Sums on Knowle relocation not adding up for us, the taxpayers

“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.

Do you have a damp home? Do you need an affordable home? Contact Councillor Phil Twiss to get your problems sorted!

It seems councillor Twiss is a modern-day superhero – able to help you with just about any problem you might come across.

So, if you live in Honiton, do contact him:

Email: ptwiss@eastdevon.gov.uk
Telephone: 01404 891327
Address: Swallowcliff, Beacon, Honiton, EX14 4TT

http://eastdevon.gov.uk/council-and-democracy/councillors/honiton-st-michaels/phil-twiss/

or at DCC:
Email: phil.twiss@devon.gov.uk

True, he hasn’t so far sorted East Devon’s broadband not-spots, wasn’t able to halt the closure of Honiton Hospital’s community beds or stop Baker Estates from weaselling out of their affordable housing commitments and the ‘fillip’ to Honiton’s jobs and shops when the EDDC HQ moves to Honiton will be at the expense of Sidmouth … but these are just minor hiccoughs … aren’t they?

More news on EDDC’s new HQ builder

Owl says: EDDC getting a taste of the new build problems many house buyers are getting in East Devon, though this time it’s our taxes paying for them. Hope it is a fixed-price contract with penalty clauses and good insurance!

“… Signing up to a host of loss-making contracts and a disastrous foray into building energy-from-waste facilities have helped to send Interserve tumbling £244 million into the red.

Glyn Barker, chairman of the private sector provider of public services, said that the company had “suffered unprecedented levels of disruption and faced significant challenges” as it reported deep losses and warned that debts could more than double to £680 million this year….

The company’s shares, which have crashed by more than 80 per cent over the past five years, slumped a further 13¼p, or 12.3 per cent, to close at 93¾p yesterday.

The £244 million losses for 2017 included a 62 per cent slump in underlying operating profits to £52 million. Interserve was dragged into the red by writedowns of £98 million on the value of its assets, £67 million of restructuring and property costs and provisions of £86 million for lossmaking contracts.

About 125 of its contracts are in trouble. These are mainly in construction, but also include losses that Interserve is taking for looking after US military bases in Britain and a hit from the part-privatisation of the Probation Service. It took an extra £35 million of charges in the energy-from-waste fiasco that started the company’s crisis after it incurred £160 million of fines and penalties in 2016.

Interserve also reported £14 million of payments to consultants and advisers with a warning that the company would incur another £25 million this year.

Last week Interserve raised £196 million, taking its borrowing facilities to £834 million. Ms White said: “I would not say we are out of the woods. The debt refinancing has taken up a lot of our time.”

Source: Times (pay wall)

EDDC “Council decision to sell HQ for £7.5M is worst deal ever, activists”

Activists have branded a council decision to sell its HQ “the worst deal ever” for taxpayers.

East Devon District Council is selling its offices at Knowle in Sidmouth to Pegasus Life Ltd, one of Britain’s largest retirement housing developers, for £7.5 million.

The developable value of the site – divulged in a response to a Freedom of Information request in January-has been set at £50 million, with Pegasus Life Ltd set to make a £10 million profit.

Pegasus is owned by an American firm listed in the so-called Paradise Papers, 13.4 million confidential electronic documents relating to offshore investments that were leaked to German reporters last year. Offshore investments enable companies and individuals to shelter their wealth and avoid tax. They are legal.

Paul Arnott, chairman of the East Devon Alliance campaign group, said: “Why were councillors never told that our last great piece of family silver the Knowle – would be worth a massive £50 million after development?

“If any individual person in East Devon was told their prime location property could be developed and sold on for £50 million they’d never accept £7 million.”

In December 2016, the council’s planning committee rejected Pegasus Life’s planning application for 113 extra care units, but following a four-day inquiry into the developer’s appeal in November, a planning inspector gave the firm approval for the scheme which includes a café and swimming pool. Sidmouth has been allocated only 50 extra care homes in the council’s Local Plan.

The Alliance said it was an “exceptionally bad” deal, because, in accordance with the old land buyer’s rule of thumb, the landowner of a site should expect around a third of its developable value – in this case £16.5 million.
A council spokesperson said the deal was based on the site’s land value – in its current state. The site includes the buildings, terraces and top car parks.

Moving council operations to Honiton, with a satellite office at Exmouth Town Hall, has a budget of £10 million and is being funded out of the council’s coffers and a Public Works Loan Board loan.

The council spokesperson said that “from day one”, council running costs would reduce significantly when it leaves the Knowle and during its first full year of operations at Honiton it will save £135,000, with savings increasing year-on-year.

The Alliance pointed out that because the proposed complex is considered to be a residential/care home development, as opposed to a general residential development, the developer is not required to pay Section 106 money towards providing community services. The developer is only contributing £12,000 to improve access/footpaths to the site from adjacent parkland.

However, the developer could have to comply with what is known as an overage clause: If more than a 20% profit is made from the development, the council will be entitled to 50% of any profit made over and above the 20%, to a maximum of £3.5 million.

A council spokesperson, said: “We have carried out due diligence on Pegasus Life Ltd and are satisfied that they are an established and successful company suitably financed, capable of delivering the promised development and able satisfy their contract with the council.

“Selling the Knowle and moving offices is key to continuing to serve our communities. Services to our communities are what matter, not the vanity of paying to stay in an outdated and expensive building.

Pegasus Life Ltd bosses did not comment when asked whether any of the profit of its Sidmouth development could end up in tax havens. However, Howard Phillips, its chief executive, said: “We pride ourselves on the quality of our developments and the sensitivity of our designs to ensure they fit in with the area’s achitectural vernacular.

“The UK is in the middle of housing crisis and local authorities need to make cohesive eve plans that meet the needs their local towns. This includes provision for people over 60.”

Source: Western Morning Newz

Who will be working where with the new EDDC HQ

Freedom of Information request 19 February 2018. EDDC seems to be increasing staff during austerity.

“Total number of employees working for EDDC
513 – data as at 28 February 2018.

How many currently working remotely or ‘on the move’ are:

A) based in Exmouth Town Hall -79
B) based in Sidmouth – 280
154 are based elsewhere across the district including THG, Manor Pavilion, Cranbrook, StreetScene depots, parks and gardens, Lymebourne House, Business Centre, Camperdown or may be mobile touching down at both ETH and Knowle.

How will this situation change once the new office opens in Honiton (number):

It remains to be seen exactly but I would expect the majority of the 280 to relocate to Honiton but I will be consulting with all individuals and where there are people who potentially live in Exmouth who can work more sensibly from Exmouth we may make adjustments.”

http://eastdevon.gov.uk/access-to-information/freedom-of-information/freedom-of-information-published-requests/

Unitary authorities – the austerity measure that can’t be stopped?

Wonder what that new £10m EDDC HQ will be used for?

“Simon Heffer writes in the Sunday Telegraph to call on the Government to simplify and streamline the UK’s councils, replacing the system of county and district councils with county-level unitary authorities.

The need for “wholesale reform”, he says, has been made urgent by the problem of “social care that will break local government” and former chancellor George Osborne’s “disastrously flawed business rate system, which has had a profound effect on revenue-raising”.

He says that a system of unitary authorities would reduce payroll, offer the chance to sell off assets, and improve the handling of planning decisions, while the Government should remove “huge strategic questions such as social care from council control altogether”.

The Sunday Telegraph, Page: 21