council's current HQ at the Knowle (Image: Daniel Clark)

The cabinet agreed with the overview and scrutiny recommendation hat there should be a Council Tax increase of £5 a year made on an Band D council tax property, taking the meaning the average tax payer will be charged £141.78 a year for 2019/20.

They also agreed to recommend that a vacant post within the Economy Portfolio at a cost of £25,000 be reinstated. The deletion of this vacant post in the draft budget was agreed by the Strategic Management Team as a saving in line with Transformation Strategy “Fit for Purpose” imperative as they believed the saving could be made through efficiencies and would not impact the service, but the cabinet disagreed and said that it would help free up the economy and planning teams from their current pressures.

£20m investment fund to be set up so East Devon can buy property and raise cash to balance budget - Devon Live
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Knowle relocation project: challenging the official line that "staying in Sidmouth was not an option"

The Herald carries the headline of the cost of the District Council's new HQ in Honiton - and yet this was only half of the actual cost of relocation:
Futures Forum: Knowle relocation project > a spanking new HQ for £5.6 million... or for £10.6 million?

Devon Live and the Express & Echo reiterate the District Council's line that 'there was no alternative' to moving from Knowle - and yet analysis proves otherwise:

FINANCIAL PROFLIGACY 

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. 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”. 

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. 

Over-development: It was rather different in the 1960s, when the District Council sought a more modest proposal in purchasing the Knowle hotel: “It is the intention that part of the building should be used for housing (the major part of the purchase price is for this purpose) and the remainder for improved council accommodation...” However, today, EDDC refuses to consider alternative options to relocation. 

In fact, it has been proven that its declared wish to reduce its office-space could easily be accommodated if it retrenched to the purpose-built 1970s offices, thereby leaving a saleable asset in the original Knowle (once again suitable for conversion back to flats) to cover their refurbishment costs.

Conflicts of interest: Perhaps the most serious charge, however, is that EDDC will profit directly from its granting of any planning applications at Knowle. Furthermore, EDDC has a clear incentive to flout its own Local Plan’s demands for affordable housing provision: analysis of ‘alternative schemes’ for Knowle shows that there would be a substantial difference in value of the site – of between £3.2 and £6.8 million – depending on the affordable housing requirement.

EAST-DEVON-DISTRICT-COUNCIL’S-“RELOCATION-PROJECT”-STATEMENT-OF-OBJECTION-16-July-2018.pdf

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

Here is the official guide to the relocation project:

First look around inside new East Devon District Council offices

Staying at their current headquarters in Knowle was 'not an option'

COMMENTS

Daniel Clark
Local Democracy Reporter
25 JAN 2019

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CLICK TO PLAY
FIRST LOOK AROUND EAST DEVON DISTRICT COUNCIL'S NEW HQ

East Devon District Council’s new headquarters at Blackdown House in Honiton will be open for business of Monday, February 11 - and this is what it looks like.

The new HQ, which replaces the council’s existing HQ at The Knowle in Sidmouth, has cost the council £8.7m, while an additional £1.5m was spent on upgrading Exmouth town hall where one third of the council staff are to be based.

The controversial decision to relocate offices was taken back in March 2015 as it was decided the council needed to relocate into buildings that are affordable, cost efficient, and would significantly reduce the overheads of the council.

The new HQ is less than half the floor space used by the Knowle, office space is more efficient, and a new council chamber will have improved audio/visual equipment for councillors and the public.



The new East Devon District Council offices in Honiton

Savings of £1.4m over 20 years will be generated by the relocation, while from day 1, energy costs to the council will halve.

The council added that staying in Sidmouth was ‘not an option’, as the maintenance bill to bring the Knowle officers into good repair was £4.5m and they would still have been faced with much higher energy bills than the council needed to pay, even after replacing the boilers, rewiring, and a new roof.

A council spokesman added: “The Sidmouth offices, as well as being outdated and expensive to run, are too large. We need much less space and an old Victorian hotel with extensions was no longer fit for purpose nor affordable.



The new East Devon District Council offices in Honiton

“Our new HQ at Blackdown House will provide face-to-face services to our residents and both buildings (as well as Exmouth town hall) will have a bright and welcoming reception area to meet customers and clients. There are self-service computer facilities and interview spaces as well as that are vastly superior to what we are able to offer at Sidmouth.
“Honiton as a site for our new HQ is much more central to East Devon than Sidmouth, and while we are working to encourage people to use our online services more, if they want to visit our offices or attend council meetings, then Honiton is a central location and the facilities of the building are very accessible.”



The new East Devon District Council offices in Honiton

In a phased approach, staff will be leaving the existing offices at the Knowle over the next two weeks. The Sidmouth offices will close at 5pm on Friday, February 8, and Blackdown House will be open for business on Monday, February 11, at 8.30am.

Richard Cohen, deputy chief executive, said: “We have been waiting for years for this to happen and the staff are looking forward to it and it is the work of a 21 century council.”



The new East Devon District Council offices in Honiton

KEY FACTS

• 97,000 bricks were used on the project
• 600 people worked on site
• The building is roughly 17m tall and the total floor area is 2,760m2
• 216 shared desks including reception desks and booths are provided
• The council chamber has 69 public seats with a further 40 seats available in a public gallery overlooking the chamber, and with a hearing loop provided
• 130 car parking spaces, seven of which are disabled, and there are two electric vehicle charging points
• Renewable energy generation with 112 phot voltaic panels on the south facing roof slope, with an anticipated yield of 32,000 kWa pa.
• Constant lux levels will be provided in the offices by a smart and intelligent lightings system that reacts to levels of natural light in the offices and either dims or brightens the light

The new East Devon District Council offices in Honiton

The Knowle has been sold to Pegasus Life Ltd for £7.5m, and they have been granted planning permission to convert the building into a 113-apartment assisted-living community for older people.

First look around inside new East Devon District Council offices - Devon Live
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Knowle relocation project >>> >>> a spanking new HQ for £5.6 million... or for £10.6 million?

There has been a certain amount of anger expressed about the spending by the District Council on a spanking new HQ whilst the rest of us have to make do:
Futures Forum: Knowle relocation project: financial profligacy in a time of austerity
Futures Forum: District and County Council announce spending plans in a new year of austerity for local government

It's all been about the money - but whose figures do you take?
Futures Forum: Knowle relocation project: fantasy 'cost savings over twenty years' are of no interest to people in East Devon

The District Council has itself owned up to spending £10.6 million, as given in its own handy guide: 

Moving and Improving: all you need to know about the office relocation

Knowle’s sale and ultimate redevelopment will still take place in the future and the capital receipt will then be secured to largely fund the relocation which will cost £10,361,000 in total.

The council will also consider investing in a more direct approach to the entrance to the new Honiton HQ by building an access road along the side of the existing East Devon Business Centre. At a cost of £225,000 this would simplify the route from the main road to the council’s offices for visitors and staff alike. 

Moving and Improving: all you need to know about the office relocation - East Devon

In which case, the headline in the Herald is highly misleading:

PHOTOS: First look inside district council’s new £5.6million Honiton HQ

PUBLISHED: 13:03 27 January 2019

Callum Lawton

The interior of Blackdown House, EDDC's new Honiton HQ. Picture: Callum Lawton

These images show the final touches being made to East Devon District Council’s Honiton-based HQ.

The £5.6million building, called Blackdown House, will officially open next month, becoming the permanent workplace for hundreds of district council employees. In a phased approach, staff from the council’s Knowle offices in Sidmouth have started filtering into the new HQ.

The opening concludes a building project spanning almost two years. Work officially started on Blackdown House in July 2017.

With less than half the floor space of Knowle, the new HQ will feature shared desks, meeting rooms and a new council chamber with improved audio and visual equipment for both councillors and the public.

Councillor Mike Allen, who represents Honiton St Michael’s on the district council, said: “This is bringing hundreds of jobs to Honiton and is one of the most eco-buildings we could construct. It has PV panels to generate electricity and special insulation to cut heating costs.

“We recycled the concrete which was onsite to build into the fabric, there are two charging points for electric vehicles and cabling for more. There is plenty of room for the public to see our committees at work and I hope lots of people will speak at or watch our very lively debates about services we provide.”

The HQ’s new council chamber seats 60 members and 69 members of the public, with a further 40 seats available in a second floor gallery overlooking it.

A spokeswoman for EDDC said: “The design, build, fit-out and relocation costs is £8.7million, which will be recovered in the sale monies for our Sidmouth site and saving in running costs into the future.”

Knowle, which will officially close its doors on Feburary 8, is being transformed into 133-home retirement community.

The deal is worth £7.5million to East Devon District Council (EDDC), which has put the cash towards its £10million relocation from Knowle to Exmouth Town Hall and its purpose-built HQ in Honiton.

The decision came after developer PegasusLife appealed EDDC’s refusal of planning permission in December 2016 and a public inquiry in November 2017. Government-appointed planning inspector Michael Boniface approved the scheme after rejecting EDDC’s arguments.

PHOTOS: First look inside district council’s new £5.6million Honiton HQ | Honiton, Axminster and Seaton news - Midweek Herald
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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:

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

Income:
= £7.5 m for Knowle from PegasusLife

Deficit:
= £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:

FINANCIAL PROFLIGACY 

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”. 

Cost-neutral: 
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. 

Staffing: 
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.

EAST-DEVON-DISTRICT-COUNCIL’S-“RELOCATION-PROJECT”-STATEMENT-OF-OBJECTION-16-July-2018.pdf
Knowle relocation project: a summary of the issues - Vision Group for Sidmouth.
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Knowle relocation project: fantasy 'cost savings over twenty years' are of no interest to people in East Devon

The District Council has been getting rid of the old stuff at Knowle:
Futures Forum: Knowle relocation project: selling off council furniture and chattels to councillors

As it's off to a new place in Honiton:
Futures Forum: Knowle relocation project: moving to Honiton...

The problem is that it's all costing rather a lot of money - however you frame it:
Futures Forum: Knowle relocation project: ready to move, but at what cost...
Futures Forum: Knowle relocation project: "The true cost of relocation is almost certainly at least £20 million."

And people have noticed - as pointed out earlier today by the East Devon Watch blog: 

EDDC NEW HQ: TAKE PICS, POST AND BOAST ON SOCIAL MEDIA AND ….

On 10 January 2019 EDDC posted pictures of its glam new shiny HQ building in Honiton



Unfortunately, they didn’t think it through and here are a few comments on that post...

EDDC new HQ: take pics, post and boast on social media and …. | East Devon Watch

Here is that posting on the District Council's Facebook pages - together with all the comments which came flooding:

East Devon District Council added 4 new photos.

10 January at 08:37 · 

Here's a few photos of the inside of our new headquarters in Honiton which is quickly taking shape in readiness for staff to move in shortly. The building will be open to the public by mid-February.

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James Beverley, Karen Hayes, Paula Parker and 34 others like this.

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East Devon District Council Looking at your posts, we need to emphasise that our relocation to Honiton will save East Devon District Council tax payers £1.4 million over 20 years compared with the current costs. To remain at the council’s old headquarters in Sidmouth and carry out essential repairs would cost an additional £4.5 million over 20 years compared with the current costs.

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Laura Corser East Devon District Council but families that are having to use food banks and can’t afford to heat their homes or pay their council tax bills and are getting court summons etc, did not need to see these pictures! Very poor acknowledgement on what people of east Devon are really interested in. I can assure you, it is not the look of your new building!!

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Peter Bending And how much would the repairs to Knowle have cost?

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Brian Cann Laura Corser spot on!!!!!

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Nicholas Thornton East Devon District Council that doesn't answer to the reason behind the extravagant interior, which I'm sure could have been fitted at a fraction of what this was. It seems to me that your main concern is not for the needs of the people, who you extract money from, but for your over indulgent selves.

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Kay Bee East Devon District Council Could you please show us how these amounts were calculated?

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Andy Rook Peter Bending £4.5m over 20 years if you bother to read EDDC response.

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Brian Cann East Devon District Council the self indulgence which obviously was the reason for posting these pictures, is really quite disgusting, and all the gobbledygook about costs over 20 years, who gives a damm about that, what about addressing the lack of council housing, the amount of people forced to use food banks, and the amount of people receiving court summonses because they can’t pay your thieving council tax, but I suppose we can all hope that now your saving all this money with your move to Honiton, ‘and saving tax payers £1.4m’, we will see a reduction in our council tax bills, but I doubt it very much!!!!!!! Pathetic, overpaid, self indulgent group of out of touch individuals!!!!!

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Brian Cann Nicholas Thornton he won’t answer that Nick Thornton!!!!!!

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Brian Cann Utter bullshit!!!!!!!!!!

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Margaret Jury A pity that some of your housing tenants are living in damp-ridden conditions affecting their health and at of their young families as demonstrated on BBC Spotlight this evening - action needed now,not in a couple of weeks or longer!!

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Brian Cann Margaret Jury will have to wait twenty years no doubt!!!!!!!!!!!

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Ian Woolger Spending £3,000,000 pounds to move a road in Exmouth, £200,000 to replace a family fun park,crazy golf and putting greens that earned income? £100's of thousands in subsidies propping up Ocean in Exmouth. £40k plus for Hemingway to produce PR to enable you to justify your largess with Exmouths Queens Drive and the Rape of the Maer Valley, so you could pick up some cheap covenants to ruin the seafront. What a sorry excuse for a Council you are. As for the disposal of the "Table" for £50. I would at least expect a contrite Councillor to have the balls to admit he got rather more than a bargain and donate a reasonable sum to one of the local food banks you have driven the public to use. Oh, also the undervaluation of the Knowle site, the pathetic excuses for its deterioration due to your neglect and the spurious claims as to how much your new HQ will save the ratepayer. What utter rubbish, if you dont paint, repair and maintain your new HQ, in 20 years you will have an HQ in the same state as you left the Knowle and will have saved the ratepayer nothing. You are beyond unfit for purpose.

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Julia Roebuck Shame you sold all the stuff from the old building off dirt cheap to the staff and councillors. £50 for a 24 seat mahogany table. Shame shame shame on you!!!

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Les Lane Julia Roebuck they have no shame.

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Judith Taylor That's unbelievable 😨

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Julia Roebuck You read all about it here: https://eastdevonwatch.org/.../that-table-and-another-one/

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EASTDEVONWATCH.ORG

THAT table … and another one …

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Julia Roebuck And here: https://eastdevonwatch.org/.../a-couple-of-pictures-of.../

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EASTDEVONWATCH.ORG

A couple of pictures of things staff and councillors get first…

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Diane Harris Why couldn't they just take the furniture with them and save money. Oh no let's just buy some new 😠😠

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Julia Roebuck Yes that was my thought exactly! They should have taken it all, or opened it to public bidding in order to get maximum money to put towards the new furniture....but no.....

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Ian Woolger I always thought Councils were tasked with achieving "Best Value" for the ratepayer, not thieving best value for themselves...I wonder how much their new table will cost?

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