“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.