WIRRAL Council is expected to pay £3.9m in rents for its new offices next year. The buildings are located in Birkenhead town centre off Alice Ker Square and are referred to as Mallory and Irvine.
In 2023, the council completed the first phase of the Birkenhead Commercial District with the construction of the two buildings and moved into Mallory in early 2024 following a £9.2m fit out. The project was funded in advance by £75m from Canada Life Asset Management but even if the council cannot let the buildings, it will still have to pay rent on them for 35 years.
According to previous Wirral Council accounts, the local authority will pay at least £2.213m each year made up of £1.34m a year for Mallory and £873,000 for Irvine. However the council planned to make the money back by ending its lease with the Cheshire Lines building and finding other tenants with a profit of £500,000 if fully let.
However, at the moment, the council is the only tenant in the buildings with Irvine sitting completely empty. To cover the costs, profits from the Wirral Growth Company, a council joint venture, are being used.
According to previous reports, this included £1.5m before the local authority moved in and a further £2m this year. However, following a question from Birkenhead councillor Pat Cleary at a policy and resources committee on November 6, finance director Matthew Bennett said the local authority was looking at paying costs of around £3.9m next year.
However, he said the council could reduce this figure by £2m by pushing back some costs but this would have to be picked up at a later date when the empty space is occupied. He said the budget for next year was “still a work in progress” but the empty office space would add pressure to next year’s budget with a projected overspend of £36m.
The issue was later picked up by fellow Green councillor Jo Bird who said the council was in a difficult financial position, adding: “It’s clear to me that everyone in the Wirral is paying quite a high price.” She criticised Wirral Council’s former Cabinet which decided in 2020 to move the scheme forward and asked what lessons had been learned.
However, she was accused by Labour of making a party political broadcast and it was pointed out Cllr Bird was a Labour councillor when the decisions were made. Cllr Bird joined the Green Party in 2022 after she was expelled from Labour.
Labour deputy leader of the council Cllr Jean Robinson said Cllr Bird had been sat next to her when the plans were agreed, adding: “The decision was made at a totally different time now even since 2020 with Covid. Hindsight is a great thing to all of us.”
In response to Cllr Bird, Mr Bennett said the costs for Irvine were quite significant at the moment but stressed they could go down if either building is let out. He said the £3.9m projection for next year was a worst-case scenario.
He said a lack of funding for children's and adults’ social care services which have seen increasing levels of demand and costs were the main drivers for the council’s current budget position. During the meeting, Cllr Robinson said the council’s budget had also been cut by around £220m over the last 14 years.
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