Decision details

The Cabinet Member Finance introduced the report on the Accommodation Strategy which had been circulated with the agenda.

The report explained that the council had had a long-term aspiration to relocate to modern, more flexible office accommodation which would meet both existing and future needs, improve the customer experience and provide better value for money to the taxpayers of Cheltenham.  This had been restated at the Council meeting of 31 March 2014 and the report and the supporting business case now outlined the case for relocation and considered how each option met the Council's desired outcomes. An amended cost benefit analysis for option 2 including inflation had been circulated in Members’ places at the start of the meeting together with corresponding amendments to the summary.

In his introduction the Cabinet Member highlighted that the Municipal Offices were unsuitable for modern office accommodation but he was passionate to secure the building’s long-term survival. The accommodation strategy was also a critical part of the ongoing process to achieve budget savings without the need to cut critical services.  He acknowledged that it was a huge decision but it was the opportunity of a lifetime for the town.  The council had a successful history of purchasing property for investment and the Regent Arcade was a good example where the council had secured a long term income through this joint-venture. A recent review from Cipfa had also urged the council to invest in property to secure future income. In acquiring the property, the council would be purchasing grade A office accommodation in the centre of the town which was fully accessible, provided modern office accommodation, underground car parking and would attract prospective tenants. CBH had indicated they were keen to relocate with the council.  The council had been conservative in the rental estimates but the rental income stream in the next 8 years would cover 71% of the purchase price and stamp duty. Acquiring the building would also give the council flexibility for the future in terms of accommodating its future workforce.  In conclusion he thanked officers for all their hard work.  He considered he had done his duty for Cheltenham in bringing this proposal to Council today and he urged members to support the recommendations.

The Mayor invited questions to the Cabinet Member Finance.

In response to questions from Members, the Cabinet Member Finance gave the following responses set out below:

• A number of members asked for clarification on the Cabinet Member’s stated expression of interest from CBH in moving into the building as they were not aware that this had been proposed to the Board of Directors or agreed by senior management. They understood that CBH was preparing its own accommodation strategy in preparation for their lease on Cheltenham House running out in September 2016. It was not correct to assume that CBH would be paying the council a future rent and therefore this should not be assumed in the proposals.
  • The Cabinet Member confirmed that senior management of CBH had seen the building and expressed an interest. He was aware that the matter had been discussed within CBH but had not been the subject of any decision.
• Could the Cabinet Member confirm that independent legal advice regarding the lease was being sought from a specialist property lawyer?
  • He advised that this had been looked at by the in-house legal team but in view of the importance of the decision, officers would be consulting external lawyers. Although he was not anticipating any problems,  clearly if it highlighted any significant concerns the deal would not go ahead.

The Mayor advised that the Council would now need to move into exempt session to enable members to ask questions on the restricted papers.

According the following resolution was passed unanimously:

Resolved that the following resolution be approved:-

“That in accordance with Section 100A(4) Local Government Act 1972 the public be excluded from the meeting for the remaining agenda items as it is likely that, in view of the nature of the business to be transacted or the nature of the proceedings, if members of the public are present there will be disclosed to them exempt information as defined in paragraph 3, Part (1) Schedule (12A) Local Government Act 1972, namely:

Paragraph 3; Information relating to the financial or business affairs of any particular person (including the authority holding that information)

Members of the public were excluded from the public gallery at 8.50 pm.

In closed session Members were able to ask questions on the exempt information in the report and debate any issues arising.

The Mayor advised that all members had now had the opportunity to ask questions and debate the exempt information and he now intended to invite the public back to hear the rest of the debate.

At 10.15 the public were invited back into the meeting at the meeting went back into open session. As the time was approaching when the meeting would have been in session for 4 hours, members agreed unanimously to continue the meeting until the business was concluded.

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A member recognized the professionalism of officers but today the decision lay very clearly with elected members whose role was to challenge and question the evidence before them. On that basis he had come to the conclusion that although he agreed with the aspirations of the accommodation strategy he could not support the recommendations as presented. He still had grave doubts given some of the important questions that had been asked during the meeting and suspected other members felt the same. Another member was passionate about the town and wanted to do what was best in the interests of the people of Cheltenham.

Another Member questioned the need for an urgent decision and felt members and the public needed to be given more time to consider the most important decision that the council had taken in a hundred years. There had been new or contradictory information in the papers circulated and the variation in the figures given for the maintenance of this building was an example. There was certainly a need for a further valuation of the intended property and if the owner was aware of some dissent in this chamber that could assist in any future negotiation. There was also a concern that the recommendations required £2.5 million of internal borrowing from the proceeds of the sale of North Place. Why was the council not looking at the alternative option of acquiring Cheltenham House? Another member suggested that the council should have a huge advantage over other potential purchasers but instead had got itself into a position where it was paying way above the valuation.

 Members speaking in support of the recommendations highlighted the unsuitable quality of current office accommodation for staff, some working in the basement. A solution had been found which offered the right sort of accommodation with good facilities and in addition gave a good income stream. A member referred to the solution as a ‘no brainer’. The price should be set at what the purchaser is prepared to pay and the owner is prepared to accept. Another member felt that members opposing the recommendation had failed to grasp the essential maths behind the proposals. What was being offered was potential to create a true civic centre with other public services in the same location and was forward thinking. This proposal would enable the municipal offices to come alive again to the benefit of the people in Cheltenham and any dithering would result in the deal being lost and less income in the future. Another member reminded council that this had been discussed over a period of 30 years and it was now the right time to make a decision.

In his summing up the Cabinet Member Finance said this was a very sensitive decision for Council today and he acknowledged the contribution that members had made during the debate. All the information had been fully available to all members and the outcomes of the NPVs were all in the public domain and he considered the facts spoke for themselves. He highlighted the letter from the valuers dated the 10 April 2015 which crystallised the valuation figure and the council's particular position in seeking an investment as well as a potential home.  The recommendations provided a modern town centre location for the council offices and a vision for the Municipal Offices going forward. He was sorry that some members felt they couldn't commit to this exciting future and there was a huge flaw in their argument in proposing that there was a better alternative because in his view there wasn't one.

Upon 7 members standing in seat a recorded vote was required and this was CARRIED

RESOLVED THAT the budgets for financing the acquisition and refurbishment as detailed in Appendix 2 and 3 be approved.
 

Voting For 22: Councillors Baker, Barnes, Britter, Clucas, Coleman, Fisher, Flynn,  C Hay, Holliday, Jeffries, Jordan, McCloskey, McKinlay, Rawson, Reid, Sudbury, Thornton, Walklett, Wheeler, Whyborn, Wilkinson and Williams

Against 13: Councillors Babbage, Chard, Fletcher, Harman, Lillywhite, Mason, Nelson, Payne, Regan, Ryder, Seacome,Smith and Stennett,.

No abstentions.